Dismissed

Eurotech Polymers v. State of Kerala

Kerala HC21 Oct 2022Crl.MC/5046/2022

Case brief

AI extract

What is this about?

The Kerala High Court dismissed criminal miscellaneous petitions challenging an order directing the accused to pay 20% interim compensation under Section 143A of the Negotiable Instruments Act. The Court held the order was legal and correct, allowing recovery without a formal application and without recorded reasons.

What did the court decide?

The petitions challenging the lower court's order directing interim compensation were dismissed as they were found to be devoid of merits.

Eurotech Polymers Vs State of Kerala — Cheque Dishonour | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MRS. JUSTICE MARY JOSEPH

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FRIDAY, THE 21ST DAY OF OCTOBER 2022 / 29TH ASWINA, 1944

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CRL.MC NO. 5043 OF 2022

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AGAINST THE ORDER/JUDGMENT IN CC 226/2022 OF JUDICIAL FIRST CLASS
MAGIST. COURT, CHOTTANIKKARA(TEMPORARY) DATED 17.05.2022

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PETITIONER/ACCUSED:

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1 EUROTECH POLYMERS PARAKKULAM, ANAKKARA P.O., PALAKKAD DISTRICT679551 REPRESENTED BY ITS MANAGING PARTNER ABDUL RASHEED, PIN - 679551

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2 ABDUL RASHEED M.C.,AGED 52 YEARS S/O UMMAR, MANIKULATHIL HOUSE, KALATHILPADI, ERAMANGALAM P.O., VELIYANKODE, MALAPPURAM DISTRICT- 679587 MANAGING PARTNER, M/S EUROTECH POLYMERS, PARAKKULAM, ANAKKARA P.O., PALAKKAD DISTRICT, PIN - 679587

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BY ADVS.ANAND KALYANAKRISHNAN

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 C.DHEERAJ RAJAN

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RESPONDENTS/STATE & DEFACTO COMPLAINANT:

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1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA, PIN - 682031

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2 BABU C.Y.,AGED 58 YEARS S/O YOHANNAN, CHAMAKKALAYIL HOUSE, KANAYANNUR, CHOTTANIKKARA P.O., ERNAKULAM, PIN - 682312

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OTHER PRESENT:

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PP SRI.V.S. SREEJITH

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THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION
ON 21.10.2022, ALONG WITH Crl.MC.5045/2022 AND CONNECTED
CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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-:2:-

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MRS. JUSTICE MARY JOSEPH

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FRIDAY, THE 21ST DAY OF OCTOBER 2022 / 29TH ASWINA, 1944
CRL.MC NO. 5045 OF 2022

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AGAINST THE ORDER/JUDGMENTCC 227/2022 OF JUDICIAL FIRST CLASS
MAGIST. COURT, CHOTTANIKKARA(TEMPORARY) DATED 17.05.2022

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PETITIONER/ACCUSED:

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1 EUROTECH POLYMERS PARAKKULAM, ANAKKARA P.O., PALAKKAD DISTRICT679551 REPRESENTED BY ITS MANAGING PARTNER ABDUL RASHEED, PIN - 679551

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2 ABDUL RASHEED M.C.,AGED 52 YEARS S/O UMMAR, MANIKULATHIL HOUSE, KALATHILPADI, ERAMANGALAM P.O., VELIYANKODE, MALAPPURAM DISTRICT- 679587 MANAGING PARTNER, M/S EUROTECH POLYMERS, PARAKKULAM, ANAKKARA P.O., PALAKKAD DISTRICT, PIN - 679587

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BY ADVS.ANAND KALYANAKRISHNAN

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 C.DHEERAJ RAJAN

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RESPONDENTS/STATE & DEFACTO COMPLAINANT:

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1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA, PIN - 682031

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2 BABU C.Y.,AGED 58 YEARS S/O YOHANNAN, CHAMAKKALAYIL HOUSE, KANAYANNUR, CHOTTANIKKARA P.O., ERNAKULAM, PIN - 682312

