NARAYANAN Vs. STATE OF KERALA

JUDGEMENT

(1.) Concurrent verdict of guilty rendered against the petitioner for the offence under Section 138 of the Negotiable Instruments Act, for short 'the N.I. Act is challenged in the revision. The learned Magistrate, after trial finding him guilty of the offence, convicted him thereunder, sentencing him to undergo simple imprisonment for a period of three months and to pay fine of Rs. 5,000/- with default term of simple imprisonment for one month more, In appeal, the Additional Sessions Judge, Palakkad confirmed the conviction and sentence without any modification, Propriety, legality and correctness of the conviction and sentence as aforesaid; is challenged by the accused in the revision.

(2.) The short facts necessaiy for disposal of the revision may be summed up thus: Towards purchasing of a motor vehicle from the complainant, the accused issued two cheques, one for Rs. 75,000/- and the other for Rs. 49,000/- and the cheque for Rs. 75,000/- on presentation was honoured and the other instrument for Rs. 49,000/- on presentation, was dishonoured for the reason "payment stopped by the drawer" was the case of the complainant. Statutory notice intimating the dishonour of the cheque and demanding the sum thereunder was responded with a reply raising false and untenable contentions. Complainant, therefore filed a complaint to prosecute the accused for the offence under Section 138 of the N.I. Act. The accused on appearance, pleaded not guilty when the particulars of the offence were made known, Complainant examined three witnesses including himself as PWs. 1 to 3 and got marked Exts.PI to PI2 to prove his case. The accused questioned under Section 313 of Cr.P.C, denied the prosecution case, contending that the cheque was issued only as a security for a sale transaction over immovable property, which was not completed and instruction was given to the bank to stop payment on the instrument. The accused also got examined one witness as DW1 to prove that the transaction relating to the cheque was different from that canvassed by the complainant, The learned Magistrate, after appreciating the materials produced, found the case of the complainant relating to the issue of Ext PI cheque as credible and trustworthy and that of the accused unworthy of any merit. On the materials produced the accused was found guilty and thereupon he was convicted and sentenced, which was confirmed without modification in appeal by the learned Additional Sessions Judge,

(3.) I heard the learned Counsel on both sides, The learned Counsel for the accused assailed the conviction and sentence raising a twofold challenge that the necessary ingredients to constitute an offence under Section 138 of the N.I. Act have not even been pleaded in the complaint nor established by the materials tendered in evidence, and that the dishonour of the cheque on the instruction of stop payment by the drawer to his banker at the time of presentation of the instrument when his account had sufficient funds to honour the instrument would not constitute the above offence. The learned Counsel, relying on a number of judicial pronouncements rendered by this Court as well as the apex court forcefully urged that this was not a case where the dishonour of the cheque was on account of insufficiency of funds or where the amount exceeded the arrangement, which according to the counsel, is necessary to prove an offence under Section 138 of the N.I. Act The learned Counsel relied on Bhageeratby v. Beena, 1992 2 KerLT 31. Sidharthan v. Praveena Chandran,1997 1 KerLT 6 (SC). Ashok v. Vasudevan Moosad, 1993 1 KerLT 671. Modi Cements Ltd. v. Kuchil Kumar Nandi, 1998 3 SCC 249. M.M.T.C. Ltd. and Anr. v. Medchl Chemicals and Pharma (P) Ltd., 2002 1 SCC 234 and Goa Plast (P) Ltd. v. Chico Ursula D souza,2004 SCC 235 to contend that the dishonour of a cheque for the reason of stop payment by the drawer, when his account had sufficient funds to honour the instrument, would not constitute an offence under Section 138 of the N.I. Act. Reliance was also placed by the counsel in George v. Muhammed, 1999 2 KerLT 401 and Chackochan T.K. v. P.P. Paul and Anr., 2008 4 KHC 922 to contend that essential ingredients constituting the offence should be pleaded and proved by the complainant that the stop payment order was given by the maker to circumvent the penal liability and to defeat the very purpose of the Section. Taking serious exceptions to the observations made by the learned Magistrate that the earlier decision of the apex court namely Sidharthan v. Praveena Chandran,1997 1 KerLT 6 (SC) has become irrelevant in the light of the later decision Modi Cements Ltd. v. Kuchil Kumar Nandi, 1998 3 SCC 249 (paragraph 8 of the judgment by the trial Magistrate) the learned Counsel contended that the apex court in the later decision referred to above, has not overruled the conclusion formed in the previous decision that a stop payment order issued by the maker and dishonour of the cheque pursuant thereto when sufficient funds are available in his account would not make out an offence under Section 138 of the N.I. Act. "Insufficiency of funds or exceeding arrangement" according to the counsel, is the crux of the offence under Section 138 of the N.I Act, and when that is not so, on the facts presented, no prosecution for such offence would lie leave alone conviction and sentence for such offence. The evidence of PW2, bank official and Ext.P10, extract of the account of the accused are relied by the counsel to contend that the accused had sufficient funds in his account when Ext.Pl cheque was presented for encashment. PW2 was treated as hostile by the complainant who summoned and examined him, it is submitted, is not sufficient to discard his evidence and as such, the portion of his evidence which is advantageous to a party can be taken advantage and the only safeguard thereto, according to the counsel, is that his evidence should be subjected to careful scrutiny by the court. The complainant having failed to establish that Ext PI cheque was dishonoured due to insufficiency of funds or exceeds the arrangement his case must fail and both the court below went wrong in convicting and sentencing the accused for the offence under Section 138 of the N.I. Act and it is liable to be reversed to advance the ends of justice, submits the counsel. On the other hand, the learned Counsel for the complainant submitted that there is no merit in the revision and the conviction and sentence imposed against the accused is fully supported by unimpeachable legal evidence. Inviting my attention to Modi Cements Ltd. v. Kuchil Kumar Nandi, 1998 3 SCC 249. the learned Counsel for the complainant contended that the burden is on the accused to establish that the stop payment instruction given to the banker leading to the dishonour of the cheque would not constitute an offence and, further, that he had sufficient funds in his account when the" cheque was presented. The accused has not let in any evidence in the case to discharge that burden, and further, Ext.PI0 certified extract of his account showing the interleniations made thereunder clearly demonstrate that the entries in his account had been manipulated to make out that he had funds to honour the cheque, but, actually, at, the time when the cheque was presented, it was dishonoured due to insufficiency of funds in his account. Both the courts below have concurrently found that the accused is guilty of the offence under Section 138 of the N.I. Act after minute and close scrutiny of the materials tendered, and there is no infirmity, factual or legal, to interfere with the concurrent findings of the inferior courts in exercise of the revisionai jurisdiction, submits the counsel urging for dismissal of the revision as devoid of any merit.