Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Ker) 6476

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE M.B. SNEHALATHA RD FRIDAY, THE 23 DAY OF JANUARY 2026 / 3RD MAGHA, 1947 CRL.REV.PET NO. 92 OF 2019 AGAINST THE JUDGMENT IN Crl.A NO.183 OF 2017 OF IV ADDITIONAL SESSIONS COURT, ERNAKULAM ARISING OUT OF THE JUDGMENT IN ST NO.5589 OF 2011 OF JUDICIAL MAGISTRATE OF FIRST CLASS -III, ERNAKULAM REVISION PETITIONER/APPELLANT/2ND ACCUSED:
V.J.JOSEPH, FORMER MANAGING DIRECTOR, J & A FOUNDATION PVT LTD., (NOW UNDER LIQUIDATION) RESIDING AT VILANGUPARA HOUSE, GEETHANJALI ROAD, VYTTILA, KOCHI-682 019 BY ADVS.
SRI.P.MURALEEDHARAN (IRIMPANAM)
SRI.M.A.AUGUSTINE SRI.P.SREEKUMAR (THOTTAKKATTUKARA)
SMT.SOUMYA JAMES SHRI.THOMAS JACOB RESPONDENTS/RESPONDENTS/COMPLAINANT/1ST ACCUSED:
1 THE INDIA CEMENTS LIMITED
41/697,ICL HOUSE, KRISHNASWAMY ROAD, KOCHI-35, REPRESENTED BY ITS MANAGER (ACCOUNTS) AND POWER OF ATTORNEY HOLDER MR.K.SRIDHARAN
2 J AND A FOUNDATIONS PVT. LTD (UNDER LIQUIDATION ) REPRESENTED BY OFFICIAL LIQUIDATOR, HIGH COURT OF KERALA, ERNAKULAM, KOCHI-682 031
3 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, ERNAKULAM-682 031 BY ADVS.
SRI.K.SRIKUMAR (SR.)
SHRI.K.MONI SRI.K.MANOJ CHANDRAN SMT.MAYA M.N – PUBLIC PROSECUTOR THIS CRIMINAL REVISION PETITION HAVING COME UP FOR HEARING ON 15.1.2026, THE COURT ON 23.01.2026 DELIVERED THE FOLLOWING:
CR M.B.SNEHALATHA, J -------------------------------------------
Crl.R.P.No.92 of 2019 -------------------------------------------
Dated this the 23^rd January, 2026

Advocates:
For the Appellants/Petitioners: SRI.P.MURALEEDHARAN (IRIMPANAM), SRI.M.A.AUGUSTINE, SRI.P.SREEKUMAR (THOTTAKKATTUKARA), SMT.SOUMYA JAMES, SHRI.THOMAS JACOB
For the Respondents: SRI.K.SRIKUMAR (SR.), SHRI.K.MONI, SRI.K.MANOJ CHANDRAN, SMT.MAYA M.N – PUBLIC PROSECUTOR

A Managing Director can be held liable for dishonour of cheques under Section 138 of the Negotiable Instruments Act if in charge of business at the time of the offence.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Dishonour of cheques - The accused, serving as Managing Director, issued cheques for payment towards credit transactions, which were dishonoured for insufficient funds - The trial court found accused guilty and imposed a sentence of imprisonment and compensation under Section 357(3) Cr.P.C - No merit found in the revision petition challenging the conviction. (Paras 1, 6, 19)

(B) Vicarious Liability - Under Section 141, a Managing Director can be held liable for offences committed by the company if in charge of business at the time of the offence - The complainant successfully established the 2nd accused's liability due to his role and admission of the transaction. (Paras 14, 15, 18)

Facts of the case:
The revision petitioner, as MD of a company, issued cheques (Exts.P2-P4) for ₹2 lakhs each but they were dishonoured due to insufficient funds. Notices were served but payment was not made.