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THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON
21.10.2022, ALONG WITH Crl.MC.5043/2022 AND CONNECTED CASES, THE
COURT ON THE SAME DAY PASSED THE FOLLOWING:

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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-:3:-

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MRS. JUSTICE MARY JOSEPH

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FRIDAY, THE 21ST DAY OF OCTOBER 2022 / 29TH ASWINA, 1944

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CRL.MC NO. 5046 OF 2022

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AGAINST THE ORDER/JUDGMENTCC 898/2021 OF JUDICIAL FIRST CLASS
MAGIST. COURT, CHOTTANIKKARA(TEMPORARY) DATED 17.05.2022

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PETITIONER/ACCUSED:

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1EUROTECH POLYMERS
PARAKKULAM, ANAKKARA P.O., PALAKKAD DISTRICT-
679551 REPRESENTED BY ITS MANAGING PARTNER ABDUL
RASHEED, PIN - 679551

¶44

2ABDUL RASHEED M.C.,AGED 52 YEARS
S/O UMMAR, MANIKULATHIL HOUSE, KALATHILPADI,
ERAMANGALAM P.O., VELIYANKODE, MALAPPURAM
DISTRICT- 679587 MANAGING PARTNER, M/S EUROTECH
POLYMERS, PARAKKULAM, ANAKKARA P.O., PALAKKAD
DISTRICT, PIN - 679587

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BY ADVS.ANAND KALYANAKRISHNAN
 C.DHEERAJ RAJAN

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RESPONDENTS/STATE & DEFACTO COMPLAINANT:

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1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA, PIN - 682031

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2 BABU. C.Y.,AGED 58 YEARS S/O YOHANNAN, CHAMAKKALAYIL HOUSE, KANAYANNUR, CHOTTANIKKARA P.O., ERNAKULAM, PIN - 682312

¶49

THIS CRIMINAL MISC. CASE HAVING COME UP FOR
ADMISSION ON 21.10.2022, ALONG WITH Crl.MC.5043/2022
AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED
THE FOLLOWING:

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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-:4:-

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- - - - Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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- - - - Dated this the 21^st day of October, 2022

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O R D E R

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Petitioners are accused in CC No.898/2021, 226/2022 and 227/2022 filed for prosecuting the accused for an offence under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’). Allegation was that cheques issued towards payment of cost of materials purchased were dishonoured for the reason, want of sufficient funds. In all cases the complaints have been taken on file after recording the sworn statement of the complainant and process was issued to the accused. On process being served, the accused entered appearance. Particulars of the offences alleged were read over and explained to the respective accused in the prosecutions. They pleaded not guilty. On an oral request made by the complainant before the court below, orders were passed. Copy of the proceedings containing

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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-:5:-

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the relevant orders are incorporated alongwith the petitions on hand as Annexure 2. Order dated 17.05.2022 is under challenge.

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The impugned orders read :

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“Complainant absent represented. Summons served to accused. Accused present represented. Sureties present. Accused enlarged on bail. Vakkalath already filed and copy already served. Particulars of offence read over and explained to accused to which he pleaded not guilty. Learned counsel for complainant submitted to invoke S.143A NI Act. Hence as per Section 143A NI Act, the accused is directed to pay 20 percentage of the amount of the cheque as interim compensation to the complainant. For payment of interim compensation 18.07.2022.”

