Allowed

Kunjimoyin.v.G. v. P.P.Moideen

Kerala HC13 Aug 2013CRL.A/419/2002

Case brief

AI extract

What is this about?

In a criminal appeal concerning a cheque bounce case, the Court examined the defence that the account was closed before the cheque was drawn. Relying on Section 138 of the Negotiable Instruments Act and prior precedents, the Court held that retaining unused cheque leaves constitutes maintaining an account, allowing for conviction and sentencing despite the account closure.

What did the court decide?

The appeal was allowed, the acquittal judgment was set aside, and the respondent was convicted, sentenced to simple imprisonment, and fined Rs. 90,000.

Kunjimoyin.v.G. Vs P.P.Moideen — Cheque Dishonour | Kerala HC (2013)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE HARUN-UL-RASHID

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TUESDAY, THE 13TH DAY OF AUGUST 2013/22ND SRAVANA, 1935

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CRL.A.No. 419 of 2002 ( ) --------------------------

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AGAINST THE ORDER/JUDGMENT IN Crl.MC 5200/2002 of HIGH COURT OF KERALA DATED 4.6.2002

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AGAINST THE ORDER/JUDGMENT IN ST 2467/1999 of JUDICIAL FIRST CLASS MAGISTRATE-II,PERINTHALMANNA DATED 23.3.2002.

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APPELLANT/COMPLAINANT:

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KUNJIMOYIN V.G.,

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S/O.MOHAMMED, VARANGODAN HOUSE, CHAMBRASSERY P.O. KODASSERY, MALAPPURAM DISTRICT.

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BY ADV. SRI.K.M.SATHYANATHA MENON

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RESPONDENT(S)/ACCUSED & STATE:

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P.P.MOIDEEN, S/O.MOHAMMED, PAPPADATH HOUSE, PANTHALOON, MALAPPURAM.

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STATE OF KERALA, REP. BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM

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R1 BY ADV. SRI.BABU S. NAIR R1 BY ADV. SMT.SMITHA BABU

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R2 BY PUBLIC PROSECUTOR SRI.VIJU THOMAS.

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THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 13-082013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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AL/-

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HARUN-UL-RASHID, J.

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Crl.Appeal No. 419 of 2002

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Dated this the 13^th day of August 2013.

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JUDGMENT

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The complainant in S.T.No. 2467/1999 on the file of the

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Judicial First Class Magistrate Court-II, Perinthalmanna is the appellant.

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The appeal is directed against the judgment dated 23.3.2002. The court below acquitted the accused under Section 255(1) of Cr.P.C finding that, the complainant has not succeeded in proving the guilt of the accused, beyond reasonable doubt. Parties are hereinafter referred to as arrayed in the S.T. Case.

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The complainant was examined as PW1. PW2 & PW3 were also examined. The accused did not adduce any evidence. The case of the complainant is that, the accused borrowed an amount of Rs.60,000/- from him on 10.9.1998, and that the accused promised to repay the amount within six months. When the complainant demanded for money, the accused issued Ext.P1 cheque dated 6.4.1999 drawn on South Malabar Gramin Bank

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Panthalloor. The complainant presented the cheque through Federal Bank, Pandikad branch and the same was returned with a memo 'account closed'. The complainant issued lawyer notice to the accused, intimating the facts of dishonour of the cheque.

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Ext.P1 is the cheque dated 6.4.1999. The complainant presented Ext.P1 cheque for collection. It was returned with a memo 'account closed'. Ext.P2 is the memo issued from the bank. On 28.4.1999, the complainant issued lawyer notice. Copy of the lawyer notice with postal acknowledgment receipt is marked as Ext.P3 series. The accused received notice on 4.5.1999. The acknowledgment card is marked as Ext.P4. The accused neither paid the amount nor send a reply. The above said facts were spoken by the complainant as PW1.

