An individual can only be held liable under Section 138 of the NI Act if they are the drawer of the cheque and maintain the account from which it is issued.

O R D E R

The accused Nos.1 & 2 in S.T. No.2696/2017 on the files of the Judicial First Class Magistrate Court-I, Ettumanoor, has filed this petition under Section 482 of the Code of Criminal Procedure, 1973, to quash the proceedings against them in the aforesaid case. The allegation against the petitioners is that they committed the offence punishable under Section 138 of the Negotiable Instruments Act,1881(in short, ‘ NI Act’).

2. The case of the complainant/second respondent is summarised as follows:

The petitioners who conduct money lending business under the name and style “P.K. Financiers” availed a loan of Rs.85,00,000/- from the complainant during the year 2012-2013. Towards the repayment of the said amount, two cheques of Rs.30,00,000/- each, and one cheque for Rs.25,00,000/- were issued to the complainant. Among the above three cheques, the cheque dated 10.05.2007 with Number 592704, was drawn on the account of the proprietor (first petitioner/ first accused) of P.K. Financiers and executed by the second accused/ second petitioner as the authorised signatory. The aforesaid cheque, when presented for collection, was dishonoured due to insufficiency of funds in the account of the drawer. Though the complainant issued legal notice demanding payment of the cheque amount, the petitioners did not care to make payment of the cheque amount. Thus, the petitioners committed the offence punishable under Section 138 of the NI Act.

3. In the present petition, the petitioners would contend that they are totally innocent and that a false case has been foisted against them. It is further contended by the petitioners that in connection with the dishonour of one of the three cheques issued by the petitioners, criminal prosecution launched against them as S.T.No.27/2017 on the files of the Judicial First Class Magistrate Court-II, Ettumanoor, has resulted in the acquittal of the petitioners, and hence the criminal prosecution launched against them in S.T.No.2696/2017 will not stand.

4. Heard the learned counsel for the petitioners, the learned counsel for the complainant/second respondent and the learned Public Prosecutor representing the State of Kerala.

5. The contention of the petitioners that their acquittal in S.T.No.27/2017 has to be taken as a reason to terminate the prosecution proceedings against them in S.T.No.2696/2017, has no legal basis. It is to be noted that both the above cases arose out of the dishonour of two distinct cheques said to have been executed and issued by the petitioners. The mere fact that the aforesaid cheques were issued towards repayment of the amount due to the complainant by way of instalments, cannot be taken as a ground to seek the termination of the prosecution proceedings in S.T.No.2696/2017, in view of the acquittal of the petitioners in S.T.No.27/2017. In S.T. No.2696/2017, the Trial Court has to evaluate the evidence adduced independently and decide whether the offence under Section 138 of the NI Act is brought out.

6. The learned counsel for the petitioners submitted that, at present, the challenge against the criminal prosecution launched in S.T.No.2696/2017 is based on a totally different ground. It is pointed out that the complaint filed by the second respondent itself would reveal that the criminal prosecution launched against the petitioners for the dishonour of a cheque mentioned in the aforesaid case is prima facie unsustainable, since the said cheque has not been drawn by the proper person on an account maintained by him. Adverting to the averments in paragraph No.5 of Annexure-I co