IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN FRIDAY, THE 22ND JULY 2011 / 31ST ASHADHA 1933 CRL.A.No. 1870 of 2004() ------------------------ CC.120/2001 of JUDL. MAGISTRATE OF FIRST CLASS COURT, ADIMALI .................... APPELLANT: APPELLANT ---------------- JOSEPH THOMAS, S/O.THOMAS, AGED 48, AREEPLACKAL VEEDU, PARATHODE KARA, KONNATHADY VILLAGE, UDUMBANCHOLA TALUK. BY ADV. SRI.A.RAJAGOPALAN RESPONDENTS: ---------------------- 1. K.N.JAYAN, KONNACKAL VEEDU,RAJAKKADU, RAJAKKADU VILLAGE. 2. STATE OF EKRALA, REP. BY PUBLIC PROSECUTOR. R2 BY PUBLIC PROSECUTOR SRI P.A. SALIM R1 BY ADV. M/S..G.HARIHARAN & SRI.PRAVEEN.H. THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARED ON ON 22/07/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V.K.MOHANAN, J. ------------------------------------------ Crl.A. No. 1870 of 2004 ---------------------------------------- Dated the 22nd day of July, 2011 JUDGMENT This appeal arises out of the judgment dated 27.4.2004 in C.C.No.120/2001 of the Judicial First Class Magistrate Court, Adimaly, which is a prosecution instituted for the offence under section 138 of the Negotiable Instruments Act, but the accused is acquitted under section 255(1) Cr.P.C. 2. The case of the appellant/complainant is that the accused issued a cheque drawn on Idukki District Co- operative Bank, Rajakkad branch on 10.1.2001 in discharge of a debt of Rs.80,000/- which due to the complainant and when the said cheque presented for encashment, the same was dishonoured on the ground of insufficiency of funds in the account maintained by the accused and thereafter though the appellant had caused to send a notice demanding the amount, the cheque amount was not paid in spite of the receipt of statutory notice and therefore, the accused has committed the offence punishable under section 138 of the N.I.Act. With the above allegation, the appellant herein CRA 1870/2004 2 preferred a complaint before the Judicial First Class Magistrate Court, Adimaly, whereupon cognizance was taken for the offence and instituted C.C.No.120/2001. During the trial, the complainant was examined as PW1 based upon the proof affidavit filed by him in lieu of chief examination. Besides the above, Exts.P1 to P8 documents were produced before the trial court. The defence taken by the accused is to the effect that in the year 1997, he had bus service and he had availed a loan of Rs.50,000/- from the complainant by entrusting four blank signed cheques along with 4 stamp papers affixed with a stamp and R.C.book of two vehicles. It is the further case of the accused that, thereafter he had paid the entire amount to the complainant through one Johny and Sulaiman, by giving them Rs.600/- daily as directed by the complainant. According to the accused, though he had paid back the entire amount, the complainant had not returned back the cheque though he had demanded for the same. Thus according to the accused, the present complaint is filed by misusing one of such cheque leaves. 3. Based upon the evidence and materials and on the CRA 1870/2004 3 rival pleadings, the trial court framed 5 points for its consideration, among which, the 4th point is, ''whether the accused failed to pay the amount after demand?” On conclusion of the trial, the learned Magistrate, though found all other points in favour of the complainant, the 4th point was found against him and in favour of the accused and accordingly held that, the complainant has not succeeded in proving the factum of failure on the part of the accused to pay back the cheque amount, and therefore Section 138 of the NI Act is not attracted. On the basis of such finding, the trial court further held that the accused is not guilty under section 138 and accordingly, he is acquitted under section 255(1) Cr.P.C. It is the above finding and order of acquittal of the learned Magistrate challenged in this appeal . 