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2024 DIGILAW 1236 (KER)

N. M. Minerals India Private Ltd. v. P. K. Raju

2024-09-26

SOPHY THOMAS

body2024
JUDGMENT : This appeal is at the instance of the complainant in CC No.653 of 2002 on the file of Judicial Magistrate of First Class-I, Cherthala, challenging acquittal of the accused, in a complaint filed by him under Section 138 of the Negotiable Instruments Act (N.I.Act for short), as per judgment dated 31/1/2006. 2. The complainant-N.M.Minerals India Private Ltd is a Private Limited Company registered under the Indian Companies Act, represented by its power of attorney holder. 3. The case of the appellant/complainant is that, towards the price of mineral water purchased by the accused from that company, he owed a sum of Rs.34,940/-, and towards discharge of that liability, he issued Ext.P1 cheque dated 23/8/2001 drawn on District Co-operative Bank, Kunnukuzhy Branch, Thiruvananthapuram. When that cheque was sent for collection through his bank i.e. Dhanlaxmi Bank, Cherthala Branch on 20/2/2002, it was returned dishonoured for the reason ‘Payment stopped by the drawer’, as per Ext.P3 dishonour memo dated 25/2/2002. Intimation of dishonour was received by the complainant on 6/3/2002. Thereafter, he sent registered lawyer notice to the accused on 14/3/2002. In spite of receipt of notice on 16/3/2002, the amount was not paid and no reply was sent. Hence, he filed the complaint under Section 138 of the NI Act. 4. On appearance of the accused before the trial court, particulars of offence were read over and explained, to which he pleaded not guilty and claimed to be tried. 5. The power of attorney holder of the complainant was examined as PW1 and Exts.P1 to P10 were marked from the side of the complainant. 6. On closure of evidence of the complainant, the accused was questioned under Section 313 of Cr.P.C. He denied all the incriminating materials brought on record, and pleaded that his two cheque leaves were stolen by somebody, and misusing one of the cheques, a false complaint was filed against him by the complainant. Moreover, there was material alteration in that cheque so as to invalidate the same. But, no defence evidence was adduced by him, to substantiate his case. 7. On appreciating the facts and evidence, and on hearing the rival contentions from either side, the trial court found that the cheque was presented before the drawee bank beyond the period of six months, and so, no criminal liability could have been fastened on the accused. But, no defence evidence was adduced by him, to substantiate his case. 7. On appreciating the facts and evidence, and on hearing the rival contentions from either side, the trial court found that the cheque was presented before the drawee bank beyond the period of six months, and so, no criminal liability could have been fastened on the accused. Hence he was acquitted, under Section 138 of the NI Act, against which the complainant has preferred this appeal. 8. Heard learned counsel for the appellant/complainant and learned counsel for the 1st respondent/accused. 9. The only ground under which the trial court acquitted the accused was that, the cheque was presented before the drawee bank, beyond the period of six months. The cheque is dated 23/8/2001. Ext.P3 dishonour memo will show that the cheque was dishonoured on 25.02.2002. So, according to the 1st respondent/accused, the cheque was a stale one. 10. Proviso (a) to Section 138 of the N.I Act reads thus: “138. Dishonour of cheque for insufficiency, etc of funds in the accounts. x x x (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.” 11. The complainant presented the cheque before the collection bank on 20/2/2002 i.e before completion of the period of six months from the date of the cheque. It is no more res-integra that the cheque should be presented before the drawee bank within the period of six months from the date, on which the cheque was drawn. 12. In Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. [2001 KHC 324], the Hon’ble Apex Court considered the following questions: (a) What is meant by, “the bank” as mentioned in clause (a) of the proviso to S.138 of the Negotiable Instruments Act, 1881? (b) Does such bank mean the bank of the drawer of the cheque or covers within its ambit any bank including the collecting bank of the payee of the cheque? (c) To which bank the cheque is to be presented for the purposes of attracting the penal provisions of S.138 of the Act? 13. Hon’ble Apex Court answered these questions, in Paragraphs 9 and 10 of the decision cited above, which read thus: “9. (c) To which bank the cheque is to be presented for the purposes of attracting the penal provisions of S.138 of the Act? 13. Hon’ble Apex Court answered these questions, in Paragraphs 9 and 10 of the decision cited above, which read thus: “9. The use of the words "a bank" and "the bank" in the section is an indicator of the intention of the Legislature. The former is an indirect article and the latter is pre-fixed by a direct article. If the Legislature intended to have the same meanings for "a bank" and "the bank", there was no cause or occasion for mentioning it distinctly and differently by using two different articles. It is worth noticing that the word "banker" in S.3 of the Act is pre-fixed by the indefinite article "a" and the word "bank" where the cheque is intended to be presented under S.138 is pre-fixed by the definite article "the". The same section permits a person to issue a cheque on an account maintained by him with a bank and makes him liable for criminal prosecution if it is returned by the bank unpaid. The payment of the cheque is contemplated by the bank meaning thereby where the person issuing the cheque has an account. "The" is the word used before nouns, with a specifying of particularising effect opposed to the indefinite or generalising force of "a" or "an". It determines what particular thing is meant; that is, what particular thing we are to assume to be meant. "The" is always mentioned to denote a particular thing or a person. "The" would, therefore, refer implicitly to a specified bank and not to any bank. 