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2007 DIGILAW 511 (KER)

Ramesh Kumar v. State of Kerala

2007-08-10

K.P.BALACHANDRAN

body2007
ORDER K.P. Balachandran, J. 1. Heard arguments of Advocate Sri. R.T. Pradeep for the petitioner and Sri. M. Ramesh Chander for the second respondent. 2. The petitioner is the same in all these cases. He is the accused in C.C. 136/02 and C.C. 272/03 on the file of the Judicial First Class Magistrate's Court-V, Thiruvananthapuram; and C.C. 454/01 on the file of the Judicial First Class Magistrate's Court-III, Thiruvananthapuram in relation respectively to which these Crl.M.C's arise. All the above calendar cases are filed by the second respondent complaining of commission by the petitioner as also accused Nos.1 and 2 of offence punishable under S. 138 of the N.I. Act. The first accused is M/s. Alsa Spring Fields, a company of which the second accused is the Managing Director and the petitioner/ third accused is the Project Manager at Thiruvananthapuram. The company was at the relevant time engaged in construction activities inter alia of residential apartments. The second respondent/the defacto complainant had advanced funds for allotment of a flat at Ernakulam but consequent on dropping up of the proposed venture at Ernakulam, the company ascertained its willingness to have a flat allotted in the residential complex that was undertaken by the company at Thiruvananthapuram. The petitioner was not agreeable. Hence, towards repayment of the amounts advanced by the second respondent on instructions from those at the helm of affairs of the first accused/company, the petitioner/third accused issued three cheques over and above making a cash payment of Rs.50,000/- to the second respondent. It so happened that all the three post dated cheques were being issued admittedly on 25/09/2000 on which day was Annexure-III order passed by the Company Court at Madras ordering winding up of the first accused/ company. Even the second respondent has no case that cheques were being issued by the petitioner being aware of Annexure-III order ordering winding up of the first accused/company. The cheques issued by the petitioner were all dishonoured by the drawee bank/The Karur Vysya Bank Ltd. But cheque No.224620 was being dishonoured vide Annexure-V/Dishonour Memorandum dt. 01/11/2000 assigning the reason "Funds Insufficient". Cheque No.224621 which is subject matter in Crl.M.C. 462/04 and cheque No.224623 which is subject matter in Crl.M.C.459/04 were being dishonoured respectively under Annexure-V/Dishonour Memorandums filed in those cases assigning the reason "operations stopped by the court". 3. 01/11/2000 assigning the reason "Funds Insufficient". Cheque No.224621 which is subject matter in Crl.M.C. 462/04 and cheque No.224623 which is subject matter in Crl.M.C.459/04 were being dishonoured respectively under Annexure-V/Dishonour Memorandums filed in those cases assigning the reason "operations stopped by the court". 3. It is vehemently contended before me by the learned counsel for the petitioner that as per Annexure-III order of the Company Court, Madras, the first accused/third respondent company was wound up on 25/09/2000 and the company has become non est and what remained was the proceeding for distribution of its assets by the official liquidator and that therefore, by application of S.141 of the N.I. Act, it cannot be said that the petitioner who has drawn the cheque in favour of the second respondent on behalf of the third respondent/company which is non est is liable for offence under S.138 of the N.I. Act. It is not in dispute that the company owed amounts to the second respondent and it was in discharge of that liability, that all the three cheques were issued by the petitioner who was the Project Manager of the company at Thiruvananthapuram on behalf of the company. Admittedly, there is no evidence as to whether the cheques were being issued with knowledge of Annexure-III order. However, the drawee bank was also not aware of the winding up proceedings and they had also not been prohibited from making payments from the account of the first accused/company as on the date of dishonour of Annexure-V cheque involved in C.C. 136/02 aforesaid and the reason for dishonour is "Funds Insufficient". It cannot be said that no offence under S.138 of the N.I. Act stands made out at least prima facie in relation to the dishonour of cheque No.224620 vide Annexure-III dishonour memorandum which has given rise to the complaint in C.C.136/02. Hence, there is no merit in Crl.M.C. 461/04. 4. As far as the cheques which are subject matter of complaint-in C.C.272/03 and C.C.454/01, the reason for dishonour assigned is "operations stopped by the court". Hence, there is no merit in Crl.M.C. 461/04. 4. As far as the cheques which are subject matter of complaint-in C.C.272/03 and C.C.454/01, the reason for dishonour assigned is "operations stopped by the court". When by reason of an order of court, bank was necessarily not to make any payment from out of the accounts of the first accused/company, it is unjust and illegal to say that an employee of the company like the petitioner who has issued those two cheques to the second respondent on behalf of the first accused/ company on directions from those at the helm of affairs of the company as on the date of issuance of those cheques, can be held liable for offence under S.138 of the N.I. Act. 5. It is vehemently contended by the counsel for the second respondent relying on the decision in Pankaj Mehra vs. State of Maharashtra ( 2000 (2) KLT 338 (SC)) that when a company goes into liquidation, enforcement of debt due from the company is only made subject to the conditions prescribed therein, but that does not mean that debt has become unenforceable altogether and hence, that is no premise to hold that debt is legally unenforceable though the modality of its realization can only be as provided in the Companies Act and that cheque issued on behalf of the company when dishonoured, the drawee, in any event, cannot escape from the penal provisions of S.138 of the N.I. Act which creates a statutory offence and that the drawer of the cheque when he fails to make the payment has necessarily to be held liable for offence under S.138 of the NJ Act though under the circumstances in which he has rendered himself liable for the offence, he can plea for a lesser sentence being awarded. The said contention does not worth any merit in view of the fact that the cheques were being dishonoured for reason of payments being disabled to be made as operation of the account was stopped by court orders. 6. The said contention does not worth any merit in view of the fact that the cheques were being dishonoured for reason of payments being disabled to be made as operation of the account was stopped by court orders. 6. It is also contended by the counsel for the second respondent in view of the decision of the Apex Court in S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla (2005 (4) KLT 209 (SC)) that so far as the signatory of the cheque is concerned when the cheque is dishonoured, he is clearly responsible for the incriminating act and he will be fastened with liability under S.141(1) of the N.I. Act. The said argument also will not hold good for the reasons already stated when the payment was being stopped as per orders of court. Consequently therefore, the proceedings in C.C.272/03 and C.C.454/01 aforesaid are liable to be quashed in relation to the petitioner. 7. In the result, I dismiss this Crl.M.C No.461/04 but allowing Crl.M.C Nos.459/04 and 462/04. I quash the proceedings in C.C.Nos.272/03 and 454/01 respectively on the files of the Judicial First Class Magistrate's Court-V and Judicial First Class Magistrate's Court-III, Thiruvananthapuram inasmuch as it is as against the petitioner who is the third accused in the case.