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2011 Supreme(Online)(KER) 16526

HIGH COURT OF KERALA
P.S.GOPINATHAN, J
M/S.PEEJAY PROPERTY DEVELOPMENT – Appellant
Versus
STATE OF KERALA – Respondent
Crl.Rev.Pet/623/2005



Advocates:
SMT.A.R.USHA 2) P.J.VARGHESE MANAGING PARTNER

A debtor remains liable under Section 138 unless full payment of the cheque amount is proven, irrespective of partial payments acknowledged.

Headnote:

Negotiable Instruments - Criminal Prosecution - Negotiable Instruments Act - Section 138 - The court upheld the conviction for cheque dishonor due to insufficient funds, emphasizing accountability for debt acknowledgment and the sufficiency of evidence against claims of partial payment.

Fact of the Case:

The complainant alleged that the accused issued a cheque for Rs.4,50,000 which was dishonored. Despite the accused claiming partial payment, evidence showed the full amount was due, leading to the trial court's conviction and sentence.

Issues: Whether the accused discharged their debt partially to warrant dismissal of the charge under Section 138 of the Negotiable Instruments Act.

Ratio Decidendi: Partial discharge does not negate liability under Section 138 if full payment was not established, affirming the obligation to clear the total amount owed.

Final Decision: Conviction affirmed; compensation restored to Rs.4,50,000.

Judgement Key Points

What is the effect of partial discharge on liability under Section 138 of the Negotiable Instruments Act?

What is the standard of proof required to uphold a conviction for cheque dishonour when partial payment is claimed?

What are the appellate court’s orders regarding compensation and sentences in Criminal Revision Petition No.623/2005 and related matters?


COMMON ORDER

These revisions are preferred assailing the judgment in Criminal Appeal No.442/2004 on the file of the Sessions Judge, (Ad hoc-I), Ernakulam. The revision petitioner in Criminal Revision Petition.No.623/2005 is the accused in C.C.No.2205/2001 on the file of Judicial Magistrate of First Class-I, Kochi. Petitioner in the other revision petition is the complainant (hereinafter, parties are referred to as the 'complainant' and 'accused'). The complainant prosecuted the accused before the Trial Court alleging offence under Section 138 of the Negotiable Instruments Act with a plea that the accused owed a sum of Rs.4,50,000/- to the complainant and in discharge of the same, Ext.P1 cheque dated 20/6/2000, drawn on Centurion Bank Limited was issued and that when presented for collection, Ext.P1 was dishonoured for insufficiency of funds. Despite the acknowledgment of notice demanding discharge, the liability was not discharged.

2. The accused pleaded not guilty. Therefore, they were sent for trial. Complainant was examined as PW1 and Ext.P1 to P7 were marked. On the side of the accused, DW1 and 2 were examined and D1 to D3 were marked. On appraisal of the evidence, the learned Magistrate arrived at a conclusion of guilt. Consequently, the accused were convicted and the first accused firm was sentenced to a fine of Rs.5,000/- The second accused was sentenced to simple imprisonment for 6 months with a direction to pay Rs.4,50,000/- to the complainant as compensation. In appeal, the learned Additional Sessions Judge though confirmed the conviction, substantive sentence awarded to the second accused was reduced to imprisonment till the rising of Court. The compensation amount was reduced to Rs.3,00,000/- from Rs.4,50,000/-.

3. Assailing the conviction and sentence as modified in appeal, the accused has filed the revision petition. Assailing inadequacy of the modified sentence, the complainant has also filed the revision.

4. Hearing the learned counsel for the complainant and perusing the judgment and evidence on record, I find that though, the accused had denied the charge, when questioned under Section 313 of the Code of the Criminal Procedure, the plea that was raised is that out of the amount covered by the cheque, Rs.3,37,000/- was paid by several instalments and only the balance Rs.1,17,000/- is remaining to be paid. It is in support of the plea of discharge, DW1 and 3 were examined and D1 series to D3 series were marked. In the light of the defence of the accused, going by the evidence of PW1 supported by Ext.P1 and P2, I find that complainant had succeeded to establish that a sum of Rs.4,50,000/- was due in discharge of which Ext.P1 cheque was issued. When presented for collection, as evidenced by Ext.P2 dishounour memo, the cheque was dishonoured for insufficient funds. Evidenced by Ext.P3 to P6, notice demanding discharge was caused to both accused and it was acknowledged by them. Admittedly, there is no full discharge of the liability. Partial discharge of the liability would not absolve the accused from prosecution. Therefore, the complainant was justified in launching the prosecution. DW1 is the second accused who represents the first accused firm. Ext.D1 series were relied on as the vouchers for the partial discharge. DW2, the supervisor of the complainant was examined to prove Ext.D1 series. But DW2 did not support. DW3 is the accountant of the accused. He was also examined to prove the discharge. The Courts below did not believe DW3, stating that he is an interested witness.

5. Scanning the evidence and the judgment impugned, I find that the DWs 1 to 3 were rightly disbelieved by the courts below. There is no error or impropriety or illegality committed by the Courts below in appraising the defence evidence regarding discharge. Therefore, I find that the Courts below are justified in rejecting the plea of partial discharge. Such being the evidence on record, I find that the conviction under challenge is based on c

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