E S I CORPORATION Vs. JOSEPH

JUDGEMENT

(1.) Employees State Insurance (E.S.I.) Corporation is the appellant. First respondent issued a cheque to the E.S.I. Corporation for an amount of Rs. 21,120/- stated to be towards the contribution due as demanded in Ext. P3 series recovery notices. It was presented to the bank on 19.6.1995. The cheque was bounced. Statutory notice was issued. It did not result in payment of the money. So prosecution was initiated alleging offence punishable under S.138 of the Negotiable Instruments Act against the 1st respondent. The main contention of the first respondent was that he had already objected to the recovery by filing I.C.88/95 in E.I. Court on 20.6.1995. The E.I. Court passed a conditional order of stay against recovery directing him to remit Rs.5,000/- towards the amount demanded. He paid the said amount. Therefore, there was no cause of action to initiate the prosecution based on bouncing of Ext. P2 cheque. Appreciating this contention, the Court below acquitted the first respondent. Therefore this appeal.

(2.) It is contended by the appellant that the E.I. Court passed the stay order only on 20.6.1995. The cheque had already been presented on 19.6.1995. The cheque has been issued by the first respondent persuant to the recovery notice in Ext. P3 series. Therefore, an offence is made out on 19.6.1995. When as on the said date, as is revealed by Ext. P11 extract of the account of the first respondent, no sufficient fund was available in his credit. Therefore the trial Magistrate went wrong in acquitting the respondent.

(3.) In terms of S.142 of the Negotiable Instruments Act, the Court can take cognizance of any offence punishable under S.138 of the Negotiable Instruments Act, when a complaint is made within one month of the date on which the cause of action arises. Admittedly in this case the cheque was presented only on 19.6.1995. Necessarily a notice can be issued after 19.6.1995, after knowing about bouncing. The E.I. Court passed a stay order on 20.6.1995. From 20.6.1995, the next day of the presentation of the cheque, the accused did not have the liability to pay the amount of cheque being the contribution demanded in Ext. P3 series of recovery notices which had been impugned in I.C.88/95 filed on 20.6.1995. Thus as on the date of bouncing, as on the date of issuance of notice and as on the date of expiry of 15 days from the date of receipt of such notice, the accused was not liable to pay any amount to the complainant based on Ext. P2 cheque. Therefore, he cannot be said to be guilty of the offence punishable under S.138 of the Negotiable Instruments Act. Necessarily, acquittal is perfectly justified.