JUDGMENT

Dated this the 3rd day of June, 2022 This appeal is directed against the judgment dated

05.05.2016 in S.T.C.No.819 of 2014 of Judicial First Class Magistrate Court-II, Mananthavady ( for short ‘the trial court’). The trial court has dismissed the complaint and acquitted the accused under Section 255 (1) of the Code of Criminal Procedure, 1973 (for short ‘Cr.P.C’) for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short the ‘NI Act’).

2. The trial court had framed the following points for adjudication.

“(i) Whether the complaint is bad for non impleadment of M/s. Astern Chits Private Limited as a party to the

proceedings?

(ii) Whether Ext.P1 cheque was drawn and delivered by the accused to the complainant in discharge of legally

enforceable debt?

(iii) Whether Ext.P1 cheque was bounced for insufficiency of funds in the account of the accused?

(iv)Whether the complainant has complied with statutory formalities directed by sections 138 (b) and

142(b) of the Negotiable Instruments Act?

(v) Whether the accused are guilty of the offence punishable under Section 138 of the Negotiable Instruments Act?

(vi) If so, what is the order or sentence to be passed to meet the ends of justice?”

3. Evidence was adduced by both parties. The complainant was examined as PW1 and Exts. P1 to P5 series and P6 and P7 were marked. On the side of the accused DWs 1 to 4 were examined and Ext.D1 was marked. Point No.(i) was found against the complainant and point Nos. (ii), (iii) and (iv) were found in favour of the complainant. Based on finding under Point No.1 the trial court had found that the complainant had failed to prove the offence under Section 138 of the N.I Act against the accused and therefore the latter are not liable to be punished and accordingly passed the judgment acquitting them.

4. The trial court has found that the complainant failed to array the company as accused in the case and to issue statutory notice to it and that is fatal. According to it complaint is bad for non-arraignment of the company as an accused in the case. Thus the trial court found point No.(i) against the complainant.

5. True that the company is not made as accused in the prosecution on hand. Since the available accused were acquitted for non-arraignment of the company as accused, the question that whether company is a necessary party in the prosecution or not is crucial for consideration in the case on hand. For that the pleadings of the complainant in the complaint are relevant. According to the complainant accused are Directors of M/s. Astern Chit Private Limited and the complainant has subscribed three chits with the Company for Rs.3,00,000/-, Rs.2,00,000/- and Rs.1,00,000/-, respectively. Installment dues under the chits were paid by the complainant. The complainant approached M/s.Astern Chits Pvt.Limited for obtaining Rs.4,85,000/- due to him. The accused issued a cheque for Rs.4,85,000/- drawn on State Bank of India, Mananthavady Branch to the complainant. The cheque was presented for collection but the same was returned for the reason ‘funds insufficient’. On 14.03.2013 a notice was issued by the complainant through his lawyer to the accused intimating him that the cheque was returned bounced. The amount covered by the cheque was also demanded. The notice taken up for service was evaded by both accused and therefore it was returned by the postal authorities with endorsement ‘unclaimed’. Despite receipt of notice the accused failed to pay the amount covered by the cheque. Therefore, alleging commission of the offence punishable under Section 138 N.I.Act, complaint was filed to launch the prosecution.

6. As the averments of the complainant in the complaint stand, money was due from the accused who are Directors of M/s.Astern Chits Pvt. Limited. According to him he approached the accused for return of Rs.4,85,000/- and they issued a cheque. The disputed cheque is marked in evidence as Ext.P1. A perusal of the cheque would reveal