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The impugned orders were passed by the court below in prosecutions numbered as above, launched by the 2^nd respondent herein under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’). The allegation in the complaints was that the cheques drawn and issued by the 1^st petitioner in favour of the 2^nd respondent were dishonoured for want of sufficient funds. According to the 2^nd respondent, the petitioner is an establishment dealing with manufacture, marketing, sale and

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022 -:6:-

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distribution of “Hanbaz water tank cleaner” and an agreement was entered into with the 2^nd respondent on 04.04.2019 for the distributionship of the above said product and for the sale, a sum of Rs.10,50,000/- was received by the 2^nd petitioner from the 2^nd respondent in two instalments through bank transfer. The case of the 2^nd respondent was that most of the delivered units of the water tank cleaner were faulty. The first batch of materials being defective, the 2^nd respondent informed the 2^nd petitioner about his unwillingness to continue with the business. Thereupon the 2^nd petitioner executed and handed over cheques drawn on State Bank of India for different sums towards the costs of materials undelivered. Cheques were presented for collection but, dishonoured for want of sufficient funds. The factum of dishonour of the cheques was intimated to the 2^nd petitioner who had agreed to pay back the entire amount after deducting the value of the materials already sold out by the 2^nd respondent. Dishonoured cheques were returned to the 2^nd petitioner. The matter was settled for an amount of Rs.8,59,325/- and the petitioner has undertaken to pay it to the 2^nd respondent. The

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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-:7:-

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complaints were taken on file after recording the sworn statement of the 2^nd respondent in each case. Accused entered appearance on receipt of summons and enlarged on bail in each cases. Particulars of the offences alleged were read over and explained to him and he pleaded not guilty.

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Thereupon the learned counsel for the complainant urged to invoke Section 143A N.I. Act. The court below directed the accused to pay 20% of the amount covered by the cheques as interim compensation to the complainant and posted for payment of the same to 18.07.2022. The petitioner/accused was aggrieved by the order issued as above and accordingly seeks to quash the same for reasons stated hereinbelow.

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According to the learned counsel, Section 143A empowers the court to pass an order against the accused directing him to pay interim compensation to the complainant, which shall not exceed 20% of the cheque amount. According to him, the word used in the provision being ‘may’ and in view of the direction it incorporates that compensation to be paid shall not exceed 20% of the cheque amount, the power conferred on

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022 -:8:-

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the court below can only be taken as discretionary. According to him, the power being discretionary, the court below is bound to state the reasons while directing deposit of interim compensation. Moreover, it is submitted by the learned counsel that the direction to pay interim compensation under Section 143A N.I. Act can only be issued on an application filed by the complainant seeking for that. According to the learned counsel, in the case on hand, no such application was filed by the complainant but an oral submission alone was made. According to him, as per Section 143A the maximum amount to be paid as interim compensation is 20% of the amount covered by the cheque. Therefore, the court below shall exercise discretion while fixing the quantum ordered to be paid as interim compensation. According to him,the sum directed to be paid can be a sum equivalent to 20% or below that.

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According to the learned counsel, the impugned order is a cryptic one and it directs deposit of 20% of the cheque amount as interim compensation. The impugned order does not contain

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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-:9:-

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reasons for issuance of the direction. Accordingly the learned

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counsel canvassed for setting aside the impugned order.

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Section 143A N.I. Act is extracted hereunder :

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“ 143A. Power to direct interim compensation

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(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant—

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(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and

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(b) in any other case, upon framing of charge.

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(2) The interim compensation under sub-section (1) shall not exceed twenty

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per cent. of the amount of the cheque.

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(3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.

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(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973.

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(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973, shall be reduced by the amount paid or recovered as interim compensation under this section.”

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Section starts with a non-obstante clause. It provides that a court in seizin of a complaint filed to prosecute an offender under Section 138 N.I. Act may order the drawer of the cheque to pay interim compensation to the complainant in a summary trial or summons case, when he pleads not guilty to the accusations made in the complaint. Sub-section (2) provides that interim compensation under sub-Section (1) shall not exceed 20% of the amount covered by the cheque. Sub-section (3) provides that interim compensation shall be paid within 60 days from the date of the order or within such further period, not exceeding 30 days as directed by the court on sufficient cause being shown by the drawer of the cheque. Though the word ‘may’ is incorporated in the provision, when viewed in the backdrop of the objects and reasons of the Negotiable

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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-:11:-

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Instruments (Amendment) Act, 2018, the meaning ‘shall’ is required to be assigned to it. As per the provision, the court is empowered to direct payment of interim compensation in all prosecutions under Section 138 N.I. Act filed after the introduction of the provision.

