IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN FRIDAY, THE 13TH FEBRUARY 2009 / 24TH MAGHA 1930 CRL.A.No. 308 of 2001() ----------------------- CC.1086/1997 of CHIEF JUDL.MAGISTRATE, ERNAKULAM .................... APPELLANTS: -------------- MEKEL CORPORATION, XXXIX/2116, WARRIAM ROAD, COCHIN 682016 REPRESENTED BY ITS MANAGING PARTNER K.T. MENON BY ADV. MRI.S.PRAKASH RESPONDENTS: ---------------------- 1. FATHER JOY ARAMBAN GUDI, EXECUTIVE DIRECTOR, M/S NIRMAL GRAM, VANITHA DAIRY CENTRAL SOCIETY, OONJAPARA, KEERAMPARA 2. STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM R1 BY ADV. MR.J.JULIAN XAVIER MR.FIROZ K.ROBIN R2 BY PUBLIC PROSECUTOR MR. RAVINDRA BABU THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 13/02/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V.K. MOHANAN, J. ~~~~~~~~~~~~~~~~~~~~~~~~ Crl. .Appeal No. 308 OF 2001 ~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 13th day of February, 2009 JUDGMENT This is an appeal at the instance of the complainant in a prosecution for the offence under Section 138 of the Negotiable Instruments Act, as the appellant is aggrieved by the order of acquittal passed under Section 255(1) of Cr.P.C in favour of the accused. 2. The case of the appellant is that in discharge of the debt due form the accused, the accused issued a cheque in favour of the complainant on 30.9.96 for an amount of Rs.70,000/- and when the said cheque was presented for encashment dishonoured on the ground that payment was stopped by the drawer. Consequently, a lawyer notice was caused to sent at the instance of the complainant. In spite of receipt of such notice no amount was paid and hence the complainant approached the court by filing the complaint for prosecuting the accused under Section 138 of the Negotiable Instruments Act . On appearance of the accused, particulars of allegation were read over and explained to the accused and he pleaded not guilty which resulted in the further trial of the case. During which PW1 and 2 were examined and Ext.P1 to Ext.P8 were produced and marked from the side of the Crl. Appeal No. 308 of 2001 : 2 : complainant. The accused himself mounted to the box and gave evidence as DW1. From the side of the defence Ext. D1 to D7 documents were also produced and marked. Based upon the rival pleadings and the materials on record, the court below framed 5 issues for its determination. Among which, the second issue is whether Ext.P1 cheque was dishonoured due to insufficiency of funds in the account of the accused or because of it exceeded the amount arranged to be paid on the account of the accused. Finally, the court below found that the cheque was not dishonoured due to the insufficiency of funds or because the cheque amount exceeded the amount arranged to be paid from the account and accordingly the accused is found not guilty and acquitted. It is the above finding and the order of acquittal challenged in this appeal. 3. I have heard the learned counsel appearing for the appellant as well as the respondent/accused. 4. According to the learned counsel for the appellant after having found that complainant has sent statutory notice and accused has failed to make payment in spite of demand the court below ought not to have acquitted the accused. According to the appellant, if ,on issuance of the notice by the payee or the holder in due course after dishonour to the drawer demanding payment within 15 days from the date of receipt of such Crl. Appeal No. 308 of 2001 : 3 : a notice, the drawer does not pay the same, the statutory presumption of dishonest intention, subject to any other liability, stands satisfied. According to the learned counsel, even though cheque was dishonoured on the instruction of drawer to stop payment the same will amount to dishonour of cheque and the same will come within the meaning of Section 138 of the Negotiable Instruments Act. According to the learned counsel the conclusion arrived at by the court below without ascertaining the account No. in Ext.P1 cheque is unsustainable in law and is liable to be set aside. It is also the contention of the appellant that the Ext. D2 sent by the accused was replied by Ext. D4 letter of the complainant. Thus, according to the counsel, no material or statement of accounts were produced to show that excess payment was made and therefore dishonour of cheque even at the instance of the accused by issuing the stop payment will not amount to an offence under Section 138 of the Negotiable Instruments Act . Therefore, according to the learned counsel for the appellant, order of the trial court is liable to be reversed and is liable to be convicted. 4. Per contra, the learned counsel appearing for the respondent submitted that the finding of the trial court is based upon the evidence on materials which would show that cheque in Crl. Appeal No. 308 of 2001 : 4 : question was dishonoured for not of insufficiency of funds in the account of the accused or the cheque amount exceeded the amount arranged to be paid from the account. The learned counsel further submitted that by issuing Ext.D2 notice before the presentation of cheque the complainant was directed to not present the cheque for the reasons stated therein and thereafter the cheque was presented. Thus according to the learned counsel, the trial court found that there was dispute regarding the work undertaken by the complainant and also the payment made by the accused and therefore ingredients of Section 138 is not attracted in this case. It is also the submission of the learned counsel that trial court after considering the evidence and materials on record came into a conclusion that accused is not guilty and accordingly he is acquitted and such an acquittal is not liable to be interfered in appeal. 5. In a prosecution for the offence under Section 138 of the Negotiable Instruments Act, the holder of the cheque/ complainant in a prosecution of the offence under Section 138 of the Negotiable Instruments Act has to necessarily establish that the cheque in question is returned by the bank unpaid either because of the amount standing to the credit of the account is insufficient to honour the cheque or that exceeded the amount Crl. Appeal No. 308 of 2001 : 5 : arranged to be paid from that account by an agreement made with that bank. In the present case specific contention taken by the accused is to the effect that there had been some dispute regarding the actual amount due from the accused, that the transaction was concerning the work contract executed by the complainant for carrying out certain electrification work and the complainant was failed to do the work properly under the contract. Thereafter, there was a dispute with regard to what has been claimed under the contract and therefore payment was stopped by the accused. When PW1 was examined, he had admitted that he had received Ext. D2 notice which contained the case of the accused. The cheque was presented after receipt of Ext. D2 notice. The complainant has also admitted Ext.D1 agreement. When PW2 was examined, he had stated that if the payment had not been stopped cheque would have honoured by the bank because cheque amount was not in excess of the amount arranged to be paid. The above sole statement of PW2 is sufficient to hold that there was sufficient funds to honour the cheque and further cheque amount was not exceeded the amount arranged to be paid. No contra evidence was adduced by the complainant to show that cheque in question was dishonoured for either of the above reasons or for any other reasons under Section Crl. Appeal No. 308 of 2001 : 6 : 138 of Negotiable Instruments Act . In the above factual background, the observation and finding of the trial court that there was some genuine dispute regarding the right of the complainant to realise the cheque amount in view of the breach of contract committed by the complainant in the electrification work as noticed by the electric inspector is a dispute which has to be decided by a competent civil court and the liability can be enforced only by civil action is appears to be correct. Thus on appreciating the evidence on record, the finding arrived on by the court below is absolutely correct and legal and I have to only approve the same and accordingly the order of acquittal is confirmed. 6. In view of the decisions in Ghurey Lal Vs. State of U.P [2008 (4) KLT S.N. 17 (C. No.17) S.C.] and Batcu Venkateshwarlu and Ors Vs. Public Prosecutor of High Court of A.P (2009 (1) Supreme 67), the appellant is miserably failed to make out a compelling and reasonable ground to interfere with the order of acquittal. 7. Hence there is no merit in the appeal and accordingly the same is dismissed. V.K. MOHANAN, JUDGE kmd