Allowed

Charlie Kolothe v. Sudheer Khan

Kerala HC5 Dec 2023Crl.Rev.Pet/940/2006

Case brief

AI extract

What is this about?

In this criminal revision, the High Court of Kerala set aside the conviction under Section 138 of the Negotiable Instruments Act. The court held the prosecution failed to prove any debt existed between the parties and the statutory notice was sent beyond the fifteen-day limit applicable then, vitiating the offence.

What did the court decide?

Revision petition allowed; Appellant acquitted; Impugned judgments of conviction and sentence set aside; Bail bond cancelled and liberty granted.

Charlie Kolothe Vs Sudheer Khan — Cheque Dishonour | Kerala HC (2023)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MRS. JUSTICE SOPHY THOMAS

¶4

TUESDAY, THE 5TH DAY OF DECEMBER 2023 / 14TH AGRAHAYANA, 1945

¶5

CRL.REV.PET NO. 940 OF 2006

¶6

AGAINST THE JUDGMENT DATED 12.12.2005 IN CRA 461/2002 OF I ADDITIONAL SESSIONS

¶7

JUDGE, THIRUVANANTHAPURAM AND THE JUDGMENT DATED 25.11.2002 IN CC 66/2000 OF

¶8

JUDICIAL MAGISTRATE OF FIRST CLASS -II,NEDUMANGAD

¶9

REVISION PETITIONER/APPELLANT/ACCUSED:

¶10

CHARLIE KOLOTHE, S/O CHERIYAN,

¶11

THE PRESIDENT OF CHENNAPETTA SERVICE CO-OPERATIVE, BANK, KOLOTHE
HOUSE, ANAKULAM, CHENNA PETTAH, VILLAGE, KOLLAM DISTRICT.
BY ADVS.
SASTHAMANGALAM S. AJITHKUMAR
DEEPTHY.S.NATH
PRABHU VIJAYAKUMAR
SREEJITH S. NAIR(K/002228/2019)

¶12

RESPONDENTS/RESPONDENTS/COMPLAINANT & STATE:

¶13

1SUDHEER KHAN

¶14

VETTAKKARIKKATHIL VEEDU, THANNIMMOODU,, NEDUMANGAD VILLAGE & TALUK.

¶15

2STATE OF KERALA REPRESENTED BY PUBLIC
PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.

¶16

OTHER PRESENT:

¶17

SHRI RENJIT GEORGE-SR.P.P.

¶18

THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON
05.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶19

Crl.R.P. No. 940 of 2006

¶20

..2..

¶21

SOPHY THOMAS, J.

¶22

=====================

¶23

Crl. Revision Petition No. 940 of 2006

¶24

========================

¶25

O R D E R

¶26

Dated this the 05^th day of December, 2023

¶27

This revision is at the instance of the accused in

¶28

C.C.No.66 of 2000 on the file of Judicial First Class Magistrate's Court-II, Nedumangad, assailing the judgment in Crl.Appeal No.461 of 2002 on the file of Additional Sessions Judge-I, Thiruvananthapuram, which upheld his conviction under Section 138 of the Negotiable Instruments Act (hereinafter referred as ‘the NI Act’), though the sentence was modified and reduced to certain extent.

¶29

C.C. No. 66 of 2000 was based on a complaint filed by the 1^st respondent/complainant herein, against the revision petitioner, alleging an offence punishable under Section 138 of the NI Act.

¶30

Crl.R.P. No. 940 of 2006

¶31

..3..

¶32

The case of the 1^st respondent/complainant was that, the revision petitioner borrowed an amount Rs.65,110/- from him on 01.08.1999, and towards discharge of that debt, he issued Ext.P1 cheque dated 08.08.1999 drawn on Channapettah Service Cooperative Bank Limited. When that cheque was presented for collection, it was returned dishonoured stating the reason, ‘funds insufficient’. He sent statutory notice to the revision petitioner on 03.09.1999. Though it was accepted by the revision petitioner and a reply was sent on 24.09.1999, the amount was not returned, and hence, the complaint.

¶33

Learned Magistrate took cognizance of the offence under

¶34

Section 138 of the NI Act, and summons was issued against the revision petitioner.

¶35

On appearance, particulars of offence was read over and explained, to which, the revision petitioner pleaded not guilty and claimed to be tried. Thereupon, PWs 1 and 2 were examined and

¶36

Crl.R.P. No. 940 of 2006

¶37

..4..

¶38

Exts.P1 to P8 were marked from the side of the

¶39

1^st respondent/complainant to prove his case.

¶40

On closure of complainant’s evidence, the revision petitioner was questioned under Section 313 of Cr.P.C., and he denied all the incriminating circumstances brought on record. DWs 1 to 3 were examined and Exts. D1 and D2 were marked from defence side.

