Cheque; Sarafudheen Vs. T. Muhammed Ashraf [Kerala High Court, 15-07-2016] Case Law
Section 138 of the Negotiable Instruments Act
Michael Kuruvilla v. Joseph J. Kondody, 1998 (1) KLT 384
Babu Lal v. Kewal Chand, 2008 (1) Crimes 147 (MP)
Negotiable Instruments Act, 1881 – Ss. 9 & 138 – ‘self cheque’ – holder in due course – cheque was issued in the form of a “self cheque” – at the same time, it is a bearer cheque also, since the terms “or bearer” has not been scored off – therefore, cheque could be treated as a “bearer cheque” – therefore, when cheque is a “bearer cheque”, the possessor of the cheque for consideration can be termed as a “holder in due course”.
Negotiable Instruments Act, 1881 – Ss. 9 & 118 (g) – holder of the cheque – when it is admitted that the complainant is the holder of the cheque, the presumption under Section 118(g) of the N.I.Act is available to the complainant. It shall be presumed that the complainant being the holder of the cheque is the holder in due course within the meaning of Section 9 of the N.I. Act.
# Cheque
IN THE HIGH COURT OF KERALA AT ERNAKULAM
B. KEMAL PASHA, J.
Crl. Appeal No. 1870 of 2009
Dated this the 15th day of July, 2016
CRL.A.NO.775/2003 OF SESSIONS COURT, THALASSERY C.C.NO.351/2003 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT, THALASSERY
PETITIONER(S)/COMPLAINANT
SARAFUDHEEN
BY ADV. SRI.CIBI THOMAS
RESPONDENT(S)/ACCUSED AND STATE
T. MUHAMMED ASHRAF
R1 BY ADV. SRI.C.K.SREEJITH R2 BY PUBLIC PROSECUTOR SMT.MAYA
J U D G M E N T
Challenging the judgment of acquittal passed by the Additional Sessions Court, Thalassery, in Crl.Appeal No.775 of 2003, the complainant in the matter has come up in appeal. Crl.Appeal No.775 of 2003 of the court below was filed by the accused in C.C.No.351 of 2003 of the Additional Chief Judicial Magistrate’s Court, Thalassery.
2. The case before the trial court is as a result of a private complaint filed by the appellant herein as complainant, against the 1 st respondent herein as accused, alleging an offence punishable under
# Section 138 of the Negotiable Instruments Act
The complaint was filed through PW-1, who was the power of attorney holder of the complainant.
3. The case of the complainant is that the accused borrowed an amount of ₹2,25,000/- from the complainant on agreeing to repay the same within 6 months and when he demanded the repayment, the accused issued Exhibit-P1 cheque dated 15.09.2000, which on presentation returned dishonoured for insufficiency of funds in the accounts of the accused. The complainant caused to issue demand notice dated 09.12.2000 to the accused under Section 138(b) of the Negotiable Instruments Act. The notice returned with the endorsement, ‘out of India’.
4. The trial court recorded the evidence of PW-1 and marked Exhibits- P1 to P5. On the side of the accused, DW-1 and DW-2 were examined and Exhibits-D1 to D3 were marked. DW-1 is the accused and DW-2 is the elder brother of the accused.
5. It seems that a strange contention was taken by the appellant with regard to Exhibit-P1 cheque. It was contended that Exhibit-P1 cheque was issued by the accused to his elder brother DW-2, when DW-2 was an inpatient in a hospital, who was admitted for a surgery to his lungs. It is contended that the said cheque was stolen away by the complainant and after misusing it, the complaint was filed. Apparently, the said contention is not believable. The trial court found that the accused has committed the offence under Section 138 of the Negotiable Instruments Act, convicted him thereunder and sentenced him to undergo simple imprisonment for six months and to pay a fine of ₹2,50,000/-, in default to undergo simple imprisonment for three more months.
6. The matter was taken in appeal as aforesaid. The appellate court, through the impugned judgment, held that Exhibit-P1 is a ‘self cheque’ and therefore the complainant could not be treated as a holder in due course within the meaning of Section 9 of the Negotiable Instruments Act and therefore, the complaint as such is not maintainable.
7. The lower appellate court found that as per Section 142 of the Negotiable Instruments Act, the court could take cognizance of an offence under Section 138 of the Negotiable Instruments Act only on a complaint in writing made by the payee or a holder in due course. On the said reasoning and also by relying on a stray sentence in ExhibitD3 deposition, allegedly made by the complainant in another case that ‘there is no close acquaintance between the complainant and the accused’, the court below has chosen to pass the judgment of acquittal.
8. This is a case wherein Ext.P1 cheque was issued in the form of a “self cheque”. At the same time, it is a bearer cheque also, since the terms “or bearer” has not been scored off. Therefore, Ext.P1 cheque could be treated as a “bearer cheque”. As per Section 9 of the N.I. Act, “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, ………” Therefore, when Ext.P1 cheque is a “bearer cheque”, the possessor of the cheque for consideration can be termed as a “holder in due course”. The court below has lost sight of the fact that Ext.P1 cheque could be treated as a “bearer cheque”.
