Kerala High Court
A.C. Raj vs M. Rajan And Anr. on 6 December, 1996
Equivalent citations: 1997CRILJ1939
JUDGMENT G. Rajasekharan, J.
1. An appeal by special leave against acquittal.
2. The appellant preferred a complaint against the first respondent under Section 142 of the Negotiable Instruments Act, 1881 (for short 'the Act'), alleging an offence under Section 138 of the Act. The trial court by its judgment dated 31-12-1991 entered conviction, sentenced the accused to undergo rigorous imprisonment for one year and directed the accused to pay the complainant a sum of Rs. 40,000/- being the cheque amount with six per cent interest, with the default clause to undergo rigorous imprisonment for a further period of six months. A sum of Rs. 500/- as costs was also awarded.
3. Against that conviction and sentence, the accused preferred an appeal before the Sessions Court, and in the appeal, the conviction and sentence were set aside and the accused acquitted. It is against that acquittal this appeal on special leave is preferred.
4. The complaint was that the first respondent for consideration issued a cheque for Rs. 40,000 / - on 9-1-1991, that the said cheque was presented for collection on 11-1-1991, that the same was dishonoured with the endorsement "refer to drawer", that the dishonour was due to insufficiency of funds, that the necessary notice demanding payment was issued, that there was failure to pay the amount and hence the complaint.
5. Since it is an appeal against acquittal, the matter has to be considered with all the restraints in intefering with acquittals.
6. The evidence in the case consists of PW1, the complainant and Exts.P1 to P4. The Appellate Court was of the view that the endorsement "refer to drawer" does not necessarily mean that there was no sufficient funds to honour the cheque, and that the complainant has failed to adduce reliable evidence to prove that the dishonour of the cheque was due to insufficiency of funds in that account.
7. Ext.P2 is the memo returning the cheque. It is in a printed form, showing twentythree reasons and leaving two columns blank for entering any other reason for returning the cheque. The first reason is 'refer to drawer'. It is for that reason, the cheque in question was returned. There are other reasons, like 'not arranged for', 'ful cover not received', 'exceeds arrangement' etc. As mentioned earlier, there could be other reasons also than the twentythree reasons printed, and for entering such reason, space is left. If actually there was no sufficient funds, the reason for return could be noted as 'not arranged for', 'exceeds arrangement' or 'full cover not received'. But here, the reason for return was 'refer to drawer'. This Court has ruled in more than one case that the endorsement 'refer to drawer' could mean many reasons including the reason that there was no sufficient fund for honouring the cheque. So, in this particular case, for the complainant to succeed in entering conviction, he has to prove that the endorsement "refer to drawer" in Ext.P2 meant that there was no sufficient fund for honouring the cheque. In that line, the only evidence is the oral testimony of PW1. As indicated earlier, in the complaint it is mentioned that the reason for return of the cheque was insufficiency of funds. The same is repeated in the oral testimony also. The fact that there was no sufficient fund, was one capable of being proved by the examination of the Manager of the Bank or any official of the bank, and production of documents relating to the account maintained by the drawer. Those are items of (best) evidence in the circumstances, to prove that there was no sufficient fund when the cheque was presented and returned.
8. It appears that the complainant was shunning any such items of evidence. In the judgment of the lower appellate Court, it is noticed that at the bar a remand of the cask was suggested, but the complainant was resisting that, and in the argument notes presented by the counsel for the complainant it was specifically stated that a remand will not serve any purpose and there may not be any more evidence in the matter. That indicates the reluctance of the complainant in bringing in better evidence or proper evidence to prove that there was insufficiency of funds at the relevant time by examining the bank officials or causing production of the relevant documents. That creates serious suspicion as to the assertion of the complainant that the cheque was returned for the reason that there was no sufficient fund. As mentioned earlier, the memo from the bank does not say that the cheque was returned for want of funds.
9. Considering the question in the above background, the lower appellate court cannot be faulted in arriving at the conclusion that the complainant has failed to establish that there was no sufficient fund and for that reason, the cheque was dishonoured.
10. The cheque was dishonoured for want of sufficient funds or that the cheque exceeded the amount arranged to be paid from that account by an agreement made with the bank, is the main ingredient for constituting the offence under Section 138 of the Act. When either of the conditions was not established, the only conclusion could be that the complainant has failed in proving the guilt of the accused. In the circumstances the finding entered by the lower appellate Court in acquitting the accused is not liable to be interfered with.
11. There is another reason also which justifies the acquittal. Ext. P 3 is the office copy of the notice contemplated by proviso (b) to Section 138. There, payment was demanded not only of the amount covered by the cheque but also interest thereon without specifying the irate of interest. The learned counsel for the respondent would urge that such a notice is an insufficient notice or a notice which cannot be treated as legal under proviso (b) to Section 138. In support of this contention, reliance was placed on the decision reported in (1996) 2 Ker LT 886 (Gopa Devi Ozha v. Sujit Paul). The decision was rendered by the High Court of Calcutta. There, the amount covered by the cheque was Rs. 5,79,000/- and the amount claimed under the notice was Rs. 6.50,000/-. In considering the legality and sufficiency of that notice, that court held that the words "the said amount" in proviso (b) to Section 138 and identical words in proviso (c) to that Section would necessarily indicate that the notice must be one demanding the amount covered by the cheque and nothing more or nothing less. According to that court, a notice claiming a higher amount or a lesser amount makes the notice insufficient and vague, and such a notice will be illegal. I do not see any reason to disagree with the learned Judge who rendered the above said decision.
12. In the case at hand, the amount covered by the cheque is Rs. 40,000/- But in the notice, it was not the said amount which was claimed, but that amount together with interest without specifying the amount of interest or the rate of interest. That certainly makes the notice vague and insufficient. It cannot be treated as a notice as contemplated by proviso (b) to Section 138 of the Act. In the circumstances, for want of a proper and legal notice also, the acquittal is sustainable.
13. As pointed out earlier, on the merits of the case, there is lack of evidence or no evidence in establishing that the cheque was returned unpaid for want of sufficient funds. The acquittal is only to be sustained.
The Appeal has no merits and it fails. Hence Dismissed.