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. 10. It, however, does not mean that the cheque is always to be presented to the drawer's bank on which the cheque is issued. 10. It, however, does not mean that the cheque is always to be presented to the drawer's bank on which the cheque is issued. The payee of the cheque has the option to present the cheque in any bank including the collecting bank where he has his account but to attract the criminal liability of the drawer of the cheque such collecting bank is obliged to present the cheque in the drawee or payee bank on which the cheque is drawn within the period of six months from the date on which it is shown to have been issued. In other words a cheque issued by A in favour of B drawn in a bank named C where the drawer has an account can be presented by the payee to the bank upon which it is drawn, i.e., C bank within a period of six months or present it to any other bank for collection of the cheque amount provided such other bank including the collecting bank presents the cheque for collection to the C bank. The non presentation of the cheque to the drawee-bank within the period specified in the section would absolve the person issuing the cheque of his criminal liability under S.138 of the Act, who otherwise may be liable to pay the cheque amount to the payee in a civil action initiated under the law. A combined reading of S.2, 72 and 138 of the Act would leave no doubt in our mind that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable. Such presentation is necessarily to be made within six months at the bank on which the cheque is drawn, whether presented personally or through another bank, namely, the collecting bank of the payee”. 14. Relying on Ishar Alloy Steels case cited supra, this Court in the decision Thomas P.J v. Vijayakumari and others [ 2014 (2) KHC 265 ] held that, presentation of the cheque to “the Bank” mentioned in the proviso (a) of Section 138 of the N.I Act is obviously the drawee bank and not any other bank as the payee wishes. 15. 15. Learned counsel for the appellant would say that, as far as Ext.P1 cheque was concerned, time was there till 23/2/2002 for presenting the cheque before the drawee bank, as the cheque was drawn on 23/8/2001. 23/2/2002 was a holiday for the bank, due to Bakrid and 24/2/2002 was a Sunday. In paragraph 9 of the trial court judgment, the holidays on 23/2/2002 and 24/2/2002 are specifically mentioned. So, the next working day was on 25/2/2002 and the cheque was dishonoured on that day. 16. Going by Section 10 of the General Clauses Act, 1897, where, by any Central Act or Regulation made after the commencement of the General Clauses Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time, if it is done or taken on the next day afterwards, on which the Court or office is open. So if a person is required to submit a document to a court or office within a particular period, and if the last day of that period happens to be a holiday, it can be done on the next day. This extension applies only if the last day of the period happens to be a holiday. 17. The appellant presented the cheque before Dhanlaxmi Bank on 20/2/2002 where he was having an account. That bank was at Cherthala and the drawee bank was at Thiruvananthapuram. After receiving the cheque on 20/2/2002, the collection bank might have forwarded the cheque to the drawee bank for collection, on that day itself or on the next day. Even if the cheque had reached the drawee bank on 21/2/2002 or on 22/2/2002, due to intervening holidays on 23/2/2002 and 24/2/2002, it might have been dishonoured only on the next working day i.e 25/2/2002. 18. In order to determine the period of six months, from the date on which the cheque was drawn, the crucial date is the date on which the cheque was presented before the drawee bank for encashment. 18. In order to determine the period of six months, from the date on which the cheque was drawn, the crucial date is the date on which the cheque was presented before the drawee bank for encashment. If the cheque was presented before the drawee bank before expiry of the six months period, the cheque will not become stale, if at all that cheque was dishonoured on a day after expiry of the period of six months, from the date on which the cheque was drawn. Dishonour on a subsequent date will not affect the validity of the cheque, if it was received before the drawee bank within the stipulated period. The dishonour date cannot be treated as the date on which the cheque was presented before the drawee bank, unless otherwise proved. 19. In the case on hand, the cheque was presented before the collection bank on 20.02.2002 and from there it was sent to the drawee bank. Two clear working days were there for sending the cheque to the drawee bank, and so it might have reached the drawee bank on 21.02.2002 or on 22.02.2022. Admittedly, 23.02.2002 and 24.02.2002 were holidays for the bank. So, in all probability, the cheque might have been dishonoured only on 25.02.2002. The dishonour of the cheque on 25.02.2002 doesn’t mean that the cheque reached that bank only on 25.02.2002, in the absence of any evidence to support. 