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K.J. Sunil v/s State of Kerala, Represented by The Public Prosecutor, High Court of Kerala at Ernakulam & Another


Company & Directors' Information:- SUNIL & CO PVT LTD [Active] CIN = U32109WB1984PTC037810

    CRL.A. No. 1014 of 2005

    Decided On, 03 July 2020

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE P.V. KUNHIKRISHNAN

    For the Appellant: R. Suraj Kumar, M.A. Rashid, Advocates. For the Respondents: R1, B. Jayasurya, Sr. Public Prosecutor, R2, V. Jayapradeep, Advocate.



Judgment Text


1. The above appeal is filed by the complainant in C.C. No.386 of 2003 on the file of the Chief Judicial Magistrate Court, Kollam.

2. The complaint was filed against the 2nd respondent herein for prosecuting him under Section 138 of the Negotiable Instruments Act, 1881. [Hereinafter, the parties are mentioned according to their rank in the trial court].

3. The case of the complainant, in brief, is as follows:

The accused is a contractor attached to the Milma Dairy, Kollam. The complainant and 12 others were appointed by the accused for carrying out the work in the Milma Dairy. According to the complainant, the accused received an amount of Rs.20,000/- each from the complainant and the other employees on various occasions. According to the complainant, the amount of Rs.20,000/- received by the accused from him was on 25.11.1996. The complainant's case is that, the above amount was received by the accused as security for the job to be carried out by the complainant. It was agreed to repay the amount within one year of the completion of the work. It is the case of the complainant that, the accused also executed separate agreements in favour of the complainant and other employees to that effect. While so, the accused violated the agreement and failed to give the job to the complainant and the 12 other employees. According to the complainant, the accused was absconding. While so, on 12.6.1997, the complainant and the 12 others met the accused and demanded the amount paid by them. According to the complainant, the accused drew a cheque for Rs.2,60,000/- through Central Bank of India in favour of the complainant with others' consent towards the amount due to the complainant and 12 others. When the cheque was presented for encashment through Indian Overseas Bank, Kollam, the cheque was returned for the reason 'funds insufficient'. Further case of the complainant is that, the accused refused to pay the amount even after the statutory notice issued to him. Hence, the complaint was filed.

4. On taking the sworn statement of the complainant, the learned Magistrate took cognizance of the offence under Section 138 of the Negotiable Instruments Act and issued summons to the accused. The accused appeared before the lower court. The particulars of the offence were read over and explained to the accused. He pleaded not guilty.

5. After that, four witnesses were examined on the side of the complainant. PW2 is the complainant himself. Exhibits P1 to P9 are the documents marked on the side of the complainant.

6. After going through the evidence and documents, the trial court found that, the accused is not guilty of the offence punishable under Section 138 of the Negotiable Instruments Act and he was acquitted under Section 255(1) of the Code of Criminal Procedure (Cr.P.C). Aggrieved by the acquittal order, this Criminal Appeal is filed by the complainant.

7. Heard Sri. R.Suraj Kumar, the learned counsel appearing for the appellant and the learned counsel for the 2nd respondent. Heard the learned Public Prosecutor for the 1st respondent.

8. The appellant's counsel submitted that, the trial court has not considered the evidence adduced by the complainant properly. According to the appellant, he proved the offence under Section 138 of the Negotiable Instruments Act. He contended that, the trial court had not considered the fact that, there is a presumption in favour of the complainant under Section 139 and 118 of the Negotiable Instruments Act.

9. The learned counsel for the 2nd respondent contended that, the trial court considered all the evidence and correctly found that, the complainant has not proved the case.

10. The point for consideration, in this case, is whether the accused committed the offence under Section 138 of the Negotiable Instruments Act.

11. The admitted prosecution case is that, only an amount of Rs.20,000/- is due to the complainant. According to the complainant, he and 12 others approached the accused, demanding the amount due to them. The complainant's further case is that, the accused issued a cheque in favour of the complainant Sunil K.J. for an amount of Rs.2,60,000/-. The admitted fact is that, only an amount of Rs.20,000/- is due to the complainant, and the balance amount is due to 12 other persons.