¶41

On an anxious consideration of the rival contentions and on analysing the facts and evidence, the trial court found the revision petitioner guilty under Section 138 of the NI Act, and he was convicted and sentenced to undergo simple imprisonment for a period of three months and compensation of Rs.65,110/- to the complainant under Section 357(3) of the Cr.P.C., with a default sentence of simple imprisonment for a further period of three months.

¶42

Aggrieved by the conviction and sentence, the revision

¶43

..5..

¶44

Crl.R.P. No. 940 of 2006

¶45

petitioner preferred Crl.Appeal No. 461 of 2002. The appellate court, on re-appreciation of the facts and evidence, found that there was no reason to interfere with the conviction under Section 138 of the NI Act, and so it was confirmed. But the substantive sentence was modified and reduced to imprisonment till rising of court, without interfering with the compensation part and its default sentence. Impugning the judgment of the appellate court, the revision petitioner has preferred this revision.

¶46

Now this Court is called upon to verify the legality, propriety and correctness of the impugned judgment.

¶47

Though service is complete on the 1^st

¶48

respondent/complainant, he opted to remain absent, and none appeared for him.

¶49

Heard learned counsel for the revision petitioner and learned Public Prosecutor.

¶50

The revision petitioner would contend that, there was no

¶51

Crl.R.P. No. 940 of 2006

¶52

..6..

¶53

transaction at all, between himself and the 1^st respondent/complainant. According to him, the 1^st

¶54

respondent/complainant is a total stranger to him, and he neither borrowed any amount from him, nor issued any cheque in his favour. PW1, the 1^st respondent/complainant had admitted before the trial court that, he was residing at a distance of about 50 kms from the house of the revision petitioner. In Ext.P6 reply notice itself, the revision petitioner had stated that, Ext.P1 cheque bearing No. 04874 was issued by him to one Mr. Jojen Mathew as a security cheque, for the business transactions between them. Sri.Jojen Mathew was examined by the revision petitioner as DW2. He admitted before court that, he had business transaction with the revision petitioner, and he had received a lank cheque from him, as a security for Rs.35,000/- which he owed towards him, and Ext.P1 is that cheque. DW2 was having business transactions with Hindustan medicals, and for Rs.7,500/-, which

¶55

Crl.R.P. No. 940 of 2006

¶56

..7..

¶57

wa due from him, he handed over Ext.P1 cheque to that institution. He entrusted that cheque with one Mr. Anilsha, who was the owner of Hindustan medicals. Sri.Anilsha is no more. DW1, Sri.Hari Kumar who was a staff in Hindustan Medicals admitted before court that, the 1^st respondent/complainant is familiar to him, as he was also a staff working along with him in Hindustan medicals.

¶58

The case of the revision petitioner is that, the cheque, which was given as security by him to DW2, was subsequently given as security by DW2, to the owner of Hindustan medicals, Sri.Anilsha, and since he is no more, the

¶59

1^st respondent/complainant, who is an employee of Sri.Anilsha, filled up that cheque in his name, and presented it before bank. There was no business transaction or loan transaction between the revision petitioner and the 1^st respondent/complainant, and Ext.P1 cheque was never issued by him towards discharge of any

¶60

Crl.R.P. No. 940 of 2006

¶61

..8..

¶62

debt due to the 1^st respondent/complainant.

¶63

Section 138 of the NI Act stipulates that, the cheque should have been issued towards payment of any amount of money towards discharge of any legally enforceable debt. The evidence in this case will not show any transaction between the revision petitioner and the 1^st respondent/complainant. Though Ext.P1 cheque was drawn from the bank account of the revision petitioner at Chennapettah service Co-operative Bank, there is nothing to show that the said cheque was issued by the revision petitioner towards discharge of any legally enforceable debt, due to the 1^st respondent/complainant. So, the 1^st respondent/complainant failed to establish the essential ingredient of an offence punishable under Section 138 of the NI Act. The testimony of DWs 1 to 3 were sufficient to show that the transaction was between the revision petitioner and DW2, and the cheque was also issued by the revision petitioner to DW2

¶64

Crl.R.P. No. 940 of 2006

¶65

..9..

¶66

as a security, for the amount due from him. That cheque was

¶67

never indorsed by DW2 in favour of the 1^st respondent/complainant enabling him to present it before the bank, for collecting the amount. Moreover, the case of the revision petitioner is that, Ext.P1 cheque was given as a blank one without filling it. DW2 also supported that fact. So, in all probability, the cheque entrusted by the revision petitioner with DW2 as a security, was misused by the 1^st respondent/complainant as an employee of Hindustan Medicals, as that cheque was given by DW2 to Mr.Anilsha, the owner of Hindustan medicals, who later passed away.

¶68

Another point canvassed by learned counsel for the revision petitioner is that, the statutory notice as envisaged under Section 138(b) of the NI Act was not sent within time and so, an offence under Section 138 of the NI Act will not be attracted. Ext.P1 cheque was dishonoured on 13.08.1999 as seen from

¶69

..10..

