IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS TUESDAY, THE 14TH DECEMBER 2010 / 23RD AGRAHAYANA 1932 CRL.A.No. 1026 of 2004() ------------------------ AGAINST THE JUDGEMENT/ORDER IN CRLP.350/2004 Dated 22/06/2004 STC.3900/2003 of JUDL. MAGISTRATE OF FIRST CLASS COURT, THALASSERY .................... APPELLANT(S): COMPLAINANT: -------------------------- O.P. SADHASIVAN, S/O. PARAMESWARAN, AGED 48 YEARS, BEAUTICIAN, CITY FACE BEAUTY PARLOUR, T.C. ROAD, P.O. CHIRAKKARA, THALASSERY-4, KANNUR DISTRICT. BY ADV. SRI.R.SURENDRAN RESPONDENT(S): ACCUSED & STATE: ------------------------------- 1. P.V. SUBRAMANIAN, S/O. P.V. ANDY, AGED 46 YEARS, BUSINESSMAN, PARTNER M/S. KERALA FOUNDRY, T.C.ROAD, P.O. CHIRAKKARA, THALASSERY-4, KANNUR DISTRICT. 2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. ADV. SRI.E.V.NAYANAR FOR R1 R2 BY PUBLIC PROSECUTOR SMT. M.K. PUSHPALATHA THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 10/12/2010, THE COURT ON 14/12/2010 DELIVERED THE FOLLOWING: M.L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - - - - - Crl.A. No. 1026 of 2004 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 14th day of December, 2010 JUDGMENT This appeal is filed by the complainant in S.T.C. No. 3900 of 2003 on the file of the Judicial First Class Magistrate, Thalasserry. The first respondent herein was the accused in that case, which was filed by the complainant alleging commission of the offence under Section 138 of the N.I. Act. 2. The case of the complainant is that the accused had borrowed an amount of Rs.60,000/- and in discharge of the same the accused issued a cheque dt.24.3.2003 drawn on the Thalsserry Co-operative Bank Ltd., Chirakkara branch in favour of the complainant. When the cheque was presented for collection in the State Bank of India, Thalasserry brach, it was dishonoured due to insufficiency of funds in the account of the accused. On 29.3.2003 the dishonour was intimated by the Crl.A. No. 1026 of 2004 2 bank. The complainant sent a lawyer notice on 8.4.2003 to the accused intimating the dishonour and demanding the amount under the cheque. Inspite of receipt of the notice, the first respondent did not pay the amount due to the appellant. The accused sent a reply disputing the amount borrowed and also raising a plea of discharge. 3. In the Magistrate Court, on the side of the complainant, PW1 was examined and Exts.P1 to P4 were marked. On the defence side, Ext.D1 was marked. The learned Magistrate, on considering the evidence, found that as the cheque was drawn on the account of the firm, other partners are necessary parties to the complaint and the complaint is bad for non-joinder of necessary parties and the accused was acquitted under Section 255(1) Cr.P.C. Against that judgment the complainant filed this appeal. 4. Heard learned counsel for the appellant and the learned counsel for the first respondent. 5. The learned counsel for the appellant submitted that the partners, who are responsible to the firm for the conduct of the Crl.A. No. 1026 of 2004 3 business of the firm, as well as the firm are to be deemed guilty in the event of dishonour of a cheque issued on behalf of the firm in view of Section 141 of the N.I. Act and that it is not obligatory to the complainant to array all the partners and the firm as the accused. The learned counsel for the appellant submitted that since the complainant has proved all the ingredients of the offence under Section 138 of the N.I. Act and the court below ought to have convicted the accused under Section 138 of the Act and imposed suitable sentence. The learned counsel for the first respondent supported the judgment of the court below. 6. When the accused was questioned under Section 313 Cr.P.C. he stated that he is a Partner of Thalasserry Kerala Hotel and that there are three partners in that firm. He borrowed Rs.20,000/- from one Vijayan for the partnership and gave back Rs.25,000/- and that no amount is due from the accused. 