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IN THE HIGH COURT OF KERALA AT ERNAKULAM
SOPHY THOMAS, J.
P.M. Moidu, S/o. Mammmunhi – Petitioner
Versus
K.M. Abdulla, S/o. Mohammed and Anr. – Respondents
Crl. Rev. Pet No. 4017 Of 2009
Decided On : 11-12-2023
Negotiable Instruments Act - Dishonour of Cheque - Section 138 - 138 - 118 - 139
Fact of the Case:
The accused appealed against his conviction under Section 138 of the Negotiable Instruments Act for dishonour of a cheque. He claimed that the cheque was issued from a closed account and was not supported by any consideration.
Finding of the Court:
The court found that the complainant failed to prove a genuine transaction leading to the issuance of the cheque. The accused successfully rebutted the statutory presumptions available in favor of the complainant under Sections 118 and 139 of the NI Act.
Issues: The main issue was whether the accused was guilty of the offence punishable under Section 138 of the NI Act.
Ratio Decidendi: The court held that to attract an offence under Section 138 of the NI Act, the cheque must represent a legally enforceable debt. The complainant's failure to prove a genuine transaction and the accused's evidence of the cheque being one of the cheques lost from his possession led to the acquittal.
Final Decision: The revision petitioner was found not guilty of the offence punishable under Section 138 of the NI Act and was acquitted. His bail bond was cancelled, and he was set at liberty forthwith.
Key Points: - The revision petitioner was acquitted of the offence under Section 138 of the NI Act due to failure to prove a legally enforceable debt and to establish a genuine transaction (!) (!) (!) . - The defense evidence showed the cheque was drawn from a closed account (account closed in 1997) and that the cheque was issued ten years later (2007), undermining the presumption under Sections 118 and 139 of the NI Act (!) (!) (!) . - Ext.P7 letter and Ext.P8 ledger evidence demonstrated the account closure and loss of the cheque book, supporting the defense that no legally enforceable debt existed and the cheque was not issued for such debt (!) (!) (!) . - The court held that merely producing a cheque does not establish a debt; the complainant failed to prove a transaction and source of funds for the debt (!) (!) . - The conviction and sentence recorded by the trial and appellate courts were set aside; the revision petitioner is acquitted and set at liberty (!) . - The bail bond was cancelled and the petitioner was set at liberty forthwith (!) . - The revision petition was allowed, resulting in acquittal under Section 138 NI Act (!) .
ORDER :
This revision is at the instance of the accused in C.C.No.44 of 2008 on the file of Judicial First Class Magistrate-II (Additional Munsiff), Kasaragod, assailing the judgment in Crl.Appeal No.275 of 2008 on the file of Sessions Court, Kasaragod, which upheld his conviction under Section 138 of the Negotiable Instruments Act (hereinafter referred as ‘the NI Act’), though the substantive sentence was reduced to simple imprisonment for one month, while retaining the compensation part and its default sentence.
2. C.C.No.44 of 2008 was based on a private complaint filed by the complainant/1st respondent, alleging dishonour of Ext.P1 cheque dated 29.08.2007 alleged to have been issued by the revision petitioner towards discharge of an amount of Rs.96,000/-. He presented the cheque for collection. But it was returned dishonoured stating reason “payment stopped by the drawer and account closed”. The complainant/1st respondent sent lawyer notice to the revision petitioner, to which he sent a reply, but no amount was paid. So he preferred the complaint under Section 138 of the NI Act.
3. On appearance of the revision petitioner before the trial court, particulars of offence was read over and explained, to which he pleaded not guilty. Thereupon PWs 1 and 2 were examined and Exts.P1 to P7 were marked by the complainant/1st respondent. On closure of evidence, the revision petitioner was questioned under Section 313 of Cr.P.C. He denied all the incriminating circumstances brought on record, and stated that he was having acquaintance with the complainant/1st respondent for about 15 years, and the complainant used to visit his house. In the year 1997, he lost his cheque book and Ext.P1 cheque bearing No.2249 is one among the cheque leaves in the cheque book lost. Immediately, he informed the bank and gave a stop payment letter, and the account was closed in the year 1997 itself. From the cheque book lost, except Ext.P1 cheque, no other cheques were seen presented by anybody before the bank so far. He came to know about possession of Ext.P1 cheque by the complainant only when he received the lawyer notice. That cheque was never issued towards discharge of any legally enforceable debt, and he never filled up that cheque in favour of the 1st respondent/complainant.
4. DW1 was examined and Ext.D1 reply notice was marked, as defence evidence from the part of the revision petitioner.
5. On appreciating the facts and evidence and on hearing the rival contentions, the trial court found the revision petitioner guilty under Section 138 of the NI Act and he was convicted and sentenced to undergo simple imprisonment for three months and to pay compensation of Rs.96,000/- with a default sentence of simple imprisonment for a further period of one month.
6. Aggrieved by the conviction and sentence, the revision petitioner filed Crl.Appeal No.275 of 2008, and the appellate court, on re-appreciation of the facts and evidence, found that there was no reason to interfere with the conviction under Section 138 of the NI Act and upheld the same. But the substantive sentence was modified and reduced to simple imprisonment for one month, without altering the compensation part and its default sentence.
7. Now this Court is called upon to verify the legality, propriety and correctness of the impugned judgment of conviction and sentence imposed on the revision petitioner.
8. Heard learned counsel for the revision petitioner and learned counsel for the 1st respondent.
9. The main contention taken up by learned counsel for the revision petitioner is that there was no transaction between the revision petitioner and the 1st respondent, and Ext.P1 cheque was not supported by any consideration. There was no legally enforceable debt due from him, towards the 1st respondent/complainant. In order to substantiate that fact, learned counsel for the revision petitioner drew the attention of this Court to the averments in the complaint. The complaint starts with the sentence ‘That t
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