Findings of Court:
The courts maintained the conviction and modified the sentence, finding proper appreciation of facts and evidence.

Issues: Whether the courts erred in conviction as per evidence and liability under Section 138.

Ratio Decidendi: The courts correctly adjudicated the evidence presented, confirming that the accused was in charge of the company and thereby liable for the offence.

Result: Revision petition dismissed.

Table of Content
1. overview of parties and legal context. (Para 1 , 2)
2. nature of the transaction and dishonour of cheques. (Para 3 , 11)
3. trial outcome and appeal considerations. (Para 4 , 6 , 8)
4. arguments presented by parties. (Para 9 , 10)
5. court's reasoning on legal liability under n.i act. (Para 14 , 15 , 17 , 18 , 19)
6. final decision and confirmation of sentence. (Para 20)

ORDER

Revision Petitioner is the 2^nd accused in S.T.No.5589/2011 of Judicial First Class Magistrate Court III, Ernakulam and the appellant in Crl.A. No.183/2017 of Sessions Court, Ernakulam. He calls into question the judgment of conviction and order of sentence against him for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'N.I Act).

2. The parties shall be referred to as the complainant and the accused as arraigned before the trial court.

3. The complainant is a company registered under the Indian Companies Act and it is engaged in manufacturing and distribution of cement. 1^st accused is a Private Limited Company. 2^nd accused is the Managing Director of the 1^st accused company and he is in charge and responsible for the day-to-day affairs of the 1^st accused company. Accused had a business relationship with the complainant company and the accused had purchased cement from the complainant company on a credit basis in the course of their regular transaction. Towards partial discharge of the amount due to the complainant company, accused issued Exts.P2 to P4 cheques of ₹2 lakhs each in favour of the complainant company. Upon presentation of Exts.P2 to P4 cheques for collection, the same were returned dishonoured due to insufficient funds in the account of the accused. Upon receipt of Exts.P5, P5(a) and P5(b) dishonour memos from the bank, complainant caused to sent Ext.P6 lawyer notice to both accused, intimating the factum of dishonour of cheques and demanding the amount covered by Exts.P2 to P4 cheques. Accused accepted the notice and sent Ext.P9 reply notice. Though in the reply notice accused agreed to pay the amount, accused failed to pay the amount covered by Exts.P2 to P4 cheques and thereby committed the offence punishable under Section 138 of N.I.Act.

4. Both accused faced trial and denied their liability to pay any amount to the complainant and denied the issuance of Exts.P2 to P4 cheques to the complainant in discharge of any debt or liability.

5. Evidence consists of the oral testimonies of PW1 and documents marked as Exts.P1 to P11. No defence evidence was adduced by the accused.

6. After trial, the learned Magistrate found both accused guilty under Section 138 N.I Act. A2 was sentenced to undergo simple imprisonment for a period of one year and to pay ₹6 lakhs as compensation to the complainant under Section 357 (3) Cr.PC. In default of payment of compensation to undergo simple imprisonment for a period of three months.

7. In the appeal preferred by the 2^nd accused as Crl.A.No.183/2017 before the Sessions Court, Ernakulam, the conviction under Section 138 N.I Act was confirmed, but the sentence was modified. The substantive sentence of imprisonment of one year was reduced to imprisonment till the rising of the court. The direction to pay compensation of ₹6 lakhs to the complainant under Section 357 (3) Cr.P.C imposed by the trial court was not interfered with in appeal.

8. Challenging the finding of conviction and sentence, A2 has preferred this revision petition, contending that the trial court and the appellate court went wrong in appreciating the evidence in its correct perspective; that the conviction and sentence against A2 are bad in law.

9. Per contra, the learned counsel for the complainant argued that there are absolutely no reasons to unsettle the findings of the trial court and the appellate court and the revision is devoid of any merit.

10. The point for consideration is whether the impugned judgment needs any interference by this Court.

11. The evidence on record would sho

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