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2005 Supreme(Online)(Ker) 1493

KERALA HIGH COURT
, J
Target Overseas Exports (P) Ltd. v. Iqbal
Crl. R. P. No. 618 of 2004



Advocates:
For the Appellants/Petitioners: [List of names]
For the Respondents: [List of names]

Only the drawer of a cheque is entitled to notice under Section 138(b) of the Negotiable Instruments Act, not signatories facing indictment under Section 141.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138 and 141 - Notice under S.138 - Entitlement of individuals facing indictment under S.141 to notice under S.138 - The court held that the drawer, i.e., the company, is the only entity entitled to notice under S.138(b), not the signatories. (Paras 16-19)

(B) Revision Jurisdiction - The scope of a court's revision jurisdiction should only intervene in errors resulting in a miscarriage of justice; reliability on underlying factual conclusions is necessary. (Para 6)

Facts of the case:
The accused faced charges under S.138 of the N.I. Act for issuing a dishonored cheque of Rs. 1,78,000/- linked to their company's debt, with procedural disputes surrounding service of notice. (Paras 1-4)

Findings of Court:
The conviction was affirmed due to established liability under S.138, while clarifying that only the drawer is entitled to notice under S.138(b). (Paras 16-19)

Issues: The key legal question addressed was whether individuals facing indictment under S.141 can claim notice per S.138(b). (Paras 12-12)

Ratio Decidendi: Only the drawer of the cheque holds entitlement to notice for dishonor to allow the opportunity to rectify; signatories do not retain this right under S.138. (Paras 17-18)

Result: Revision petition partially allowed; convictions upheld but sentences modified, emphasizing the need for adequate compensation to the complainant.

1 Is a person facing indictment under S.141 of the N.I. Act entitled to notice under proviso (b) to S.138 of the N.I. Act? This is the question of law of importance raised in this case.

2 The revision is directed against the concurrent verdict of guilty, conviction and sentence in a prosecution under S.138 of the N.I. Act. The complainant alleged that the 1st accused company, to discharge a legally enforceable debt/liability to him, had issued Ext. P1 cheque for an amount of Rs. 1,78,000/-. The cheque was signed jointly by the 2nd accused, its Managing Director and the 3rd accused, another Director. The cheque, when presented for encashment, was dishonoured on the ground of 'insufficiency of funds'. Thereupon, Ext. P5 notice of demand was issued to all the three accused. Notices issued to the 1st and 2nd accused were returned unserved. Notice issued to the 3rd accused was allegedly served on him and acknowledged under Ext. P5. There was no reply. No payment was forthcoming. It was, in these circumstances, that the complainant came to Court with the complaint under S.138 of the N.I. Act.

3 PW 1 was examined and Exts. P1 to P10 were marked by the complainant. The accused denied the offence alleged against them. They raised various contentions. It was contended that the cheque was not issued for the due discharge of any legally enforceable debt/liability. Signature of the 2nd accused in the cheque was disputed. It was further contended that the 2nd accused is 'K. J. Joseph' as shown in the complaint and not 'Savio Joseph' in whose name notice of demand -- Ext. P5 was allegedly issued. It was further contended that there was no proper service of notice on accused No. 1 and 2. With the help of Ext. P8, it was contended that notice was not served on the 3rd accused as alleged. The 1st accused took up a plea of alibi. DWs 1 to 4 were examined on the side of the accused. The accused relied on Exts. D1 to D3. DW 1 is one Beckkar referred to in Ext. D1 letter. It is the case of the accused that the cheque was received by the complainant under Ext. D1 and not in the circumstances spoken to by PW 1. DW.3 is the 2nd accused. DWs 2 and 4 were examined and Exts. D2 and D3 were marked by the defence in the attempt to contend that DW.2 was not available in Kerala on the date when the cheque was allegedly handed over to PW 1, he having allegedly gone to Assam in connection with his business.

4 The Courts below concurrently came to the conclusion that all the ingredients of the offence punishable under S.138 and 141 of the N.I. Act have been established. Accordingly, they proceeded to pass the impugned concurrent judgments.

5 Arguments have been advanced before me by the learned counsel for the rival contestants. The learned counsel for the petitioners assailed the impugned judgments on various grounds.

6 Before proceeding to consider the grounds of challenge, I must alertly remind myself that the jurisdiction sought to be invoked is the one in revision. It is by now trite that a Court of revision should not interfere with the concurrent findings of fact unless such findings are grossly erroneous and result in miscarriage of justice. Thus, after reminding myself of the nature and contours of my jurisdiction in revision, the contentions raised shall be considered.

7 It is first of all contended that the cheque is not issued for the due discharge of any legally enforceable debt/liability. Even going by the case of the accused, this contention cannot succeed. They have relied on Ext. D1 which clearly shows that DW 1 had handed over the cheque in question to the complainant -- PW 1. DW 1 is admittedly a person who acts as an agent of the 1st accused company. Ext. D1 shows that the cheque was issued by the company and acknowledged by PW 1 as one issued for the due discharge of a liability which DW 1 owed to the complainant. Even assuming that there is an incongruity between the version pleaded by the complainant in the complaint/notice and in the defence



































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