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2014 DIGILAW 77 (KER)

K. Narayanan v. K. M. Pradeep Kumar

2014-01-30

M.L.JOSEPH FRANCIS

body2014
Judgment : The revision petitioners herein are the accused in S.T. No.1539 of 1998 of the Court of the Judicial Magistrate of First Class-I, Palakkad. 2. S.T. No.1539 of 1998 arose upon a private complaint filed by the first respondent herein against the accused alleging commission of offences punishable under Section 138 of Negotiable Instruments Act (in short 'the NI Act'). 3. The case of the complainant is that on 21.11.1996 the complainant deposited Rs.10,000/- in the Scheduled Caste Service Co-operative Society Limited No.1024 of Thenkurissi Panchayat for interest at the rate of 10%. The accused are the President and Secretary respectively of the above Bank and when the complainant demanded the amount so deposited the accused on 30.8.1997 issued a cheque bearing No.2803 drawn on the District Co-operative Bank Limited, Kuzhalmannam Branch and on presentation of the above cheque it was returned dishonoured for the reason that there is no sufficient fund to honour the cheque. The complainant issued notice on 9.10.1997 and informed the dishonour of the cheque and demanded payment. On receipt of notice they sent a reply raising false and untenable contentions. No amount was paid. Therefore, a complaint was filed by the complainant under Section 138 of the NI Act. 4. Before the Magistrate Court, PW1 and PW2 were examined and Ext. Nos.1 to 7 were marked on the side of the complainant. No evidence was adduced from the defence side. The learned Magistrate on considering the evidence on record convicted the accused Nos.1 and 2 under Section 138 of the NI Act and they were sentenced to undergo rigorous imprisonment for three months each and to pay a compensation of Rs.6,000/- each to the complainant under Section 357(3) of the Code of Criminal Procedure. Against that conviction and sentence the accused Nos.1 and 2 filed Criminal Appeal No.239 of 2000 before the Additional Sessions (Fast Track - II) Court, Palakkad which was dismissed confirming the conviction and sentence. Against that judgment, the appellants/accused filed this Crl.R.P. 5. Heard the learned counsel for the revision petitioners. At the time of argument, the learned counsel for the revision petitioners raised the following contentions. The courts below went wrong in not finding that since Ext.P1 cheque belongs to the Society, that Society ought to have been made as a party along with the accused. Heard the learned counsel for the revision petitioners. At the time of argument, the learned counsel for the revision petitioners raised the following contentions. The courts below went wrong in not finding that since Ext.P1 cheque belongs to the Society, that Society ought to have been made as a party along with the accused. The courts below ought to have held that prosecution against the person in charge of the business of a company is sustainable only if the company is also made an accused. The courts below erred in not finding that the officer mentioned in Sub section (2) of Section 141 of the NI Act can be made liable only if the prosecution proves that the company committed the offences with the consent or connivance of the officer or due to any negligence attributed to him. Here there is no evidence to prove that the offence was committed with the consent or connivance of the accused. 6. The learned counsel for the revision petitioners invited my attention to a Three Judge Bench decision of the Supreme Court reported in Aneeta Hada v. M/s. Godfather Travels and Tours Pvt. Ltd. [2012(2) KLT 736 (SC), in which it was held: "For maintaining the prosecution under S. 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself." 7. The learned counsel for the revision petitioners invited my attention to the decision of this court reported in Mahesh Kumar v. Taxi Drivers Co-operative Society Ltd. (2010(4) KLT544), in which it was held: "None of the accused can be convicted for offence under Section 138 of the Negotiable Instruments Act, 1881 since no notice is issued to the society (A1) under Section 138(b), the society cannot be convicted for offence under Section 138 of NI Act. The main offender is the society and it cannot be convicted. No person who is stated to be in charge of the society can also be convicted. It is only if the society (A1) is found guilty under Section 138 of the NI Act, the person who are referred to in Section 141 also will be deemed to be guilty of offence under Section 138 of the NI Act. No person who is stated to be in charge of the society can also be convicted. It is only if the society (A1) is found guilty under Section 138 of the NI Act, the person who are referred to in Section 141 also will be deemed to be guilty of offence under Section 138 of the NI Act. In this case, no notice is issued under Section 138(b) of the NI Act to the Society and in the absence of issuance of such notice no offence will lie against society under Section 138 of the NI Act. Since society is not liable, its President and Secretary also cannot be made liable." 8. In the present case, the Scheduled Caste Co-operative Society is not arrayed as an accused and no notice was issued to that Society under Section 138(b) of the NI Act. Therefore that Society cannot be convicted for the offence under Section 138 of the NI Act. If only the Society is found guilty under Section 138 of the NI Act, accused Nos.1 and 2 will be deemed to be guilty of the offence under Section 138 of the NI Act. Since the Society has not committed the offence under Section 138 of the NI Act, the conviction and sentence of accused Nos.1 and 2 under Section 138 of the NI Act has to be set aside. Accordingly this Crl. R.P. is allowed. The conviction and sentence of accused Nos.1 and 2 in S.T. No.1539 of 1998 on the file of Judicial Magistrate of First Class-I, Palakkad under Section 138 of the NI Act is set aside and they are found not guilty and acquitted and they are set at liberty. Their bail bonds are cancelled. If the accused have deposited any amount before the Trial court, they are allowed to get back that amount.