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PW2 is the Manager of the South Malabar Gramin Bank, Panthalloor Branch. He testified before the court that, the accused was having an account in his bank, the account No. is 1/93-94 and that the said account was closed on 12.7.1994. The certified copy of the ledger extract of the account of the accused is produced and marked as Ext.P5. PW3 is the Manager of the Federal Bank, Pandikkad. He proved Ext.P6 memo dated 20.4.1999 issued from the bank stating

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that Ext.P1 cheque is dishonoured. Counsel for the accused contended before the court below that prosecution under Section 138 of the N.I. Act will not lie against the accused, as there is no account in the name of the accused at the time of issuance of cheque. It is pointed out that, as per Ext.P2, the reason for dishonour of cheque is shown as 'account closed'. The court below considered the point as to whether there was an account in the name of the accused at the time of drawing Ext.P1 cheque. The court relying on Ext.P5 certified copy of the ledger folio extract, found that, there is no amount in the account after 12.7.1994. The court held that, the complainant has not produced any document to show that the account of the accused is alive at the time of issuance of the cheque. The court below relied on the decision in Japahari V. Priya reported in (1993 (2) K.L.T 141) in which it was held that for the prosecution of the offence under Section 138 of the Act, there must have been an account maintained by the drawer at the time when the cheque was drawn. The court below dismissed the complaint, finding that the complainant has failed to prove that, the accused has an account with the bank at the time of issuance of Ext.P1 cheque.

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Learned counsel for the appellant placed reliance on the decision in Salim Vs. Thomas reported in (2004(1) KLT 816) . In that case, the account on which cheque was drawn was closed by the accused long earlier. The cheque was dishonoured on the ground that the account was closed. This Court discussed the reasons in Japahari V. Priya reported in ( 1993 (2) K.L.T. 141) and the later decision in Joseph v. Philip Joseph reported in (2000(2) KLJ 679) which followed the observations in Japahari's case and after taking note of the decision in Joseph v. Philip Joseph (cited supra) a contrary view was taken. This Court also discussed the decision in Vathsan v. K.K.Japahari reported in (2003(3) KLT 972). The Division Bench in the said decision has preferred a wider interpretation. This Court in Salim V. P.J.Thomas reported in (2004(1) KLT 816) held that the legislature must have felt that the expression “an account maintained by him” would normally cover all cases. A mischievous account holder if he retains a cheque leaf after closure of the account to defraud an honest payee should not be permitted to go out of the net cast by Section 138 of the N.I.Act. Such an interpretation would defeat the purpose of the statute. The same has to be avoided.

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A person like the accused in this case who closes the account with his bank but retains unused cheque leaves with him without surrendering the same to the bank must certainly be held to continue to maintain the account, at least for the purpose of Section 138 of the Negotiable Instruments Act, notwithstanding the fact that he had instructed his bank to close the account. It is also held that it is the duty of every bank and every customer to insist and ensure that all unused cheque leaves are returned to the bank before the account maintained by him is closed. Only when that happens can it be held that he has ceased to maintain the account with the bank.

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The Division Bench of this Court held that this makes it clear that when a person draws a cheque, he will believe that the cheque will, in no case, be dishonoured. Therefore, such a defence is not allowed as per Section 140 of the Act. Therefore, once a person had issued a cheque drawn on an account, which he was holding in the bank, necessarily, he cannot take up a defence that he did not have a subsisting account on the date of drawal of the cheque.

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The principles laid down by this Court in the later decision would show that the accused who closed the account

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with his bank retained the unused cheque leaves without surrendering the same to the bank certainly be held to continue to maintain the account at least for the purpose of Section 138 of the Negotiable Instruments Act. In this case, the only defence of the accused is that, offence under Section 138 of the N.I Act will not lie against the accused, as there is no account in the name of the accused, at the time of issuance of the cheque. He has no case that he has not executed the cheque nor it was signed by him.

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In the above said facts and circumstances and legal position explained above, this Court is inclined to find that the accused is guilty of the offence under Section 138 of the N.I.Act. His conduct in retaining the unused cheque leaves with him without surrendering the same to the bank and issued one of such cheque leaves to the complainant must certainly be held to continue to maintain the account at least for the purpose of Section 138 of the N.I. Account. Ext.P1 cheque is dated 6.4.1999. The amount was borrowed by the accused on 10.9.1998. For the last 14 years, the complainant was dragging the matter before the Court.

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In the result, the appeal is allowed. The judgment under challenge is set aside. The respondent/accused is found guilty of the offence under Section 138 of the N.I. Act and is convicted. The accused is sentenced to undergo simple imprisonment till the rising of the court and to pay to the complainant the fine amount of Rs. 90,000/- (Rupees Ninety Thousand only) in default, to undergo simple imprisonment for a period of six months.

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Sd/- HARUN-UL-RASHID,

al/-

True copy

P.A. To Judge

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