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The Section does not contemplate filing of an application under the provision for getting interim compensation. It can be ordered either on application being filed by the complainant or suo motu by the court. It is provided under the provision that in a summary trial or a Summons Trial Case, the right time for invocation of the provision is after making a plea of not guilty to the accusations made in the complaint. A prosecution under Section 138 N.I. Act being a summons trial, a direction to pay interim compensation can be issued immediately when the accusations are read over to the accused and himself making a plea that he is not guilty of those.

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In the case on hand, the impugned orders directing to pay 20% of the amount covered by the cheques were passed by

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the court below, immediately after appearance of the accused

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022 -:12:-

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and making a plea that he is not guilty of the offence alleged against him. The direction of the court below was to deposit 20% of the amount covered by each of the cheques. Section 143A empowers a court of law to direct deposit of a sum to the maximum of 20% of the cheque amount as interim compensation.

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The third ground of argument was that the reasons for issuing direction to deposit 20% of the cheque amount, was not furnished by the court in the impugned orders. Section 143A does not say anything about recording of reasons while directing deposit of 20% or below 20% of cheque amount towards interim compensation.

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In view of the above discussion, this Court has no hesitation to hold that the challenge made against the impugned orders is untenable being devoid of merits. The impugned orders are legal, proper and correct and therefore interference is uncalled for.

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Crl.M.Cs fail for the reasons and are dismissed.

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Sd/MARY JOSEPH,

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Ttb

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022 -:13:-

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APPENDIX OF CRL.MC 5043/2022

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PETITIONERS’ ANNEXURES :

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Annexure1THE TRUE COPY OF THE COMPLAINT DATED
01.01.2022 IN CC NO. 226/2022 ON THE
FILES OF JUDICIAL FIRST CLASS MAGISTRATE
COURT, CHOTTANIKKARA
Annexure2THE CERTIFIED COPY OF THE PROCEEDINGS
DATED 17.05.2022 IN CC NO. 226/2022 ON
THE FILES OF JUDICIAL FIRST CLASS
MAGISTRATE COURT, CHOTTANIKKARA

¶107

Crl.M.C. Nos. 5043, 5045 & 5046 of 2022

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-:14:-

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APPENDIX OF CRL.MC 5045/2022

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PETITIONERS’ ANNEXURES :

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Annexure1THE TRUE COPY OF THE COMPLAINT DATED
01.01.2022 IN CC NO. 227/2022 ON THE
FILES OF JUDICIAL FIRST CLASS MAGISTRATE
COURT, CHOTTANIKKARA
Annexure2THE CERTIFIED COPY OF THE PROCEEDINGS
DATED 17.05.2022 IN CC NO. 227/2022 ON
THE FILES OF JUDICIAL FIRST CLASS
MAGISTRATE COURT, CHOTTANIKKARA

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Crl.M.C. Nos. 5043, 5045 & 5046 of 2022 -:15:-

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APPENDIX OF CRL.MC 5046/2022

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PETITIONERS’ ANNEXURES :

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Annexure1THE TRUE COPY OF THE COMPLAINT DATED
15.04.2021 IN CC NO. 898/2021 ON THE
FILES OF JUDICIAL FIRST CLASS MAGISTRATE
COURT, CHOTTANIKKARA
Annexure2THE CERTIFIED COPY OF THE PROCEEDINGS
DATED 17.05.2022 IN CC NO. 898/2021 ON
THE FILES OF JUDICIAL FIRST CLASS
MAGISTRATE COURT, CHOTTANIKKARA

Eurotech Polymers v. State of Kerala

Case brief

What is this about?

What did the court decide?

Eurotech Polymers v. State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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