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IN THE HIGH COURT OF KERALA AT ERNAKULAM
V.G. ARUN
Prabhakaran P.V. S/o T.C. Velayudhan – Appellant
Versus
Jeena. P.P W/o Anish Kumar – Respondent
ORDER :
1. The petitioner is the accused in S.T. Nos.894, 895, 896, 897, 898, 899, 900 and 901 of 2021 pending on the files of the Special Judicial Magistrate of First Class (NI Act Cases), Kozhikode. The cases originated from complaints filed by the 1st respondents alleging commission of the offence punishable under Section 138 of the Negotiable Instruments Act (“the N.I.Act” for short) by the petitioner. Briefly stated, the allegations are to the following effect. The accused borrowed a total amount of Rs.1,12,25,000/- from the complainants in tranches and towards discharge of that liability, issued 19 cheques. The cheques, on presentation through the complainants’ Bank, viz; the Punjab National Bank, were returned dishonoured for insufficiency of funds in the account of the accused. Although notices demanding payment of the amounts covered by the cheques were issued and served on the accused, instead of paying the amount, the accused sent replies denying the liability.
2. On receipt of summons, the petitioner entered appearance and thereafter filed petitions under Sections 204 and 461 of the Code of Criminal Procedure with the prayer to drop the proceedings, since the averments in
Cheques drawn on a non-existent bank are invalid, and dishonour of such cheques does not result in liability under Section 138 of the Negotiable Instruments Act.
Cheques drawn on a defunct bank do not attract liability under Section 138 of the Negotiable Instruments Act.
Cheques drawn on a non-existent bank are legally invalid and cannot attract liability under Section 138 of the Negotiable Instruments Act.
An invalid cheque, due to bank merger, does not attract liability under Section 138 of the Negotiable Instruments Act; courts can quash proceedings lacking legal enforceability.
A cheque drawn on a bank that has ceased to exist loses its identity as a negotiable instrument, rendering any related criminal proceedings invalid.
The legal presumption under Section 139 of the NI Act favors the complainant, and factual disputes must be resolved at trial, not pre-trial.
The complainant must prove the existence of a legally enforceable debt for a successful prosecution under Section 138 of the Negotiable Instruments Act.
The court affirmed that the applicant failed to establish a legally enforceable debt under Section 138 of the NI Act, leading to the dismissal of the appeal for leave.
:DISHONOUR OF CHEQUE – ACQUITTAL UNDER - under Section 139 of the N.I. Act, there is a presumption that the holder of the cheque received it for the discharge of debt or liability, but the existence ....
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