IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN WEDNESDAY, THE 26TH MARCH 2008 / 6TH CHAITHRA 1930 CRL.A.No.1115 of 2003 (C) ------------------------------- AGAINST THE ORDER IN CRL.L.P.12/2003 Dated 23/05/2003 ST.2074/2000 of JUDL. MAGISTRATE OF FIRST CLASS-I, KOZHIKODE .................... APPELLANT: COMPLAINANT: ---------------------------------- THE KERALA STATE CO-OPERATIVE MARKETING FEDERATION LTD., F-1101, BRANCH OFFICE, SOUTH BEACH ROAD, KOZHIKODE, REP. BY ITS BRANCH MANAGER, M. ABDURAHIMAN, S/O. LATE ABDULLA HAJI. BY ADV. SRI.P.PARAMESWARAN NAIR SRI.MILLU DANDAPANI-SC FOR MAKTG. FED. RESPONDENTS: ACCUSED: ------------------------------- 1. PATHYAPURAKKAL KUNHIKRISHNAN NAIR, PRESIDENT, CHEEKKUNNUMMAL SERVICE CO-OPERATIVE BANK, P.O. CHEEKKUNNUMMAL, VIA. KAKKATTIL, VATAKARA. 2. K.P. KANNAN, SECRETARY, CHEEKKUNNUMMAL SERVICE CO-OPERATIVE BANK, CHEEKKUNNUMMAL P.O., KAKKATTIL, VATAKARA. 3. THE CHEEKKUNNUMMAL SERVICE CO-OEPRATIVE BANK, CHEEKKUNNUMMAL P.O., VIA. KAKKATTIL, VATAKARA. BY PUBLIC PROSECUTOR SRI.P.RAVINDRA BABU THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 26/03/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.P.BALACHANDRAN, J. ------------------------------------------------ Crl. Appeal No.1115 of 2003 ------------------------------------------------ Dated this the 26th day of March, 2008 JUDGMENT The complainant in S.T.2074/2000 on the file of the Judicial First Class Magistrate's Court-I, Kozhikode is the appellant in this appeal assailing acquittal of the respondents of offence under Section 138 of the N.I. Act under Section 255(1) of the Criminal Procedure Code. 2. The appellant filed complaint in the court below against the respondents alleging that the appellant is a Co-operative Society registered under the Co-operative Societies Act and is represented by its Branch Manager; that respondents 1 and 2 are the President and Secretary of the third respondent Cheekkunnummal Service Co-operative Bank; that the appellant is a society engaged in the business of procuring and distributing agricultural produce, fertilizers etc; that the third respondent had Crl. Appeal No.1115 of 2003 -2- purchased fertilizers from the appellant on credit and towards part payment of the value of the same first and second respondents have jointly issued Ext.P1 cheque dt.28/01/2000 for Rs.50,000/- drawn on the account of the third respondent at the Calicut branch of the District Co-operative Bank; that the appellant presented the cheque for collection through their bankers namely the Calicut branch of the Andhra Bank on 12/02/2000 and thereupon, it was returned dishonoured assigning the reason “funds insufficient” under Ext.P2 memorandum issued by the drawee bank and the cheque along with Ext.P2 memorandum was delivered over to the appellant by their bankers under Ext.P2(a) debit advice; that the appellant thereupon issued registered notice to the second respondent intimating him of the dishonour of Ext.P1 cheque and demanding payment of the amount covered by the cheque; that the second respondent who received the said notice on Crl. Appeal No.1115 of 2003 -3- 21/02/2000 under Ext.P3(a) postal acknowledgment card has neither sent reply to the said notice nor have the respondents paid up the amounts covered by the cheque either within the statutory period or ever thereafter and the respondents have thereby committed an offence punishable under Section 138 of the N.I. Act. 3. The learned Magistrate recorded the sworn statement of the complainant and registered the case on the file of his court as S.T.2074/2000 taking cognizance of the offence under Section 138 of the N.I. Act. 4. On appearance of the first and second respondents in the court below pursuant to issuance of summons, they were served with copies of all relevant records in the case and they were questioned by the Magistrate reading over the particulars of the offence and explaining it to them. Thereupon, they pleaded not guilty and consequently, a trial of the case was conducted by the court below. Crl. Appeal No.1115 of 2003 -4- 5. On the side of the appellant/ complainant, PW1 is examined and Exts.P1 to P3 and C1 were got marked. On the appellant closing their evidence, respondents 1 and 2 were questioned under Section 313 Cr.P.C. Thereupon, they generally denied all incriminating circumstances appearing in evidence against them and maintained that they are innocent. However, they did not adduce any evidence in defence. 