20. The drawee bank is the competent authority to say whether the cheque was presented before that bank within the period of six months or not, so as to treat it as valid or invalid as the case may be. There was no endorsement whatsoever made by the drawee bank in the cheque, to show that it was a stale one. If that cheque was presented before the drawee bank after the period of six months, it would have been treated as a stale one, and that fact would have been stated in the dishonour memo itself. When the complainant presented the cheque before the collection bank within time, and it was dishonoured by the drawee bank stating sole reason ‘payment stopped’, the only inference we can draw is that there was no infirmity for that cheque or any doubt as to its validity. In such circumstances, the burden to prove it otherwise shifts to the accused. When the complainant presented the cheque before the collection bank within time, and it was dishonoured by the drawee bank stating sole reason ‘payment stopped’, the only inference we can draw is that there was no infirmity for that cheque or any doubt as to its validity. In such circumstances, the burden to prove it otherwise shifts to the accused. So the finding of the trial court that the cheque was presented before the drawee bank after the period of six months from the date of drawing the cheque, is without any factual foundation. 21. Learned counsel for the 1st respondent would contend that, there was no transaction whatsoever between himself and the complainant, and no cheque was ever issued towards discharge of any legally enforceable debt. According to him, he lost his two cheque leaves, and he had issued ‘stop payment’ to the bank, and also filed a complaint before Police. It is trite law that an offence under Section 138 of NI Act will be attracted even if cheque was dishonoured for the reason payment stopped by the drawer. 22. While cross examining PW1, learned counsel for the 1st respondent/ accused suggested to him that his two cheque leaves were stolen on 11/10/2000, and he had filed complaints before the bank as well as before the police station. Ext.P5 lawyer notice was received by the 1st respondent/accused on 16/3/2002, as seen from Ext.P7 postal acknowledgement card. If he was aware of the fact that, his two cheque leaves were stolen on 11/10/2000, and he had made complaints before the bank as well as before the police station regarding theft of the cheque leaves, there was no reason for him, for not sending a reply to the complainant stating the real state of affairs. No records were called for by the 1st respondent/accused from the drawee bank to show that even prior to the date of Ext.P1 cheque, he had issued stop payment to that bank. No records were called for from the drawee bank to show the date, on which Ext.P1 cheque reached that bank, if he had a case that the cheque was received before that bank after six months of its drawing. 23. No records were called for from the drawee bank to show the date, on which Ext.P1 cheque reached that bank, if he had a case that the cheque was received before that bank after six months of its drawing. 23. Regarding material alteration of the cheque alleged by the 1st respondent, he had no case that he issued Ext.P1 cheque to the complainant, bearing the date 13/8/2002, which was subsequently altered by the complainant as 23/8/2001. So, the finding of the trial court that there was no material alteration in that cheque is liable to be upheld. 24. Adverting to the facts and circumstances as stated above, this Court is of the view that, acquittal of the accused under Section 138 of the NI Act, on the sole ground that the cheque was presented before the drawee bank beyond the statutory period of six months is liable to be set aside. The available facts and circumstances amply prove that, the 1st respondent issued Ext.P1 cheque to the complainant, towards the price of mineral water purchased by him, and that cheque was returned dishonoured for the reason ‘payment stopped’. After complying with all the legal formalities, within the statutory time frame, he filed complaint against the accused. The presumption under Section 139 of the N.I Act also is there in favour of the complainant, and no evidence whatsoever is adduced by the 1st respondent/accused to rebut that presumption. So, the accused is found guilty under Section 138 of NI Act, and he is convicted thereunder. 25. Coming to the sentencing part, the cheque is of the year 2001, and the amount involved is only Rs.34,940/-. After a long gap of about 23 years, it is not fair to send him behind the bars, for a transaction involving only Rs.34,940/-. So, this Court is inclined to sentence him to undergo simple imprisonment for one day till rising of the court, and to pay compensation of Rs.35,000/- to the complainant. In default of payment, he has to undergo simple imprisonment for three months. 26. The 1st respondent/accused is directed to appear before the trial court, on or before 25/10/2024 to receive the sentence, and to pay the compensation amount to the complainant. If the complainant is absent to receive the compensation amount, the accused can deposit that amount before the trial court. 26. The 1st respondent/accused is directed to appear before the trial court, on or before 25/10/2024 to receive the sentence, and to pay the compensation amount to the complainant. If the complainant is absent to receive the compensation amount, the accused can deposit that amount before the trial court. If the accused fails to appear before the trial court as directed above, to receive the sentence and to pay the compensation, the trial court has to take steps for executing the sentence without further delay. 27. Registry to transmit a copy of this judgment along with the trial court records forthwith, for facilitating the trial court to execute the sentence as ordered above. Hence the appeal stands allowed.