Point of Law: A negotiable instrument, which includes a cheque, carries presumption of consideration under Sections 118(a) and 139 of N.I Act.

JUDGMENT :

This appeal is filed questioning the correctness and legality of the judgment passed by the Additional Sessions Court, Kottayam (Appellate Court) in Crl.A. No.341/2009, setting aside the conviction and sentence passed by the Judicial First Class Magistrate-II (Mobile), Kottayam (Trial Court), in S.T.No.1936/2008 of the second respondent for the offence under Section 138 of the Negotiable Instruments Act, 1988 (for brevity, ‘N.I. Act’). The appellant was the complainant and the second respondent was the accused before the Trial Court. For convenience, the parties are referred to as per the status before the Trial Court

Factual narrative:

2. The complainant had filed S.T.No.1936/2008 before the Trial Court, alleging that the accused had committed the offence under Section 138 of the N.I. Act. He alleged that the accused was conducting a chitty named ‘Madathiparambil Chitty Funds’. The complainant had joined a chitty in the year 1999 for a sala of Rs.1,00,000/-. The complainant had remitted the entire chitty amount. But, the accused failed to pay the chitty amount. Subsequently, the complainant and the accused jointly fixed the amount at Rs.1,00,000/-and in discharge of the said liability, the accused had issued Ext P1 cheque dated 06.08.2007. The cheque, on presentation to the Bank for collection, got returned by Ext P2 memorandum for the reason “refer to drawer”. Even though the complainant had issued Ext P3 statutory lawyer notice to the accused, he failed to pay the demanded amount. Hence, he committed the offence.

3. The learned Magistrate took cognizance of the offence against the accused. The accused had pleaded not guilty to the accusation made against him. In the trial, the complainant got himself examined as PW1 and Exts P1 to P7 were marked in evidence. The accused examined himself as DW1 and marked Ext D1 – ledger extract.

Trial Court judgment:

4. The learned Magistrate, after analysing the materials on record, found the accused guilty for the offence under Section 138 of the N.I. Act, and convicted and sentenced him to undergo imprisonment till the rising of the court and pay a fine of Rs.1,00,000/-, and in default to undergo simple imprisonment for a further period of two months. If the fine amount was realised, the same to be paid as compensation to the complainant.

5. Aggrieved by the said judgment, the accused preferred Crl.A.No.341/2009 before the Appellate Court.

Appellate Court judgment:

6. The Appellate Court, after re-appreciating the materials placed on record, by the impugned judgment, set aside the order of conviction and sentence passed by the learned Magistrate, and held that the accused not guilty for the offence under Section 138 of the N.I. Act and consequentially, acquitted him.

7. It is challenging the said judgment of acquittal, the present appeal is filed.

8. Heard; Sri.Thomas Kachiramattom, the learned counsel appearing for the appellant; Smt. Pushpalatha M.K., the learned Senior Public Prosecutor appearing for the first respondent – State and Sri. Ananthakrishnan A. Kartha, the learned counsel appearing for the second respondent.

9. Sri.Thomas Kachiramattom argued that the Appellate Court has erroneously held the accused not guilty for the offence under Section 138 of the N.I. Act without appreciating the presumption under Sections 118 & 139 of the N.I. Act. The Appellate Court has miserably failed to advert to the materials on record and the law laid down by this Court in Ramakrishnan v. Parthasaradhy [2003 KHC 462] and wrongly held that the transaction was time barred and Ext P1 cheque was not issued towards a legally enforceable debt. He also placed reliance on the decision of the Division Bench of this Court in Vathsan v. Japahari [2003 (3) KLT 972], to fortify the contention that the prosecution under Section 138 of the N.I. Act would apply, even if the bank account is closed. He prayed that the appeal be allowed and the impugned judgment be set aside.

10. Sri. Ananthakrishnan A. Kartha vehe