Research › Search › Judgment

Kerala High Court · body

2012 DIGILAW 768 (KER)

C. L. Antony v. K. A. Anto

2012-08-13

P.S.GOPINATHAN

body2012
JUDGMENT : 1. Appellant is the complainant in C.C.No.554/2002 on the file of the Judicial Magistrate of the First Class-II, Thrissur. He prosecuted the first respondent alleging offence under Section 138 of the Negotiable Instruments Act (N.I.Act ) with a plea that the first respondent owed a sum of Rs.5,35,000/-and in discharge of the said liability, Ext.P1 cheque dated 12.5.1998 drawn on Canara Bank, Puthanchanda, Trivandrum branch was issued and that when sent for collection through the State Bank of India, Thrissur branch, Ext.P1 was returned dishonoured for insufficient funds along with Ext.P2 memo issued from the drawee bank and Ext.P3 intimation issued from the payee's bank. Exts.P2 and P3 are dated 14.8.1998 and 21.8.1998 respectively. The appellant pleaded that he got Exts.P2 and P3 on 9.9.1998 and issued a notice on 14.9.1998, a copy of which was marked as Ext.P5, demanding discharge of the liability. Though the first respondent acknowledged the notice on 16.9.1998 the liability was not discharged, but a reply was caused. 2. The first respondent, in response to the process served, entered appearance and pleaded not guilty when the particulars of the offence were read over and explained. Therefore, he was sent for trial. On the side of the prosecution, the appellant was examined as PW1. Exts.P1 to P8 were marked. After closing the evidence for the appellant, the 1st respondent was questioned under Section 313 (1)(b) of the Code of Criminal Procedure. He denied the incriminating evidence and contended that he was falsely implicated. On his side, Dws 1 to 6 were examined and Exts.D1 to D4 were marked. 3. The learned Magistrate, on appraisal of the evidence on record, arrived at a finding in favour of the appellant that Ext.P1 was issued in discharge of the liability, when presented for collection it was returned dishonoured and despite the acceptance of notice demanding discharge, the liability was not discharged. But it further found that since Ext.P2 memo is dated 14.8.1998, the notice caused on 14.9.1998 is beyond the time prescribed under proviso (b) to Section 138 of the N.I. Act. Consequently the 1st respondent was acquitted. Now this appeal. 4. But it further found that since Ext.P2 memo is dated 14.8.1998, the notice caused on 14.9.1998 is beyond the time prescribed under proviso (b) to Section 138 of the N.I. Act. Consequently the 1st respondent was acquitted. Now this appeal. 4. According to the learned counsel for the appellant, notice of dishonour has to be counted from the date of communication i.e., on 9.9.1998 when the appellant was informed by his Bank, and since the notice demanding discharge was caused on 14.9.1998, the notice is within time. On the other hand, the contention of the 1st respondent is that payee's bank is an agent of the payee and the intimation of the dishonour of cheque to the payee's bank is to be treated as an intimation to the payee and the period of limitation for sending notice is to be counted from the date of intimation to the payee's bank and that the delay in communication between payee's bank and payee can no way be excluded and if calculated so, Ext.P5 notice demanding discharge is beyond the period of limitation. Therefore, the questions that arise in this appeal is: What is the date of receipt of intimation from the bank regarding the return of the cheque? Whether it is the date of intimation given by the drawee bank or whether it is the date of intimation given by payee's bank through which the cheque was sent for collection? 5. For a better appreciation, a reading of Section 138 of the N.I. Act, as on the date of cheque, (before the amendment) which reads as follows, would be relevant: "138. 5. For a better appreciation, a reading of Section 138 of the N.I. Act, as on the date of cheque, (before the amendment) which reads as follows, would be relevant: "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 that 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 provisions of this Act, be punished with imprisonment for a term which may be extended to one year, now substituted by two years as per Amendment Act 55/2002 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 15 days, now substituted by 30 days as per Amendment Act 55/2002 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". Explanation:- For the purposes of this section, "debt or other liability' means a legally enforceable debt or other liability". Going by the above provision, I find that 'the bank' referred in this provision is nothing but drawee bank and payee's bank has no reference at all. Presenting the cheque to payee's bank to send for collection is beyond the above provisions and it is being done so as a convenience for the holder of cheque and has nothing to do with the statutory provision. 6. Referring to Clause (a) to the proviso to Section 138 of the N.I. Act, the Apex Court of Ishar Alloy Steel Ltd. v. Jayaswants Neco Ltd (2001 (2) KLT 148) case (Supra) in Para 9 held as follows: "The bank" referred to in Clause (a) to the proviso to S.138 of the Act would mean the drawee-bank on which the cheque is drawn and not all banks where the cheque is presented for collection including the bank of the payee, in whose favour the cheque is issued. I find that the said interpretation is to be applied to proviso (b) also. If that is so, to determine the period of 15 days (as stood before amendment) mentioned in proviso (b) to Section 138, the date of intimation from the drawee bank is to be calculated. 7. Here in this case, as I mentioned earlier, Ext.P2 is dated 14.8.1998 and Ext.P3 is dated 21.8.1998. What is the date when the bank of the appellant received Ext.P2 is not known. Therefore, it is to be assumed that Ext.P3 was issued on the same date when the payee's bank had received Ext.P2 and the period of 15 days is to be counted from the date of Ext.P3. The argument of the learned counsel for the appellant, that the period of fifteen days is to be counted from the date of communication to the appellant, which according to him was on 9.9.1998, is without any merit because the State Bank of India, Thrissur, is the agent of the appellant and that the communication to the agent is to be treated as the communication to the principal. The delay in communicating to the appellant is only a delay on the side of his agent. That can no way extend the period prescribed in proviso (b) to Section 138 of the Act. No such legislative intention is inferable from the provision. The delay in communicating to the appellant is only a delay on the side of his agent. That can no way extend the period prescribed in proviso (b) to Section 138 of the Act. No such legislative intention is inferable from the provision. The date of communication to the State Bank of India is to be treated as the date of communication about the dishonouring of the cheque. In the absence of any other evidence to show that the bank of the appellant got intimation regarding the dishonouring of the cheque on any previous date, as stated earlier, it is to be construed that the State Bank of India got the information on 21.8.1998 when Ext.P3 was issued. Since notice was dated 14.9.1998, it is long after the period prescribed under proviso (b) to Section 138 of the N.I. Act. Irrespective of the delay in transaction between the agent and principal, the date of knowledge of the agent is to be treated as the date of knowledge of the principal also. Therefore, to determine the period of fifteen days, as it stood before the amendment, under the proviso (b) to Section 138 N.I. Act is to be counted from 21.8.1998. Therefore, the notice dated 14.9.1998 is beyond the period prescribed. The finding of the trial court that the notice is beyond the period prescribed is correct and no interference is warranted in this appeal. Prosecution is not sustainable as there is no notice in time demanding discharge. In the result, this appeal fails. Accordingly, it is dismissed.