7. The complainant was examined as PW1. He deposed that on 4.1.2003 the accused borrowed Rs.60,000/- from him and issued Crl.A. No. 1026 of 2004 4 Ext.P1 cheque for that amount on 24.3.2003. When that cheque was presented for encashment, it was dishonoured due to insufficiency of funds in the account of the accused. PW1 sent a lawyer notice to the accused, which was accepted by the accused. But he did not pay any amount. Ext.P2 is the dishonour memo. Ext.P3 is the copy of the lawyer notice and Ext.P4 is the postal acknowledgment. Ext.D1 is the copy of the reply notice. In cross examination, PW1 deposed that the accused borrowed the amount for his personal purpose and that Ext.P1 belongs to the firm, in which the accused is a partner. 8. The learned counsel for the appellant produced the full text of the judgment reported in Bindu David v. Malanadu Development Society (2003 (1) KLT SN page 15). In that case it was held that under Section 141 of the N.I. Act, the partners, who are responsible to the firm for the conduct of the business of the firm as well as the firm are to be deemed guilty in the event of dishonour of a cheque issued on behalf of the firm. The partner, who pleads not guilty on the ground that he is not responsible to the business of the firm should prove the Crl.A. No. 1026 of 2004 5 same in accordance with the proviso to Section 141 of the N.I. Act. It is evident from the decision that it is not obligatory to the complainant to array all partners and the firm as the accused. It is made clear that the averments in the complaint should be the basis for the determination that against whom the court should proceed. In the present case, the complainant made allegations against the present accused alone and it was pleaded and proved that the accused issued the cheque and the cheque was dishonoured for insufficiency of funds. 9. In the decision reported in Gorakhpur University v. Dr.Shitla Prasad Nagendra (AIR 2001 SC 2433) it was held that when a partnership firm, on whose behalf the cheque was issued, was not made an accused and only partners were made accused, the complaint under Section 138 of the N.I. Act cannot be quashed. In the present case, the accused alone is responsible for receiving the amount from the complainant and issued Ext.P1 cheque in his own hand and signature and the complainant has no case that the other partners are also responsible for the conduct of the business of the firm and as such Crl.A. No. 1026 of 2004 6 the complaint is not bad for non-prosecution of other partners. In technical offence like dishonour of cheque, the complainant has every right to prosecute any of the offenders and non-prosecution of other deemed offenders cannot be a ground for acquittal of the accused, who is personally involved in committing the offence under Section 138 of the Act. Since the complainant has proved all the ingredients of the offence under Section 138 of the N.I. Act, the learned Magistrate is not justified in acquitting the accused. As the accused committed the offence under Section 138 of the N.I. Act, he is convicted for that offence. 10. In the decision reported in Damodar S. Prabhu v. Sayed Babalal H (2010(2) KHC 428 (SC)), it was held that in a case of dishonour of cheques, compensatory aspect of the remedy should be given priority over the punitive aspect. Considering the facts and circumstances of the case, I am of the view that sentencing the accused to pay a fine of Rs.60,000/- would meet the ends of justice. Crl.A. No. 1026 of 2004 7 11. Accordingly this appeal is allowed. The judgment of acquittal in S.T.C.No. 3900 of 2003 on the file of the J.F.C.M. Court, Thalasserry under Section 255(1) is set aside and the accused is found guilty and convicted under Section 138 of the N.I. Act and he is sentenced to pay a fine of Rs.60,000/- The said fine shall be paid to the appellant as compensation under Section 357(1) of Cr.P.C. The accused is permitted either to deposit the fine amount before the court below or directly pay the compensation to the appellant within four months from today and produce a memo to that effect before the court below in case of direct payment. If the accused fails to deposit or pay the said amount within the aforesaid period, she shall suffer S.I. for a period of three months by way of default sentence. (M.L. JOSEPH FRANCIS) Judge tm