Allowed

A.v.John v. George Joseph

Kerala HC20 May 2024CRL.A/1759/2007

Case brief

AI extract

What is this about?

Complainant's appeal against acquittal in a Section 138 NI Act case. The court held the dishonour memo sufficient evidence and that limitation for notice runs from receipt of bank information, not dishonour; a demand for interest does not invalidate the notice. Acquittal set aside, accused convicted and compensation awarded.

What the court decided

AI extract

A.v.John Vs George Joseph — Cheque Dishonour | Kerala HC (2024)

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Crl. Appeal No. 1759/2007

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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 JOHNSON JOHN

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MONDAY, THE 20^TH DAY OF MAY 2024 / 30TH VAISAKHA, 1946

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CRL.A NO. 1759 OF 2007

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JUDGMENT DATED 15.09.2000 IN CC NO.457 OF 1996 OF JUDICIAL MAGISTRATE OF FIRST CLASS ,MATTANNUR

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APPELLANT/COMPLAINANT:

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A.V.JOHN, S/O. VARGHESE, C/O. ALPHONSA PRINTERS, IRITTY. BY ADV SRI.GRASHIOUS KURIAKOSE

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SRI. PRANOY K. KOTTARAM

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SRI. ATHUL BABU

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RESPONDENT/ACCUSED:

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GEORGE JOSEPH, S/O. GEORGE, MADATHIL HOUSE, PAYAMMUKKU, KEEZHUR, P.O. IRITTY.

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SMT. SHOBA P

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THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 12.04.2024, THE COURT ON 20.05.2024 DELIVERED THE FOLLOWING:

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Crl. Appeal No. 1759/2007

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JOHNSON JOHN, J.

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--------------------------------------------------------Crl. Appeal No. 1759 of 2007 -------------------------------------------------------Dated this the 20^th day of May, 2024.

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JUDGMENT

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This appeal is filed against the judgment dated 15.09.2000 in C.C. No. 457 of 1996 of the Judicial First Class Magistrate, Mattannur, whereby the accused was found not guilty of the offence punishable under Section 138 of the Negotiable Instruments Act (‘NI Act’ for short) and acquitted under Section 255(1) Cr.P.C.

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The appellant is the complainant and the complaint was filed on the allegation that the accused availed a loan of Rs.35000/- from the complainant and in discharge of the said debt, he issued a cheque dated 20.05.1996 for a sum of Rs.35000/- and subsequently, when the complainant presented the cheque for collection, the same was dishonoured due to insufficiency of funds in the account of the accused and in spite of issuance of statutory notice, the accused failed to pay the cheque amount.

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In the trial court, the complainant was examined as PW1 and Exhibits P1 to P5 were marked and no evidence adduced from the side of the accused. After considering the evidence on record and hearing both sides, the trial court found that the complainant has not produced the ledger extract of the account to prove the exact date of presentation of

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the cheque and its dishonour and therefore, it is not possible to arrive at a conclusion that statutory notice was issued in time and that the complainant has not succeeded in proving the offence under Section 138 of the NI Act against the accused and accordingly, the accused was acquitted under Section 255(1) of Cr. P. C.

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Heard Sri. Pranoy K. Kottaram, the learned counsel for the àppellant, and Smt. Shoba P., the learned counsel for the respondent.

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The learned counsel for the appellant argued that Exhibit P1 cheque is dated 20.05.1996 and Exhibit P2, cheque dishonour memo, is dated 21.05.1996 and therefore, the trial court ought to have found that the cheque was presented within the validity period. It is also pointed out that Exhibit P3, copy of the statutory notice dated 01.06.1996 and Exhibit P4, postal receipt, and Exhibit P5, postal acknowledgment card, would clearly show that the legal notice was issued within the statutory period and therefore, the impugned judgment of the trial court is liable to be set aside.

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The learned counsel for the first respondent argued that the complainant ought to have summoned the ledger extract of the account to prove the exact date of the dishonour of the cheque and further the demand in Exhibit P3 statutory notice is vague, in as much as the complainant has also claimed interest for the cheque amount and

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therefore, in the absence of satisfactory evidence regarding issuance of statutory notice within the period of limitation, this appeal is devoid of merit and is liable to be dismissed.

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A perusal of Exhibit P1 cheque shows that the same is dated 20.05.1996 and the specific case of the complainant is that when he presented the cheque for collection, the same was dishonoured due to insufficiency of funds in the account of the accused, as is evident from Exhibit P2 memo dated 21.05.1996. In Exhibit P2 memo, the reason for dishonour of the cheque is shown as ‘funds insufficient’

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The learned counsel for the appellant invited my attention to Section 146 of the NI Act to point out that Exhibit P2 dishonour memo can be accepted as sufficient proof for the dishnounor of the cheque for the reason stated in the said memo and in this connection, the learned counsel for the appellant also cited the decisions of this Court in Manoharan v. Selvini Shabu [2006 (2) KLD 44] and P Soman v. Thomas Paul (2000 (2) KLJ 415] in support of the contention that under Section 146 of the NI Act, the dishonour memo is sufficient evidence, unless and until the same has been disproved. Therefore, I find that the finding of the trial court that the complainant ought to have summoned the ledger extract of the account to prove the exact date of

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Crl. Appeal No. 1759/2007

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dishonour of the cheque and date of presentation of the cheque cannot be accepted.

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It is also pertinent to note that the period of commencement of limitation for the purpose of issuance of statutory notice under Section 138(b) of the NI Act is from the date of receipt of information by the payee or the holder in due course of the cheque as the case may be, regarding the return of the cheque as unpaid from the Bank and not from the date of dishnour of the cheque. Section 138 of the NI Act reads thus:

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“138. Dishonour of cheque for insufficiency, etc., of funds in the account.—Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless—

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(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

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(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

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(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

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Explanation.—For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.”

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It is clear from the above statutory provision that the period for issuance of statutory notice is from the date of receipt of information from the Bank regarding the return of the cheque as unpaid and not from the exact date of dishonour of the cheque and therefore, the finding of the trial court in this regard is not legally sustainable. The learned counsel for the first respondent also raised a contention that in Exhibit P3 notice, the complainant has demanded interest for the cheque

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amount and therefore, notice is vague. But, I find that the complainant has specifically stated the cheque amount in Exhibit P3 notice and only because the complainant has also mentioned about his legal right for interest in the notice, it cannot be held that the notice is invalid. In Suman Sethi v. Ajay K. Churiwal and another (2000 (1) KLT 701), the Honourable Supreme Court held thus:

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“It is well settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the “said amount” ie., cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to “said amount” there is also a claim by way of interest, cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving up break up of the claim the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, notice might well fail to meet the legal requirement and may be regarded as bad.”

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As noticed earlier, the complainant has specifically mentioned the cheque amount in Exhibit P3 notice and only because he also mentioned about his right for legal interest, it cannot be held that the notice is invalid, as the said additional claim for legal interest is severable from the demand for the cheque amount. In the above circumstances, I find that the finding of the trial court is liable to be set aside

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In the result, the appeal is allowed, the impugned judgment is set aside and the accused is convicted under Section 138 of the NI Act and sentenced to undergo imprisonment till the rising of the court and to pay a compensation of Rs.70,000/- (Rupees Seventy Thousand only) to

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the complainant under Section 357(3) Cr.P.C with the default clause that he shall undergo simple imprisonment for a period of four months. The accused is granted 3 months’ time from today onwards to pay the amount of compensation. He shall appear before the trial court on 21.08.2024 to receive the sentence.

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sd/- JOHNSON JOHN,

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JUDGE.

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A.v.John v. George Joseph

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A.v.John v. George Joseph

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