9. Apart from the above, it seems that the court below has lost sight of the presumptions available to the complainant under Section 118(g) of the N.I. Act which says that until the contrary is proved, it shall be presumed that the holder of a negotiable instrument is a holder in due course. Here, admittedly, the complainant is the holder of the cheque. According to the accused, Ext.P1 cheque was issued by him to his elder brother DW2, while DW2 was an inpatient in a hospital, and that the said cheque was stolen away by the complainant. Even in such case, there is clear admission from the part of the accused that the complainant is the holder of the cheque. Over and above it, the complainant could present the cheque before the Bank and got it dishonoured. Therefore, when it is admitted that the complainant is the holder of the cheque, the presumption under Section 118(g) of the N.I.Act is available to the complainant. It shall be presumed that the complainant being the holder of the cheque is the holder in due course within the meaning of Section 9 of the N.I. Act.
10. The learned counsel for the petitioner has invited the attention of this Court to the decision in
# Michael Kuruvilla v. Joseph J. Kondody, 1998 (1) KLT 384
wherein it was held that the non-mentioning of the payee’s name and the striking off of the words ‘or bearer’ in a cash cheque will not make the cheque invalid. It was held therein that even in such case the person who was the holder of the cheque could be a holder in due course, who could well maintain a complaint under Section 142 of the N.I.Act.
11. Here, in this particular case, the position is much better. The cheque is styled as a self cheque and over and above it, the term ‘or bearer’ has not been scored off. A similar situation as the one in this case was dealt with by the Madhya Pradesh High Court in
# Babu Lal v. Kewal Chand, 2008 (1) Crimes 147 (MP)
wherein also it was held that such a complainant who was holding such a cheque could be a holder in due course, who could maintain a complainant under Section 142 of the N.I. Act.
12. From all the above, it has clearly come out that the lower appellate court has committed a grave error in passing the judgment of acquittal by reversing the judgment passed by the trial court. The impugned judgment of the lower appellate court is liable to be set aside and the conviction entered by the trial court is only to be maintained. Regarding the sentence, this Court is of the view that when so much time has been elapsed, interest of justice demands the reduction in sentence of imprisonment. This Court is of the view that a sentence of imprisonment till the rising of the court and to pay a fine of ₹25,000/-, in default, to undergo simple imprisonment for six months, will meet the ends of justice in this case.
In the result, this Appeal is allowed and the impugned judgment of the lower appellate court is set aside. The conviction passed by the trial court is maintained. The sentence imposed by the trial court is modified as follows: The accused is sentenced to undergo imprisonment till the rising of the court and to pay a fine of ₹25,000/- within three months from today, in default, to undergo simple imprisonment for six more months.
Section 138 of the Negotiable Instruments Act
Michael Kuruvilla v. Joseph J. Kondody, 1998 (1) KLT 384
Babu Lal v. Kewal Chand, 2008 (1) Crimes 147 (MP)
Negotiable Instruments Act, 1881 – Ss. 9 & 138 – ‘self cheque’ – holder in due course – cheque was issued in the form of a “self cheque” – at the same time, it is a bearer cheque also, since the terms “or bearer” has not been scored off – therefore, cheque could be treated as a “bearer cheque” – therefore, when cheque is a “bearer cheque”, the possessor of the cheque for consideration can be termed as a “holder in due course”.
Negotiable Instruments Act, 1881 – Ss. 9 & 118 (g) – holder of the cheque – when it is admitted that the complainant is the holder of the cheque, the presumption under Section 118(g) of the N.I.Act is available to the complainant. It shall be presumed that the complainant being the holder of the cheque is the holder in due course within the meaning of Section 9 of the N.I. Act.
# Cheque
IN THE HIGH COURT OF KERALA AT ERNAKULAM
B. KEMAL PASHA, J.
Crl. Appeal No. 1870 of 2009
Dated this the 15th day of July, 2016
CRL.A.NO.775/2003 OF SESSIONS COURT, THALASSERY C.C.NO.351/2003 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT, THALASSERY
PETITIONER(S)/COMPLAINANT
SARAFUDHEEN
BY ADV. SRI.CIBI THOMAS
RESPONDENT(S)/ACCUSED AND STATE
T. MUHAMMED ASHRAF
R1 BY ADV. SRI.C.K.SREEJITH R2 BY PUBLIC PROSECUTOR SMT.MAYA
J U D G M E N T
Challenging the judgment of acquittal passed by the Additional Sessions Court, Thalassery, in Crl.Appeal No.775 of 2003, the complainant in the matter has come up in appeal. Crl.Appeal No.775 of 2003 of the court below was filed by the accused in C.C.No.351 of 2003 of the Additional Chief Judicial Magistrate’s Court, Thalassery.
2. The case before the trial court is as a result of a private complaint filed by the appellant herein as complainant, against the 1 st respondent herein as accused, alleging an offence punishable under
# Section 138 of the Negotiable Instruments Act
The complaint was filed through PW-1, who was the power of attorney holder of the complainant.
