Point of Law: Punishment under Section 138 of Act is not a means of seeking retribution but a means to ensure payment of money.

ORDER :

Is the directions in Narayanan. A.C v. State of Maharashtra and others, [2013 (3) KHC885], followed by this Court in Shibu. L.P v. Neelakantan, 2022 KHC 548, strictly applicable in a complaint filed under Section 138 of the Negotiable Instruments Act by a power of attorney of a company/firm in view of the subsequent decision in TRL Krosaki Refractories Ltd (M/s). v. SMS Asia Private Limited and others, 2022 (2) KHC 157 is the question posed for consideration.

2. The appeal is filed questioning the correctness of the judgment in C.C.No.507/2008 passed by the Court of the Chief Judicial Magistrate, Alappuzha, holding the 2nd respondent not guilty of the offence under Section 138 of the Negotiable Instruments Act (‘Act’ for short). The appellant was the complainant, and the 2nd respondent was the accused before the learned Magistrate.

Relevant facts

3. The complainant firm had filed the complaint against the accused, alleging that he had issued two cheques in its favour for Rs.1,60,000/-and Rs.20,000/-respectively, in discharge of a legally enforceable liability. However, the cheques were dishonoured due to 'insufficiency of funds' in the accused's bank account. Although the complainant issued a statutory notice demanding the above amounts, the accused failed to pay the same. Hence, the accused committed the offence.

4. The learned Magistrate took cognizance of the offence. The accused pleaded not guilty to the accusation. In the trial, the complainant examined its Branch Manager and Accountant (PWs 1 and 2) and marked in evidence Exts.P1 to P12 documents. The accused denied the incriminating questions in the examination under Section 313 of the Code of Criminal Procedure ('Code', for brevity). The accused produced and marked in evidence Ext.D1 series receipts.

5. After analysing the materials on record, the learned Magistrate found the accused not guilty, predominantly on the finding that there is no averment in the complaint regarding the status of the complainant and, therefore, PW1 is not competent to file and prosecute the complaint.

6. Heard; Sri. Lal K.Joseph, the learned Counsel appearing for the appellant and Smt.Pushpalatha M.K., the learned Senior Public Prosecutor appearing for the 1st respondent – State.

7. Sri. Lal K.Joseph contended that the learned Magistrate has erroneously observed that there is no averment in the complaint regarding the status of the complainant. It is specifically stated in paragraph 1 of the complaint that the complainant is a firm. In addition to the assertion, Ext.P9 partnership deed and Ext.P12 acknowledgement of the registration of the firms were marked in evidence. It is also explicitly stated that the complainant firm is represented by its Branch Manager and Ext.P10 resolution authorises him in that behalf. Moreover, PW2, the Accountant of the firm – has positively testified that he is aware of the transaction between the complainant and the accused, and that Ext.P2 cheque was executed in his presence. Furthermore, a Division Bench of this Court in Basheer K. v. C.K.Usman Koya and another, 2021 (2) KHC 432 has held that only the concatenation of the five ingredients which is sine qua non to attract the offence under Section 138 of the Act need be averred in the complaint. Hence, he urged that the appeal be allowed, and the impugned judgment be set aside.

8. The learned Public Prosecutor drew my attention to a recent decision of this Court in Shibu.L.P v. Neelakantan, wherein this court, relying on the three-judge Bench decision in Narayanan.A.C v. State of Maharashtra, has held that there should be a specific assertion in the complaint that the power of attorney holder has the knowledge of the cheque, otherwise the power of attorney holder cannot be examined as a witness. She submitted that the impugned judgment aligns with the law laid down in Narayanan.A.C1and Shibu.L.P2.

9. Sri.Lal K.Joseph countered the above submission and relied on a subsequent three-judge Bench decision of the Hono