4. Heard the leaned counsel for the appellant and perused the judgment of the trial court. Having regard to the facts and circumstances involved in the case, and in the light of the contentions raised by the counsel for the appellant, and the counsel for the respondent, the question to be considered is whether the finding of the trial court that the CRA 1870/2004 4 complainant has failed to establish a case under section 138 of the NI Act is correct and whether the acquittal recorded by the trial court requires any interference, in this appeal. Going by the judgment of the trial court, it can be seen that, under point No.1, the trial court has specifically found that Ext.P1 cheque was issued by the accused in discharge of a legally enforceable debt. Under point No.2, it is the finding of the trial court that, Ext.P1 cheque was dishonoured due to insufficiency of fund in the account maintained by the accused and under point No.3 the trial court has also found that, on receiving the dishonoured cheque, the complainant had caused to sent lawyer notice to the accused demanding the payment of the cheque amount and the said notice is marked as Ext.P4. Exts.P5 and P6 would further show that the accused has received the same. As per the evidence on record, the trial court has categorically found that the complainant has received information regarding the dishonour of the Ext.P1 cheque on 6.2.2001 and he sent Ext.P4 notice on 7.2.2001. Thus according to the learned Magistrate, the complainant had sent demand CRA 1870/2004 5 notice in writing as contemplated under Section 138(b) of the N.I.Act. 5. On an elaborate discussion and after considering the evidence and materials on record, the trial court had found that the accused though proved that Ext.P1 cheque was issued in discharge of a legally enforceable debt and the said cheque was dishonoured due to insufficiency of funds in the account of the accused and statutory notice was issued in terms of the proviso , the complainant has miserably failed to plea and prove that in spite of the notice and receipt of the same, the accused failed to repay the amount. 6. On a reading of Section 138 of the NI Act, it is crystal clear that, besides the etabalishment and proof of facts to constitute the essential ingredients that contained in the main part of Section 138, the complainant has also to satisfy the requirements provided in the provisos (a), (b) and ( c). As far as the present case is concerned, it is the 3rd proviso to Section 138 is relevant, which reads as : “(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 CRA 1870/2004 6 course of the cheque, within fifteen days of the receipt of the said notice”. (emphasis supplied). As per the third proviso, it is mandatory on the part of the payee or the holder in due course of the cheque to establish that the amount was not paid, in spite of the demand as required under the proviso (b). So the proviso ( c) is a corollary to proviso (b) and unless and until both the requirements are satisfied, it cannot be said that the complainant has succeeded or the payee or the holder in due course of the cheque as the case may be succeeded in establishing the offence under Section 138 of the Act. In the present case, as found by the learned Magistrate, neither in the complaint, nor in the proof affidavit, there is any claim that the accused had failed to pay the cheque amount after the receipt of the statutory notice. In order to attract the offence under section 138, besides the establishment of the execution and issuance of the cheque, and passing of consideration, it is inevitable and it is the unshifted burden of the complainant to plea and prove that the drawer of the cheque- the accused - has not paid the amount in spite of CRA 1870/2004 7 the receipt of statutory notice which issued in terms of proviso (b) to Section 138 of the NI Act. Thus, unless the above essential requirement in terms of the third proviso to section 138 of the Negotiable Instruments Act is established, the complainant is not entitled to get the presumption as contemplated under section 139 of the N.I Act. In the present case, to satisfy the above requirement, it is absolutely necessary, especially, in the light of the particular contention and defence taken by the accused. According to him, he had discharged the entire liability which arose out of the amount borrowed from the complainant. If that be so, the failure on the part of the complainant in pleading and proving the facts in terms of proviso (c ) to Section 138 of the NI Act is fatal to the complainant in a prosecution for the offence under section 138 of the NI Act. In the present case, as pointed out earlier, the complainant has miserably failed to satisfy the requirement in terms of proviso ( c) to Section 138 of the NI Act, based upon which the trial court acquitted the accused under section 255(1) of Cr.P.C and the said findings, according to me, is not liable to be disturbed and CRA 1870/2004 8 interfered with. In the light of the facts and circumstances and the foregone discussions, I am of the view that there is no merit in this Crl.appeal and accordingly the same is dismissed. V.K.MOHANAN, JUDGE kvm/-