¶70

Crl.R.P. No. 940 of 2006

¶71

Ext.P2 dishonour memo issued from Chennapettah Service Co-operative Bank. Ext.P3 memo shows that the dishonoured cheque along with Ext.P2 memo was returned to the 1^st respondent/complainant on 18.08.1999. As per Section 138(b) of the NI Act, as it stood prior to its amendment on 06.02.2003, the payee or the holder in due course of the cheque shall demand payment of the cheque amount, by giving a notice in writing to the drawer of the cheque, within fifteen days of receipt of information by him, from the bank regarding the return of the cheque as unpaid. Ext.P3 memo shows that, the cheque was returned unpaid from the bank of the 1^st respondent/complainant on 18.08.1999. So, within fifteen days, the notice ought to have been sent by the 1^st respondent/complainant. But, Ext.P5 notice though it is dated 03.09.1999, Ext.P4 postal receipt shows that, it was sent only on 06.09.1999, which is beyond the period of fifteen days from 18.08.1999. So, the notice as envisaged under

¶72

Crl.R.P. No. 940 of 2006

¶73

..11..

¶74

Section 138(b) of the NI Act was not sent within the statutory period, and so an offence under Section 138(b) of the NI Act, will not be complete.

¶75

Learned counsel for the revision petitioner placed reliance on a decision of the Karnataka High Court Dr.Geetha v. Vasanthi S. Shetty reported in 2010 Crl.L.J 2698 to say that issuance of notice under Section 138 (b) of the NI Act is a mandatory one, and not a mere formality. In Paragraph 13 of that judgment we reads as follows.

¶76

“13. As per Section 142 of the Act, the Court can take cognizance of the offence under Section 138 of the Act only on a complaint in writing made by the drawer or the holder in due course of the cheque, as the case may be and such a complaint should have been made within one month of the date on which the cause of action arose under Clauses (c) of proviso to Section 138 of the Act. Thus, from a reading of Sections 138 and 142 of the Act, it is clear that to constitute offence under Section 138 of the Act, several acts should be done by the drawee of the cheque and it is only when the drawer of the cheque fails to make payment within 15 days from the date of

¶77

..12..

¶78

Crl.R.P. No. 940 of 2006

¶79

the receipt of the notice, the offence is complete. The offence though commences on dishonour of the cheque, becomes complete only upon the failure on the part of the drawer of the cheque to pay the amount covered under the cheque within 15 days from the date of the receipt of the notice. Therefore issuance of notice as required under Clause (b) of proviso to Section 138 of the Act is a mandatory one and not a mere formality as sought to be contended by the learned counsel for the appellant. The object behind issuance of notice under Clause (b) proviso to Section 138 is to give intimation to the drawer of the cheque about dishonouring of cheque and to give him an opportunity to pay the money covered under the cheque and thereby to avoid the criminal prosecution being launched against him. Therefore, issuance of notice as required by Clause (b) is mandatory.”

¶80

It is true that, as per the amendment Act, 2002, which came into effect from 06.02.2003, the period of fifteen days under Section 138(b) of the NI Act was substituted with thirty days. But, that amendment cannot have any retrospective effect.

¶81

The transaction, in the case on hand is in the year 1999 and so, the period applicable for sending the notice, from the date of information of dishonour of the cheque, was only fifteen days.

¶82

Crl.R.P. No. 940 of 2006

¶83

..13..

¶84

Here, the 1^st respondent/complainant had stated that the dishonoured cheque was returned to him on 23.08.1999. But, Ext.P3 memo clearly shows that he received the dishonoured cheque along with Ext.P2 memo, on 18.08.1999. In the notice, the date mentioned was on 03.09.1999. But Ext.P4 postal receipt shows that, the notice was sent only on 06.09.1999. So, it was sent beyond the period of fifteen days, and it is in clear violation of the statutory mandate under Section 138(b) of the NI Act as it stood prior to its amendment. So also the prosecution under Section 138 of the NI Act stands vitiated.

¶85

Adverting to the facts and circumstances, as detailed above, it has to be held that, the 1^st respondent/complainant failed to prove that Ext.P1 cheque was issued towards discharge of any legally enforceable debt due to him from the revision petitioner. Moreover, there is violation of Section 138(b) of the NI Act, as notice was not sent, within the statutory period. The conviction

¶86

Crl.R.P. No. 940 of 2006

¶87

..14..

¶88

and sentence of the revision petitioner by the trial court as well as

¶89

the appellate court, without taking into account these material aspects, are liable to be set aside.

¶90

In the result, the impugned judgments of conviction and sentence are hereby set aside and the revision petitioner is found not guilty of the offence punishable under Section 138 of the NI Act and he is acquitted thereunder. His bail bond is cancelled and he is set at liberty, forthwith.

¶91

The revision petition accordingly stands allowed.

Sd/-

SOPHY THOMAS

JUDGE

RMV