6. The learned Magistrate considered the case in the light of the evidence adduced as aforesaid and acquitted the respondents of the offence under Section 138 of the N.I. Act in view of his finding that the signatory to the complaint is not competent to represent the complainant/Co-operative Marketing Federation and further that no notice has been issued either to the first accused or to the third accused and therefore, there is no cause of action for a complaint under Section 138 of Crl. Appeal No.1115 of 2003 -5- the N.I. Act for reason of non-compliance with proviso (b) to Section 138 of the N.I. Act. 7. Respondent No.1 though served has not entered appearance and he remained absent and ex parte. Service to R3 was also effected on R1. R2 is reported dead. 8. The power of attorney produced by the appellant in the court below executed by the Managing Director of the appellant Co- operative Marketing Federation in favour of PW1/the signatory to the complaint and who is the Branch Manager of the Co-operative Marketing Federation has been marked as Ext.P4 allowing Crl.M.A. No.2795/08. Ext.P4 power of attorney shows that the signatory to the complaint is authorised by the Managing Director of the complainant/Co-operative Marketing Federation to initiate legal proceedings as per the provisions contained in the N.I. Act. That is sufficient authority for PW1/the signatory to the complaint to prosecute the Crl. Appeal No.1115 of 2003 -6- complaint filed by the Kerala State Co- operative Marketing Federation who is the appellant/complainant. It was the failure on the part of the court below to mark Ext.P4 power of attorney produced in that court that lead to the finding in the impugned judgment that the signatory to the complaint is not authorised to file the complaint on behalf of the appellant/complainant/the Co-operative Marketing Federation. The said finding deserves to be set aside and I do so. 9. The next ground on which the court below has acquitted the respondents is for the reason that no cause of action has arisen for filing a complaint as Ext.P3 notice was issued on behalf of the appellant only to the Secretary of the third respondent/bank who is the second respondent/second accused in the case and that is not notice to the third respondent on whose behalf respondents 1 and 2 have signed Ext.P1 cheque. The first Crl. Appeal No.1115 of 2003 -7- respondent is Kunhikrishnan Nair, President of the third respondent/bank and the second respondent is K.P.Kannan, Secretary of the third respondent/bank. They are the signatories to Ext.P1 cheque as obviously the third respondent which is a Co-operative Bank can act only through the Secretary or the President or both of them, as the case may be. Ext.P3 notice had been issued to the Secretary of the Third respondent/bank. The drawer of the cheque is the third respondent/Co-operative Bank and when the Secretary of the said Co- operative Bank is issued with notice consequent on dishonour of the cheque issued as aforesaid, that is sufficient notice to the third respondent and when the third respondent/Co-operative Bank is liable for offence under Section 138 of the N.I. Act, respondents 1 and 2 who have signed in Ext.P1 cheque on behalf of the third respondent also has to be held liable along with third Crl. Appeal No.1115 of 2003 -8- respondent for offence under Section 138 of the N.I. Act. However, as against the second respondent/Secretary, the appeal has abated and respondents 1 and 3 are liable to be convicted and sentenced for offence under Section 138 of the N.I. Act as all the statutory formalities required for the maintainability of a complaint under Section 138 of the N.I. Act stands complied with in the instant case and the reason for dishonour of the cheque is also that there is no sufficient funds in the account of the third respondent/Co-operative Bank to honour the said cheque. Hence, in reversal of the order of acquittal passed by the court below, respondents 1 and 3 are liable to be convicted for offence under Section 138 of the N.I. Act allowing this appeal. 10. In the result, allowing this appeal, I set aside the judgment impugned acquitting the respondents of offence under Section 138 Crl. Appeal No.1115 of 2003 -9- of the N.I. Act and convict respondents 1 and 3 of offence under Section 138 of the N.I. Act. The appeal has abated as against the second respondent. Third respondent is sentenced to pay a fine of Rs.5,000/- and the first respondent is sentenced to undergo imprisonment for a term of one month and is also ordered to pay by way of compensation an amount of Rs.60,000/- to the appellant. The court below shall enforce the sentence against respondents 1 and 3 forthwith. K.P.BALACHANDRAN, JUDGE kns/-