IN THE HIGH COURT OF KERALA
P.D. Rajan, J.
Shiju K. – Appellant
Vs.
Nalini and Others – Respondents
Crl. R.P. No. 1251 of 2005
Decided On : 26-11-2015
Negotiable Instruments Act, 1881 - Sections 15 and 138 - Endorsement - Dishonour of cheque for insufficiency, etc., of funds in the account - whether any offence under S.138 of the N.I. Act will be attracted in this context - Admissions are conclusive proof of matters admitted or not - Held, When a part payment of the amount due under a cheque is paid and if the payee or drawee fails to make an endorsement and the holder claims the full cheque amount no offence under Section 138 of the N.I. Act will be attracted - Absence of such proof of threat or inducement or mistake of law, admission made by persons constitutes good evidence against party making it - No material to show that admission made by complainant is not in another transaction such admission is valuable in connection with the transaction.
Key Points: - (!) The accused was convicted under Section 138 for issuing a cheque that was dishonoured due to insufficient funds. - (!) The complainant admitted that part of the debt was repaid, but no endorsement was made on the cheque. - (!) No offence under Section 138 is attracted if the cheque amount is higher than the debt and there is no endorsement of part payment. - (!) Admissions by the complainant are binding unless shown to be influenced by threat, inducement, or mistake of law. - (!) In the absence of proof of threat or inducement, the admission made by the complainant is valid evidence against him. - (!) No offence under Section 138 is made out when part payment is admitted and no endorsement is made on the cheque. - (!) The conviction and sentence under Section 138 are set aside, and the revision petitioner is acquitted.
P.D. Rajan, J.
1. This revision petition is preferred by the accused against the judgment in Criminal Appeal 150/02 of the 1st Additional Sessions Judge, Kozhikode. Revision Petitioner was accused in CC 351/99 of the Judicial First Class Magistrate-V, Kozhikode for having committed an offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the N.I. Act). The complainant's case is that, accused borrowed a sum of Rs. 1,17,500/- from the complainant and in discharge of that debt, he issued Ext. P1 cheque. When the cheque was presented for encashment, it was dishonoured for the reason of funds insufficient. The complainant demanded the due amount by giving a notice in writing, but after notice, there was no repayment of the due amount, hence he filed a complaint before Judicial First Class Magistrate, Kozhikode. During trial, complainant was examined as PW1 and his documents were marked as Exts. P1 to P7. The incriminating circumstances brought out in evidence were denied by the accused while questioning him under Section 313 Cr.P.C. Accused did not adduce any defence evidence. The learned Magistrate convicted the accused under Section 138 of the N.I. Act and sentenced to imprisonment for six months. Against that he preferred Criminal Appeal No. 150/2002 before 1st Additional Sessions Judge, Kozhikode, where the sentence was modified by the Appellate Court. Being aggrieved by that he preferred this revision petition.
2. The main contention advanced by the revision petitioner is that part payment of the debt amount under the cheque was paid to the payee and he has not made any endorsement of that part payment in the cheque. Instead of claiming the balance amount, he claimed the cheque amount, which is higher amount than the debt, in such a situation, no offence under Section 138 of the N.I. Act will be attracted.
3. In reply to the above argument, the 1st respondent admitted that the debt is less than the cheque amount, even though no endorsement is made on the back side of the cheque leaf an offence will attract against the revision petitioner.
4. The question that arise for consideration is that if the debt amount is less than the cheque amount whether any offence under Section 138 will be attracted against the revision petitioner. According to Section 138 of the N.I. Act, where any cheque drawn by a person on an account maintained by him with a bank for payment of any money to another person from, out of that account, for the discharge of any debt or liability, in whole or in part is returned by the bank, on the ground that the amount in that account is insufficient to honour the cheque or it exceeds the amount arranged to be paid from that account by an agreement made with a bank, such person shall be deemed to have committed an offence under Section 138 of the N.I. Act. This deemed provision is subject to the statutory condition that the cheque has to be presented within the statutory period in which it is drawn or within the period of its validity. Secondly, the payee or holder in due course of the cheque makes a demand for payment of such amount by giving a notice in writing to the drawer of the cheque within 30 days (with effect from 06/02/2003) on receipt of information from the bank. If the drawer fails to make payment of due amount within 15 days on receipt of notice, the payee or the holder of the cheque can file a complaint. The facts of the case show that the amount covered by the cheque is bigger than the cheque amount. A reading of the wordings of the Section shows that the cheque should be given in discharge of a debt either in whole or in part or any liability and if the cheque amount is higher than the debt or liability, Section 138 of the N.I. Act would not get attracted.
5. The position of part payment of the cheque amount has been considered by the Division Bench of this Court in Joseph Sartho v. Gopinathan and Another, 2008 (4) KHC 463 : 2008 (2) KLD 764 : ILR 2008
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