IMPORTANT POINT
Self cheque would attract Section 138 of NI Act.

Anand Byrareddy, J.—The petitioner was the accused before the trial court. The complainant had alleged the commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881(Hereinafter referred to as the NI Act, for brevity.)

2. It was alleged that the petitioner had purchased a bus from the complainant. The petitioner was in arrears in the payment of the price, in a sum of Rs.28,000/-. It is stated that in discharge of the said liability, the petitioner had issued a cheque drawn on “self or bearer“. The complainant having presented the cheque for payment to the banker of the petitioner, the same is said to have been dishonoured for want of sufficient funds. A memo was issued by the bank to that effect. The complainant had issued a legal notice demanding the payment of the amount covered under the cheque, claiming to be a holder in due course, as contemplated under Section 9 of the NI Act. On the failure of the petitioner to meet the demand, the complaint was filed.

The trial court took cognizance of the offence punishable under Section 138 of the NI Act, and after recording the sworn statement of the complainant, had issued summons to the petitioner , who appeared before the court and pleaded not guilty and claimed to be tried. The complainant had tendered evidence as PW - 1 and examined four other witnesses on his behalf. The statement of the accused under Section 313Cr.P.C, was recorded, he tendered evidence as DW-1 , in support of his defence. The court framed the following points for consideration :

“1. Whether the complainant proves beyond all reasonable doubt that the accused had issued him a bearer cheque bearing No. 0434454 to discharge his debt or liability for Rs.28,000/- dated 5.11.2005 drawn on Vijaya Bank, Mandarti Branch?

2. Whether the complainant proves beyond all reasonable doubt that the complainant has presented the said cheque for encashment before Vijaya Bank, Karkala Branch and the said cheque has been dishonoured due to insufficient funds in the account of the accused?

3. Whether the complainant proves beyond all reasonable doubt that after having the intimation and receiving endorsement of the dishonour of the cheque, complainant got issued legal notice to the accused as required under Section 138 of the NI Act?

4. Whether the complainant proves beyond all reasonable doubt that after receipt of the notice, accused ahs failed to pay the cheque amount within 15 days from the date of receipt of the said notice ?”

All the points were answered in the affirmative and the petitioner was convicted and sentenced to undergo simple imprisonment for a period of six months and to pay a fine of Rs. 30,000/-. Out of the fine amount, Rs. 28,000 was to be paid as compensation to the complainant in terms of Section 357(1)(b) of the Code of Criminal Procedure, 1973 (Hereinafter referred to as the Rs. Cr.PC’, for brevity) .

This was challenged in appeal. The appellate court however, dismissed the appeal and affirmed the judgment of the trial court, but modified the punishment imposed, the sentence of imprisonment was eschewed. It is the affirmation of the conviction that is under challenge in the present petition.

3. The learned counsel for the petitioner would contend that the cheque in question was drawn on self, and the dishonour of the same would not attract Section 138 of the NI Act, as held by a learned single judge of this court in the case of V. Rama Shetty v. N. Sasidaran Nayar.1 The learned counsel would contend that the courts below had committed an error in concluding that though the cheque in question was a self cheque, it was issued in discharge of the liability aforesaid and that the complainant was a “holder in due course” and the dishonour of the cheque in the hands of the complainant, attracted Section 138 of the Act. The learned counsel would insist that this court having opined as above, the courts below were bound by the same and could not have placed reliance on decisions