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2023 Supreme(Online)(KER) 31787
HIGH COURT OF KERALA
A. BADHARUDEEN, J
PRANA EDUCATIONAL AND CHARITABLE TRUST
– Appellant
Versus
STATE OF KERALA – Respondent
Crl.Rev.Pet 1149 2019
C.S.MANU, SRI.S.K.PREMRAJ, SHRI.MANEESH NARAYANAN, SRI.S.R.SUNJITH, SR PP - K DENNY DEVASSY
A charitable trust can be prosecuted under Section 138 of the NI Act as it is recognized as a juristic person, binding its managing trustee to accountability.
Headnote:
Criminal - Negotiable Instruments Act - Sections [138, 141] - The court interpreted provisions regarding the prosecution of trusts under the NI Act, affirming that trusts can be penalized for cheque dishonor, establishing guided legal jurisdictions for enforcement.
Fact of the Case:
The accused issued a cheque for ₹9,50,000 to discharge a debt, which was dishonored due to insufficient funds, prompting the complainant to file a case under Section 138 of the Negotiable Instruments Act.
Issues: Whether a charitable trust can be prosecuted for a cheque dishonor under Section 138, and if it is recognized as a juristic person under Section 141 of the NI Act.
Ratio Decidendi: The court concluded that a charitable trust qualifies as an association of individuals, thus can be prosecuted for cheque dishonor under Section 138 of the NI Act, alongside holding the managing trustee accountable.
Final Decision: The revision petition was dismissed, confirming the conviction and sentencing of the accused.
ORDER
Dated this the 18th day of September, 2023 This revision petition has been filed under Sections 397 and 401 of Code of Criminal Procedure (hereinafter referred as Cr.P.C. for convenience). The revision petitioners are the accused in S.T. No.2278/2016 on the files of the Court of Special Judicial First Class Magistrate (N.I.Act Cases), Kozhikode and the appellants in Crl.A. No.176/2019 on the files of the Sessions Court, Kozhikode Division. The respondents herein are the original complainant as well as the State of Kerala.
2. I would like to refer the parties in this revision petition as 'complainant' and 'accused' hereinafter, for convenience.
3. Heard the learned counsel for the accused and the learned Public Prosecutor, representing State as well as the learned counsel appearing for the 2nd respondent/
complainant.
4. The case put up by the complainant before the trial court was that in order to discharge liability to the complainant and her husband to the tune of Rs.9,50,000/-, the 2nd accused issued cheque for Rs.9,50,000/- dated 03.04.2013 drawn on the account maintained by the 1st accused (Prana Educational and Charitable Trust) and the said cheque was dishonored for the reason “funds insufficient”. Accordingly, the complainant launched prosecution against the accused alleging commission of offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred as N.I.Act for convenience), since the accused failed to make the payment of the cheque amount on demand, within the statutory period.
5. Initially, the complaint was filed before the Judicial First Class Magistrate Court No.III, Kozhikode and the learned Magistrate took cognizance of the offence and numbered the case as C.C. No.499/2014. While so, in view of the decision of the Apex Court reported in[2014 (3) KLT 605] Dasharath Roopsingh Rathod v. State of Maharashtra and another, the complaint was represented before the Judicial First Class Magistrate Court-II, Mananthavadi and numbered as S.T. No.2205/2014. Then the case was returned to be presented before the Judicial First Class Magistrate Court-V, Kozhikode as per order dated 31.07.2015 on the ground of change of territorial jurisdiction in view of the amendment to Section 142 of Negotiable Instruments Act . Thereafter, the Judicial First Class Magistrate Court-V, Kozhikode returned the case records to Judicial First Class Magistrate Court-II, Mananthavadi and the case got renumbered as S.T.
No.731/2016.
6. Learned Judicial First Class Magistrate Court-II, Mananthavadi secured the presence of accused for trial and finally tried the matter. During trial, PWs 1 and 2 were examined and Exts.P1 to P13 were marked on the side of the complainant. After questioning the accused under Section 313(1)(b) of the Cr.P.C., when opportunity was given, no witness examined on the side of the accused, but Ext.D1 marked on the side of the accused.
7. On appreciation of evidence, the trial court convicted and sentenced the accused as under:
“In the result, the first accused is convicted and sentenced u/s 255(2) of the Code of Criminal Procedure to pay fine of Rs.1000/- (Rupees One Thousand Only) and the second accused is convicted and sentenced to pay a fine of Rs.9,50,000/- for offence under section 138 of the Negotiable Instruments Act . In default of payment of fine, the second accused shall undergo simple imprisonment for a period of 5 (Five) months. The fine amount realised from the accused shall be paid to the complainant as compensation u/s. 357 (1) (b) of .”
8. Although, the accused challenged the conviction and sentence imposed by the trial court, before the Sessions Court, Kozhikode, the learned Sessions Judge also confirmed the conviction and sentence imposed by the trial court, as per judgment in Crl.A. No.176/2019 dated
16.09.2019.
9. Challenging the concurrent verdicts of conviction and sentence imposed by the trial court as well as the Appellate Court, this revision petition has been filed. At