12. The question to be decided is whether the complainant can represent 12 others mentioned in the complaint, accept the amount on behalf of them, and prosecute a complaint on behalf of those 12 others. A reading of Section 138 of the Negotiable Instruments Act, it is clear that, cheques drawn need not be in discharge of drawer's liability alone. This point is considered by this court recently in Bhaskaran A.K. v. K.G.Sheeba and Another [2020(1) KHC 59]. In that case, it is clearly stated that, nowhere in Section 138 of the Negotiable Instruments Act, it is said that, cheque drawn should be in discharge of drawer's liability alone. It can be in discharge of any debt or other liability. In other words, if an amount is due from 'A' to 'C', 'B' can issue a cheque to 'C' on behalf of 'A.' But the question, in this case, is that, certain specific amounts are due to 'B' to 'N' from 'A'. In such situation whether 'B' can receive a cheque from 'A' on behalf of 'C' to 'N' for the amount due to them also without specific authorization or consent from 'C' to 'N' and whether 'B' can prosecute a complaint under section 138 of the Negotiable Instruments Act when that cheque is dishonoured.

13. In this case, the complainant says that, the accused drawn a cheque in his name for payment of Rs.20,000/- each to himself and 12 others. For deciding the question, it will be better to extract Section 138 of the Negotiable Instruments Act.

“138. Dishonour of cheque for insufficiency, etc., of funds in the account.-

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from the account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless-

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(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 course of the cheque within fifteen days of the receipt of the said notice.

Explanation- For the purposes of this section, “debt or other Liability” means a legally enforceable debt or other liability.”

(Emphasis supplied)

A reading of Section 138 of the Negotiable Instruments Act, it is clear that, when a person draws a cheque on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part of any debt or other liability is returned by the bank for the reasons mentioned in the provision, and the other statutory conditions have complied, the offence under Section 138 of the Negotiable Instruments Act is attracted. In Section 138 of the Negotiable Instruments Act, it is stated that 'any amount of money to another person’. The question is whether there can be issuance of cheque to a person for the payment of money to several persons. A reading of Section 138 of the Negotiable Instruments Act, it is clear that, a cheque can be issued for the payment of any amount of money to another person for the discharge, in whole or in part, of any debt or other liability. Another person can be only an individual. Of course, he can represent several others if there is an authorization to him by the other persons to accept the cheque on behalf of others. It can be by way of power of attorney by the other persons to the payee or the holder in due course of the cheque. It can also be by way of different modes of authorization. If the cheque is dishonoured, the prosecution can be initiated by the 'payee' or 'the holder in due course' of the cheque alone. But the 'payee' or the 'holder in due course' can prosecute a complaint in such a situation only if there is an authorization to him by the other persons. The other persons can also adduce evidence before the court that, the payee or the holder in due course received the cheque on their behalf. But without a power of attorney or authorization or any other evidence authorising the payee or the holder in due course, he cannot accept the cheque on behalf of others and prosecute a complaint. Similarly, to succeed in prosecution, the other persons should adduce admissible oral or documentary evidence showing authorization.

14. In this case, the admitted case of the complainant is that, Rs.20,000/- each is due to the complainant and 12 others from the accused. In addition to the complainant, three others were examined before the court. There is no power of attorney or authorization by the other nine persons to the complainant to accept the money on behalf of them or prosecute the case. They also adduced no oral evidence.

15. Section 142 of the Negotiable Instruments Act says that, no court shall take cognizance of any offence punishable under Section 138 of the Negotiable Instruments Act except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque. ‘Payee’ is defined in Section 7 of the Negotiable Instruments Act. The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”. 'Holder in due course’ means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer or the payee or indorsee thereof, if payable to order, before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. Therefore, ‘payee’ or ‘Holder in due course' should have the authority to collect the amount on behalf of others. 'Payee’ or ‘Holde

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r in due course' should produce the power of attorney or other authorization or other evidence before the court to establish that, he received the cheque on behalf of some others also. The admitted case of the complainant is that, he received Ext.P1 cheque on behalf of 12 others. According to him, only an amount of Rs.20,000/- is due to him, and the balance amount of Rs.2,40,000/- belongs to 12 others. But all the 12 others are not before the court. Some of them were examined before the trial court. The complainant produced Ext.P2 series of agreements executed by the others. The agreement is disputed by the accused. The same is not proved in a manner known to law. Therefore, the trial court found that, the complainant has not succeeded in establishing that, Ext.P1 cheque was drawn in discharge of any debt or liability and that, the complainant himself has no locus standi to pursue a complaint. I feel no reason to interfere with the above findings of the trial court. Therefore, there is nothing to interfere with the acquittal order passed in this case. Hence, this Criminal Appeal is dismissed confirming the judgment dated 17.2.2005 in C.C. No.386 of 2003 on the file of the Chief Judicial Magistrate Court, Kollam.
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