Accused in S.T.C.No.12533/2008 on the file of the Judicial First Class Magistrate Court, No-III, Kannur is the revision petitioner herein.
2. The case was taken on file on the basis of a private complaint filed by the first respondent – firm against the revision petitioner alleging offence under Section 138 of the Negotiable Instruments Act (hereinafter called 'the Act').
3. The case of the complainant in the complaint was that the revision petitioner and one Rajendran purchased Electrical items from the complainant - firm for and on behalf of M/s.Goodway business corporation and M/s.Goodway Shopping Mall India Ltd for an amount of Rs.3,55,270/- on credit basis and an amount of Rs.2,55,270/- was due to the complainant in that transaction and in discharge of that liability, the revision petitioner has undertaken to pay the amount and issued Ext.P3 cheque in favour of the complainant. The cheque when presented was dishonoured for the reason 'funds insufficient' evidenced by Ext.P4 dishonour memo. The complainant issued Ext.P5 notice vide Ext.P6 postal receipt and the same was received by the revision petitioner evidenced by Ext.P7 postal acknowledgment. The revision petitioner issued Ext.P8 reply notice. But, he had not paid the amount. So, he had committed the offence punishable under Section 138 of the Act. Hence the complaint.
4. When the revision petitioner appeared before the court below, the particulars of offence were read over and explained to him and he pleaded not guilty. In order to prove the case of the complainant, the complainant himself was examined as PW1 and Exts.P1 to P8 and X1 series were marked on his side. After closure of the complainant's evidence, the revision petitioner was questioned under Section 313 of Code of Criminal Procedure and he denied all the incriminating circumstances brought against him in the complainant's evidence. He had further stated that he had purchased the goods for and on behalf of the companies mentioned in the complaint and there is no personal liability and the cheque was issued as a security for payment of that amount. In order to prove his case, DWs 1 and 2 were examined.
5. After considering the evidence on record, the court below found that since the amount was not paid by the companies mentioned, the revision petitioner had issued the cheque in his personal capacity undertaking to pay the amount and so, the offence under Section 138 is attracted against him and convicted him thereunder and sentenced him to undergo simple imprisonment for three months and also to pay the cheque amount of Rs.2,55,270/- as compensation to the complainant in default to undergo simple imprisonment for three months under Section 357(3) of Code of Criminal Procedure. He filed Crl.Appeal.No.353/2011 before the Sessions Court, Thalassery which was made over to Additional Sessions Court, Adhoc No-I, Thalassery for disposal and the learned Additional Sessions Judge allowed the appeal in part confirming the order of conviction and direction to pay compensation with default sentence, but, reduced the substantive sentence to simple imprisonment for one month. Aggrieved by the same, the present revision has been filed.
6. Since the respondent had appeared in the delay condonation application through Counsel and expressed his willingness to appear in the revision also, this court felt that the revision can be admitted and disposed of on merit after hearing both sides. So, the revision is admitted and heard and disposed of on merit today itself.
7. The Counsel for the revision petitioner submitted that even as per the allegations in the complaint, the articles were purchased for an on behalf of two companies mentioned therein namely, M/s.Goodway business corporation and M/s.Goodway Shopping Mall India Ltd and the revision petitioner is only an employee of that concern and he had given the cheque as security and the amount ought to have been recovered from the company and not from the revision petitioner. So, he had rebutted the presumption. Further, the sentence imposed is harsh.
8. On the other hand, the Counsel for the first respondent submitted that the cheque was issued in his personal capacity undertaking to pay the amount and the revision petitioner had no case that the company had paid the amount also. So, even if the cheque was issued as a security, if the amount was not realised, then, that can be enforced against the revision petitioner as that can be treated as cheque issued in discharge of that liability which has been undertaken by the revision petitioner. So, according to him, the courts below were perfectly justified in convicting the revision petitioner for the offence alleged.
