Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2003 Supreme(Mad) 582

IN THE HIGH COURT OF KERALA AT ERNAKULAM
R. Basant, J.
Rajan
Versus
Sharafudheen
Crl.A.No. 830 of 1993.
Decided On : 04 April 2003

Advocates:
M. Ramesh Chander, for Appellant.
SV. Balakrishna Iyer and P.B. Krishnan, for Respondent.

Non-mention of the words refer drawer in the complaint not fatal.

Headnote:Negotiable Instruments Act, 1881-Section 138-Dishonour of Cheque-Conviction-Endorsement on the cheque refer-Endorsement on the cheque refer drawer not a ground for acquittal because the expression refer drawer implies insufficiency of funds.

Judgement Key Points

Key Points: - The court held that the endorsement "refer to drawer" ordinarily indicates insufficiency of funds, and the complaint, along with the notice Ex.P-10 and sworn statements, supports this ground [21000282790006][21000282790007][21000282790009]. - Ex.P-13 (bank extract) was admitted and considered despite imperfect certification under Sec. 2(8); the Bombay Bombay decision cited supports its admissibility where no prejudice is shown [21000282790012][21000282790014][21000282790015]. - The appellate court found the ingredients of Section 138 established and convicted the accused, setting aside the acquittal and imposing fine with compensation under Sec. 357(1) Cr.P.C. [21000282790016][21000282790018] (!) (!) . - The judgment discusses the appropriate standard of proof under Sec. 3 of the Evidence Act for determining dishonour due to insufficiency of funds [21000282790007]. - The decision emphasizes that the complaint need not be read in a ritualistic or pedantic manner and may rely on accompanying documents and statements to interpret "refer to drawer" as indicating insufficient funds [21000282790006]. - The court acknowledges and addresses objections to Ex.P-13’s certification and nonetheless determines its relevance and admissibility in the case [21000282790012][21000282790015].

What is the effect of the endorsement "refer to drawer" on establishing insufficiency of funds under Section 138 NI Act?

What are the admissibility considerations of Ex.P-13 under Bankers’ Book Evidence Act, Sec. 2(8) and Sec. 4?

What is the appropriate scope of appellate interference when a trial court’s acquittal is challenged in a NI Act cheque bounce case?

JUDGMENT: The complainant is the appellant. The complaint filed by him alleging commission of the offence punishable under Sec. 138 of the Negotiable Instruments Act against the accused ended in acquittal.

2. The complainant alleged that the accused had issued cheques for Rs. 90,000 to him for the discharge of a legally enforceable debt/liability. The said cheques when presented for encashment were dishonoured by the bank on the ground of insufficiency of funds. Notice of demand was issued as insisted by Sec. 138 of the Negotiable Instruments Act. It was duly received and acknowledged. But no payment was made as demanded. It is in these circumstances that the complainant came to court with this complaint.

3. Cognizance was taken by the learned Magistrate. The accused entered appearance and denied the offence alleged against him. Thereupon the complainant examined himself as P.W. 1. An official of the drawee bank was examined as P.W. 2. Exs.P-1 to P-13 were marked.

4. The accused denied all circumstances which appeared in evidence and which were put to him. He admitted that the cheques were written on cheque leaves issued to him by his bank to operate his account. He also admitted his signatures in the cheques. He further conceded that he had handed over the cheques to the complainant. But he took up the stand that they were not issued for the due discharge of any legally enforceable debt/liability. According to him those cheques were handed over only as security for the due payment of amounts which may become due from certain other persons with whom the complainant had entered into financial transactions as introduced by the accused. No defence witness were examined. Ex.D-1 was marked.

5. The learned Magistrate on an anxious consideration of all the relevant inputs came to the conclusion that the complainant has not succeeded in proving the offence alleged against the accused. Accordingly, the learned Magistrate proceeded to pass the impugned judgment of acquittal.

6. The learned counsel for the appellant/complainant and respondent/accused have advanced their arguments. The learned counsel for the appellant assails the impugned verdict of not guilty and acquittal. The acquittal is primarily based on two circumstances. They are:

(1) The averments in the complaint do not disclose that the cheque was dishonoured on the ground of insufficiency of funds.

(2) Ex.P-13, the extract of the account is not duly certified as insisted by Sec. 2(8) of the Banker’s Book Evidence Act.

7. The first ground for dismissal of the complaint is that the complaint does not reveal that the dishonour was on one of the two grounds specified under Sec. 138 of the Negotiable Instruments Act. It is by now trite that the complaint cannot be read ritualistically or in a pedantic manner. The complainant undoubtedly averred that the cheque was dishonoured by the bank and that such dishonour was on the ground “refer to drawer”. It is true that in the complaint it is not specifically averred that this ground “refer to drawer” means and implies insufficiency of funds. But in this context it must alertly be noted that along with the complaint the complainant had produced the registered notice of demand, Ex.P-10. In the said notice, Ex.P-10 it is very clearly averred that the cheques were dishonoured with the endorsement “refer to drawer which means that you had no funds in your bank”. The complaint must further be read, it is by now trite, along with the sworn statement of the complainant recorded by the learned Magistrate. In the sworn statement the complainant had clearly stated that the dishonour was on the ground of insufficiency of funds. It is by now trite that the expressions “refer to drawer” is nothing but a courteous expression employed by the bank to convey insufficiency of funds. Averments in the complaint read along with the documents produced with the complaint and the sworn statement of the complainant recorded by the learned Magistrate can leave no doubt i

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