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2009 Supreme(Ker) 821

High Court of Kerala
THE HONOURABLE MR. JUSTICE P.S. GOPINATHAN
G. John, Managing Director, Eruro Marine
Versus
Alosious.Y., Puthenveedu & Another
Crl.Rev.Pet.No. 1672 of 2007
Decided on : 13-10-2009

Advocates Appeared:For the Petitioners:George Varghese (Manachirackel), Advocate. For the Respondent:K. Subash Chandra Bose, Advocate.

Headnote:

Negotiable Instruments Act, 1881 - Section 138 - Respondent herein prosecuted the revision petitioner alleging offence u/S.138 of the Negotiable Instruments Act - It was contended that the revision petitioner owed a sum of Rs. 3,71,734/- and in discharge of the said liability a cheque which was marked as Ext.P1 was issued - When Ext.P1 was presented for collection, the same was dishonoured for insufficiency of funds and that despite the demand to discharge the liability, no payment was made - Held, It being a case of partial discharge after notice, and the case on hand being partial discharge before presentation of the cheque, the ratio of the latter decision has no application to the case on hand - Ratio of the former decision is squarely applicable to the case on hand - Courts below failed to take note of the fact that on the date of presentation of the cheque there was no liability outstanding to the extent to which the cheque was drawn - There was lack of bona fides in presenting the cheque without making endorsement under S. 56 of the Negotiable Instruments Act - To constitute offence u/S.138 of the Negotiable Instruments Act, there would be debt or liability to the extent to which the cheque was drawn - If there is part payment it should have been endorsed and the claim should be limited to the extent of liability - Prosecution is an abuse of process - Revision Petition Allowed

Judgment :

The 1st respondent herein prosecuted the revision petitioner before the Judicial Magistrate of the First Class-II, Kollam in C.C No. 733 of 2003 alleging offence u/s. 138 of the Nogotiable Instruments Act. It was contended that the revision petitioner owed a sum of Rs. 3,71,734/- and in discharge of the said liability a cheque which was marked as Ext.P1 was issued. When Ext.P1 was presented for collection, the same was dishonoured for insufficiency of funds and that despite the demand to discharge the liability, no payment was made.

2. The revision petitioner in response to the process issued entered appearance and pleaded not guilty when the particulars of the offence was read over and explained. Hence he was sent for trial. On the side of the respondent, he was examined as PW1 and Exts.P1 to P6 were marked. When questioned u/s.313 of the Code of Criminal Procedure, he denied the incriminating evidence. On his side two witnesses were examined as DWs 1 and 2 and Exts.D1 and D2 were marked. The learned Magistrate on appraisal of evidence, arrived a conclusion of guilty. Consequently the revision petitioner was convicted for offence u/s. 138 of the Negotiable Instruments Act and sentenced to simple imprisonment for eight months and a fine of Rs. 5,000/-with a default sentence of simple imprisonment for two months. The fine amount if realized was ordered to be paid to the first respondent as compensation u/s. 357(1) of the Code of Criminal Procedure.

3. Feeling aggrieved by the above conviction and sentence, criminal appeal No.313 of 2006 was preferred before the Sessions Judge, Kollam. The learned Additional Sessions Judge to whom the appeal was made over, by judgment dated 13-2-2007 confirmed the conviction and sentence.

4. Assailing the legality, correctness and propriety of the above conviction and sentence as confirmed in appeal, this revision petition was filed.

5. Having heard the learned counsel on either side and perusing the judgments of the courts below, I find that Ext.P1 cheque for Rs. 3,71,734/- dated 30-6-2002 drawn on Federal Bank, Thiruvananthapuram was issued by the revision petitioner to the first respondent. At the time when Ext.P1 cheque was issued, there was liability amounting to Rs.3,71,734/-. Thereafter on 24-7-2002, the revision petitioner paid a sum of Rs.1,00,000/-. It is admitted by PW1 during the cross examination. Though Rs. 1,00,000/- out of the amount covered by Ext.P1 cheque was received on 24-7-2002, the 1st respondent presented the cheque for collection on 10-12-2002 for the entire amount. On that date there was no sufficient funds in the account of the revision petitioner to cover the full amount. Hence it was returned with Ext.P2 memo for reason "funds insufficient". Thereupon the first respondent, on 20-12-2002 caused a notice demanding discharge of Rs. 3,71,734/- though Rs. 1,00,000/-out of the said amount was paid by the revision petitioner. On receipt of Ext.P3, the revision petitioner sent Ext.D2 reply. In Ext.D2 it is specifically mentioned that out of the amount covered by Ext.P1 cheque, Rs.1,00,000/- was paid and it was acknowledged by the first respondent. It was further stated that the revision petitioner was ready to settle the dispute within a reasonable time and not to initiate unnecessary litigation. A reading of the complaint filed by the first respondent would show that there is no mention regarding the acknowledgment of Rs.1,00,000/- on 24-7-2002. The complaint was also filed as if the entire amount as per Ext.P1 was due and there is refusal to discharge the liability. The admission of PW1 would show that in fact on the date of presentation of Ext.P1 that much amount was not due. On the date of issuance of Ext.P3 notice also such amount was not due. Suppressing all these facts, complaint was filed. There is total lack of bonafides. Since the respondent did not care to make endorsement under Section 56 of the Negotiable Instruments Act. I find that the cheque was pre











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