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High Court of Kerala
A. HARIPRASAD, J.
Anagha Prasad
Versus
M.C. Abu & Another
Crl. M.C. Nos. 3805, 3806 & 3807 of 2012
Decided on: 2-09-2014
Negotiable Instruments Act, 1881 - Sections 26 & 138 - Indian Contract Act, 1872 - Section 68 - Dishonor of Cheque - Minor - Protection or insulation to - Prosecution of - Findings of - Held, Court find that the quondam minor becoming a major on the date of dishonour of cheque is of no consequence, if the subject matter is a cheque drawn by him during his/her minority - Essential ingredient to attract the offence is lacking in the fact situation - For that primary reason, it can be held that the petitioner cannot be prosecuted for an offence under S.138 N.I. Act - It gives a protection or an insulation to the minor from binding himself when he is drawing, indorsing or delivering or negotiating a negotiable instrument - Court shall deal with the liability of a minor, in case a cheque drawn by him is dishonoured, as per the law stated in S.26 N.I. Act - Conclusion that can be drawn from the above discussion is that a contract entered into with a minor, being a void contract, cannot be enforced against him and that a minor at any rate cannot be personally held liable under civil law for the dishonour of a cheque drawn, indorsed, delivered or negotiated by him
Key Points: - A minor cannot be personally held liable under civil law for a cheque drawn, indorsed, delivered or negotiated by him; contract with a minor is void. (!) (!) (!) - Section 26 NI Act protects a minor drawing/indorsing/negotiating a negotiable instrument, but such instrument binds all parties except the minor. (!) (!) (!) - For offences under Section 138 NI Act, the essential ingredient is a cheque drawn to discharge a debt or liability, and the instrument must bind the drawer; post-dated cheques and those drawn during minority raise specific issues about liability. (!) (!) (!) - A quondam minor (who becomes major by the time of dishonour) may have different considerations depending on whether the instrument was drawn during minority; the court held that the offence cannot be attracted if the cheque was drawn during minority. (!) (!) - The court quashed the complaints against the minor and held the petitions allowed, with quashing of proceedings. (!) - The liability of minor in cases of necessaries and other sections (e.g., Section 68, Contract Act) is addressed to the extent of reimbursement from the property of the minor, not personal liability. (!) (!)
1. Common questions of fact and law arise in these three cases. Hence, they are heard together and disposed by this common order.
2. Legal puzzles arising herein for determination are as follows:
i. Whether dishonour of a cheque, drawn by a person during minority for discharging a debt or liability towards another, will invite an offence under Section 138 of the Negotiable Instruments Act, 1881Rs.
ii. Does it make any difference if the cheque was a post-dated one and its dishonour takes place after the quondam minor attained majority Rs.
3. In order to find out answers to these questions, we shall consider the skeletal facts in these cases. Petitioner in these cases are the accused in three different private complaints filed by the 1st respondent before the learned Judicial First Class Magistrate, Nilambur. In all the three complaints, the offence alleged against the petitioner is one under Section 138 of the Negotiable Instruments Act, 1881 (in short, "the NI Act"). 1st respondent/complainant is the Managing Partner of a firm, conducting a business by name Persian Jewellery, Nilambur. Petitioner's mother was an employee in the said firm. While so, the petitioner, her mother and brother approached the 1st respondent seeking financial help for the petitioner to pursue study in an engineering college in Tamil Nadu. They required about Rs.2,50,000/-as fees for admission to the college and the hostel. 1st respondent paid Rs.1,50,000/-to the petitioner for meeting the initial expenses. Thereafter, on 08.08.2010, the petitioner again approached the 1st respondent and requested to lend Rs.1,00,000/-more for her study. Petitioner made the 1st respondent believe that the entire amount borrowed from him would be repaid before 10.01.2011 as she was sure of getting the education loan applied for. On 12.07.2010, the petitioner, her brother and mother again approached the 1st respondent and requested for advancing money. As agreed earlier, an agreement was executed between the parties. As per the terms of the agreement the total amount of Rs.2,50,000/- demanded and received by the petitioner, including Rs.1,00,000/-later received by her, should be repaid on or before 10.01.2011. It was further agreed that if the petitioner did not repay the money, a portion of the property belonging to them should be conveyed to the 1st respondent. On that assurance, on 08.08.2010, 1st respondent advanced to the petitioner a further sum of Rs.1,00,000/-, thereby she got the entire amount of Rs.2,50,000/-from the 1st respondent. However, the petitioner did not fulfil her promise to pay back money promptly. Later, on 14.01.2011, the petitioner with her brother and mother again approached the 1st respondent and the petitioner acknowledged her liability. It was represented by the petitioner that she got the education loan sanctioned. Petitioner paid Rs.10,000/-to the 1st respondent on the said date. Thereafter three cheques were issued for the remaining liability of Rs.2,40,000/-on 14.01.2011 by the petitioner to the 1st respondent. One cheque was for Rs.1,50,000/. Another one was for Rs.80,000/- and yet another one for Rs.10,000/-. All of them were drawn on 14.01.2011 with a post date 31.01.2011. When the cheques were presented for collection, they were dishonoured due to insufficiency of funds in the account of the petitioner. 1st respondent caused to issue the statutory notices. Even after receiving notices, the amounts were not paid. Hence, three prosecutions were launched.
4. Main contention raised by the petitioner is that the complaints are not legally maintainable, because the petitioner, being a minor on the date of drawal of the cheques, cannot be prosecuted as she was incompetent to bind herself at that time by virtue of Section 26 NI Act.
5. It is seen from the records that the petitioner filed applications before the trial court in all the cases claiming the benefit of Section 7 of the Juvenile Justice (Care and Protection of Children) Act, 2
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