PALLIKUTTI Vs. SHANTHI TRADERS

JUDGEMENT

(1.) Heard the learned counsel for the petitioner and the learned counsel for the respondent.

(2.) The petitioner was the accused before the Trial Court, whereby an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'NI Act' for brevity), was alleged. It is not in dispute that the petitioner and the respondent had business transactions, whereby the respondent complainant had sold cement to the petitioner on credit, over a period of time. It was alleged by the complainant that in respect of one such credit transaction, the petitioner had paid a sum of Rs.1,58,148/- under a cheque dated 5.11.2004 and when the same was presented to his Banker, it was returned with an endorsement that the funds were insufficient and after issuing a statutory notice, proceedings have been initiated. The present petitioner contested the said proceedings and the courts below having negated the defence and the Trial Court had imposed the punishment of sentencing the petitioner to pay a fine of Rs.1,80,000/- and in default to pay the fine, the accused was to undergo simple imprisonment for six months and further, that the entire fine amount on recovery, was to be paid as compensation to the complainant. The Appellate Court in turn had affirmed the judgment of the Trial Court. It is that which is under challenge in the present petition.

(3.) The learned counsel for the petitioner would raise several contentions. Primarily, he would contend that there was no legal liability outstanding and that though there were transactions between the petitioner and the respondent, such transactions having been completed in the year 2003, there was no further transaction whereby it could be claimed that the cheque in question had been issued in consideration of payment of any such transactions. Though the petitioner had admitted the cheque which was issued on his account and had also admitted the signature appearing on the said cheque, it was denied that the same was issued voluntarily by the petitioner in due repayment of any price payable against goods supplied. On the other hand, it was contended that in view of the earlier transactions and to secure due payment of monies on credit basis, the cheque had been issued as security and it was that cheque which had been retained by the complainant that was sought to be misused. The petitioner had vehemently denied that he had entered the particulars in the cheque and that it was a mischievous act on the part of the complainant in having tampered with the document and having filled up the details by himself. It was further contended that in terms of Section 20 of the NI Act, that any stamped instrument issued in blank, would authorise the holder thereof to indicate the amounts to be covered under the said instrument and since the cheque in question is not a stamped instrument, though no doubt a negotiable instrument, the claim that it was issued in blank and that it could be filled up by the respondent, is not permissible unless he was duly authorised by the petitioner to do so. At no point of time, the petitioner had authorised the respondent to fill up the particulars at his whim and fancy and therefore, would not be binding on the petitioner and it was sought to be canvassed that there was no legal liability. The learned counsel would also contend that insofar as Section 138 of the NI Act is concerned, even if it could be held that the petitioner was liable, the court could not have imposed a default clause, whereby if the petitioner should default in payment of the fine amount that is imposed, the petitioner shall undergo imprisonment. Such a power is not available to the court under Section 138 of the NI Act, and in this regard, would place reliance on a judgment of a Supreme Court in the case of Babasaheb Murlidhar vs. State of Maharashtra, 2006 3 SCC(Cri) 544).