9. The case of the complainant in the complaint was that the revision petitioner and one Rajendran had purchased articles worth Rs.3,55,270/- on credit basis from the complainant concern for and on behalf of M/s.Goodway business corporation and M/s.Goodway shopping Mall India Ltd and an amount of Rs.2,55,270/- was due in that account and in discharge of that liability, the revision petitioner had issued his personal cheque. The case of the revision petitioner was that, he was only an employee of the above two companies and as a security for the payment of the amount by the companies, he had given his cheque at the time when the articles were purchased. It is true that DWs 1 and 2 were examined on the side of the revision petitioner. The fact that the revision petitioner purchased the articles and issued the cheque is not in dispute. It is also not in dispute that he had purchased the articles for the above mentioned two concerns namely, M/s. Good way business corporation and M/s.Goodway Shopping Mall India Ltd. But, the revision petitioner had undertaken the liability and issued Ext.P3 cheque. This was admitted by him in his reply notice as well as at the time when he was examined as DW1 also. Further, once it is admitted by him that the cheque was issued as a security for the transaction of another undertaking to secure the performance of the person on whose behalf the cheque was given, then, the burden is on the revision petitioner to prove that the person on whose behalf the cheque was issued as security has discharged the liability and there was no amount due from that person. But, no such evidence was adduced on the side of the revision petitioner to prove that fact. It is settled law that if a person has issued a cheque as a guarantor for the liability of another person, then, he can be proceeded against under Section 138 of the Act if the person on whose behalf he stood as surety had not discharged his liability. So, under the circumstances, even assuming that the case of the revision petitioner is accepted as true that the cheque was issued as security for payment of the amount for another, in the absence of any evidence adduced on the side of the revision petitioner to prove that, that liability has been discharged by the principal debtor on whose behalf he had issued the cheque as security, his liability to pay the amount will not be exonerated and if that cheque is dishonoured and he did not pay the amount, then, he can be proceeded against under Section 138 of the Act. So, the courts below were perfectly justified in convicting the revision petitioner for the offence under Section 138 of the Act and the concurrent findings of the court below on this aspect do not call for any interference.
10. As regards the sentence is concerned, the trial court had sentenced him to undergo simple imprisonment for three months and also to pay the cheque amount of Rs.2,55,270/- as compensation to the complainant in default to undergo simple imprisonment for three months under Section 357(3) of Code of Criminal Procedure. The appellate court had though confirmed the compensation portion with default sentence, modified the substantive sentence to simple imprisonment for one month.
11. In the decision reported in Damodar S. Prabhu Vs. Sayed Babalal H. [JT 2010 (4) SC 457] and Kaushalya Devi Massand Vs. Roopkishore [AIR 2011 SC 2566], the Hon'ble Supreme Court has held that the offence under Section 138 of the Act is primarily of civil nature, but, a criminal colour has been given to the Act of issuing cheque by incorporating the provision in the Negotiable Instruments Act. Further, the intention of the legislature is not to send the drawer of the cheque to jail, but, make him to pay the amount. Further, in the decision reported in Somnath Sarkar Vs. Utpal Basu Mallick [2013 (4) KLT 350 (SC)], the Hon'ble Supreme Court has held that court has no power to award compensation for the offence under Section 138 of the Act, but, court has got power to impose double the cheque amount as fine and if the fine amount is quantified, compensation can be awarded out of the fine amount invoking the power under Section 357(1)(b) of Code of Criminal Procedure. So, considering the circumstances, this court feels that the compensation can be converted to fine to the tune of Rs.2,60,000/- and the default sentence of three months can be retained and the substantive sentence can be reduced to imprisonment till rising of court and directing the fine amount if realised to be payable to the complainant as compensation under Section 357(1)(b) of Code of Criminal Procedure will be sufficient and that will meet the ends of justice as far as both the parties are concerned. So, the sentence imposed by the court below and modified by the appellate court is set aside and modified as follows:
The revision petitioner is sentenced to undergo imprisonment till rising of court and also to pay a fine of Rs.2,60,000/- in default to undergo simple imprisonment for three months. If the fine amount is realised, the same be paid to the complainant as compensation under Section 357(1)(b) of Code of Criminal Procedure.
12. The Counsel for the revision petitioner prayed for six months time to pay the amount. Considering the amount involved, this court feels that the same can be granted. So, the revision petitioner is granted time till 19.06.2015 to pay the amount. Till then, the execution of sentence is directed to be kept in abeyance.
With the above modification of the sentence alone, the revision petition is allowed in part and disposed of accordingly.
Office is directed to communicate this order to the concerned court immediately.
Sd/-
K.Ramakrishnan, Judge.
Bb [True copy] P.A to Judge