3. The case of the complainant is that the accused borrowed an amount of ₹2,25,000/- from the complainant on agreeing to repay the same within 6 months and when he demanded the repayment, the accused issued Exhibit-P1 cheque dated 15.09.2000, which on presentation returned dishonoured for insufficiency of funds in the accounts of the accused. The complainant caused to issue demand notice dated 09.12.2000 to the accused under Section 138(b) of the Negotiable Instruments Act. The notice returned with the endorsement, ‘out of India’.
4. The trial court recorded the evidence of PW-1 and marked Exhibits- P1 to P5. On the side of the accused, DW-1 and DW-2 were examined and Exhibits-D1 to D3 were marked. DW-1 is the accused and DW-2 is the elder brother of the accused.
5. It seems that a strange contention was taken by the appellant with regard to Exhibit-P1 cheque. It was contended that Exhibit-P1 cheque was issued by the accused to his elder brother DW-2, when DW-2 was an inpatient in a hospital, who was admitted for a surgery to his lungs. It is contended that the said cheque was stolen away by the complainant and after misusing it, the complaint was filed. Apparently, the said contention is not believable. The trial court found that the accused has committed the offence under Section 138 of the Negotiable Instruments Act, convicted him thereunder and sentenced him to undergo simple imprisonment for six months and to pay a fine of ₹2,50,000/-, in default to undergo simple imprisonment for three more months.
6. The matter was taken in appeal as aforesaid. The appellate court, through the impugned judgment, held that Exhibit-P1 is a ‘self cheque’ and therefore the complainant could not be treated as a holder in due course within the meaning of Section 9 of the Negotiable Instruments Act and therefore, the complaint as such is not maintainable.
7. The lower appellate court found that as per Section 142 of the Negotiable Instruments Act, the court could take cognizance of an offence under Section 138 of the Negotiable Instruments Act only on a complaint in writing made by the payee or a holder in due course. On the said reasoning and also by relying on a stray sentence in ExhibitD3 deposition, allegedly made by the complainant in another case that ‘there is no close acquaintance between the complainant and the accused’, the court below has chosen to pass the judgment of acquittal.
8. This is a case wherein Ext.P1 cheque was issued in the form of a “self cheque”. At the same time, it is a bearer cheque also, since the terms “or bearer” has not been scored off. Therefore, Ext.P1 cheque could be treated as a “bearer cheque”. As per Section 9 of the N.I. Act, “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, ………” Therefore, when Ext.P1 cheque is a “bearer cheque”, the possessor of the cheque for consideration can be termed as a “holder in due course”. The court below has lost sight of the fact that Ext.P1 cheque could be treated as a “bearer cheque”.
9. Apart from the above, it seems that the court below has lost sight of the presumptions available to the complainant under Section 118(g) of the N.I. Act which says that until the contrary is proved, it shall be presumed that the holder of a negotiable instrument is a holder in due course. Here, admittedly, the complainant is the holder of the cheque. According to the accused, Ext.P1 cheque was issued by him to his elder brother DW2, while DW2 was an inpatient in a hospital, and that the said cheque was stolen away by the complainant. Even in such case, there is clear admission from the part of the accused that the complainant is the holder of the cheque. Over and above it, the complainant could present the cheque before the Bank and got it dishonoured. Therefore, when it is admitted that the complainant is the holder of the cheque, the presumption under Section 118(g) of the N.I.Act is available to the complainant. It shall be presumed that the complainant being the holder of the cheque is the holder in due course within the meaning of Section 9 of the N.I. Act.
10. The learned counsel for the petitioner has invited the attention of this Court to the decision in
# Michael Kuruvilla v. Joseph J. Kondody, 1998 (1) KLT 384
wherein it was held that the non-mentioning of the payee’s name and the striking off of the words ‘or bearer’ in a cash cheque will not make the cheque invalid. It was held therein that even in such case the person who was the holder of the cheque could be a holder in due course, who could well maintain a complaint under Section 142 of the N.I.Act.
11. Here, in this particular case, the position is much better. The cheque is styled as a self cheque and over and above it, the term ‘or bearer’ has not been scored off. A similar situation as the one in this case was dealt with by the Madhya Pradesh High Court in
# Babu Lal v. Kewal Chand, 2008 (1) Crimes 147 (MP)
wherein also it was held that such a complainant who was holding such a cheque could be a holder in due course, who could maintain a complainant under Section 142 of the N.I. Act.
12. From all the above, it has clearly come out that the lower appellate court has committed a grave error in passing the judgment of acquittal by reversing the judgment passed by the trial court. The impugned judgment of the lower appellate court is liable to be set aside and the conviction entered by the trial court is only to be maintained. Regarding the sentence, this Court is of the view that when so much time has been elapsed, interest of justice demands the reduction in sentence of imprisonment. This Court is of the view that a sentence of imprisonment till the rising of the court and to pay a fine of ₹25,000/-, in default, to undergo simple imprisonment for six months, will meet the ends of justice in this case.
In the result, this Appeal is allowed and the impugned judgment of the lower appellate court is set aside. The conviction passed by the trial court is maintained. The sentence imposed by the trial court is modified as follows: The accused is sentenced to undergo imprisonment till the rising of the court and to pay a fine of ₹25,000/- within three months from today, in default, to undergo simple imprisonment for six more months.
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