Ramachandran Nair vs James

M.N. Krishnan, J.—This appeal is preferred against the judgment passed by the II Addl.District Judge, Kollam in Crl.A. No. 214 of 1998. It is the case of the complainant that the accused had borrowed a sum of Rs. 55,000/- from him and had issued a cheque towards the discharge of liability which when presented for encashment, returned with the endorsement ''insufficiency of funds''. It is the case that the cheque was presented firstly on 12.5.1995, secondly on 18.7.1995 and lastly on 1.11.1995. According to the complainant, when the cheque was returned for insufficiency of funds, on 1.11.1995 statutory notice was issued and action was initiated.

In the trial court, Pws 1 to 3 were examined and Exts.P1 to P6 were marked. The trial court found the accused guilty u/s 138 of the Negotiable Instruments Act and sentenced to undergo simple imprisonment for a period of one year and to pay a fine of Rs. 3,000/- with default sentence of 3 months.

Against the said conviction and sentence, the accused preferred Crl.A. No. 214 of 1998. The appellate court came to the conclusion that the cause of action to initiate the prosecution has started immediately after the issuance of the first notice and therefore the initiation of action, which according to the lower appellate court is after the 3rd notice is illegal and therefore prosecution will not lie.

There cannot be any quarrel if notice is issued, the question of representing the cheque again may not arise at all and the complaint has to be filed within the statutory period. But, it will be otherwise if the cheque when dis-honoured is represented once or twice and finally a notice is issued. So, the crucial question to be considered in this case is whether the issuance of notice described in the complaint is the notice by virtue of which the action has been initiated for launching the prosecution u/s 138 of the NI Act.

Admittedly, the cheque has been presented on 12.5.1995 and 18.7.1995. It is the case of the complainant that when the cheque was dis- honoured, he contacted the accused and at his request he waited and represented the cheque for encashment. Ultimately when he presented the cheque on 1.11.1995 and it was returned, then only he had issued a lawyer notice with the intention to prosecute the proceedings. I had gone through the evidence of PW1 in this case. PW1 has nowhere stated that he had issued three notices in the chief examination. He had stated that on 2.5.1995 he had sent the cheque for collection and when it was returned, at the request of the accused he had again presented the cheque and when it was returned as the accused requested for a period of 3 months he presented it on 1.11.1995 and when that was returned he initiated action. I think the appellate court has fallen in error in misquoting the evidence to arrive at a decision that notices had been sent on three occasions. What is stated by the witness is as follows: Ext.P1 cheque 3 times bank notice...notice....". By no stretch of imagination one can state that PW1 has stated that he had issued three notices. What he had stated is that he had presented the cheque thrice and subsequently had issued notice. So this misreading had resulted in gross injustice.

So far as the trial court is concerned, it has analysed the evidence in the proper perspective to arrive at a decision. Therefore the finding of the appellate court that the action cannot be launched as per the present notice is unsustainable which is liable to be set aside and I do so. So far as the notice is concerned, it was properly addressed and it was tendered and intimation was given, but he did not collect it and so it was unclaimed. It is proper service of notice as contemplated under law. Therefore there is no defective notice. The complaint has been launched within the statutory period and therefore there is no legal defect in launching the prosecution.

So far as the facts are concerned, issuance of cheque has been proved and it is also stated that it is towards the discharge of liability and when it was presented for encashment, it was returned with the endorsement insufficiency of funds, which also satisfies the necessary ingredients to constitute the offence u/s 138. Therefore I find that the appellate court had grossly erred in reversing the decision of the trial Judge and therefore the judgment passed by the appellate court in Crl.A. No. 214 of 1998 is set aside and I uphold the finding of guilt rendered by the learned Magistrate.

Now we will come to the question of sentence. The transaction is of the year 1995 and the trial court had directed the accused to undergo simple imprisonment for a period of one year and to pay a fine of Rs. 3,000/-. I find that it is on the higher side. I think if really the accused wants to wipe off the liability, some leniency can be shown. Interest of justice will be served if he is directed to undergo imprisonment till the raising of the court and to pay a fine of Rs. 70,000/- which on realisation shall be disbursed to the complainant.

In the result, the appeal is allowed. The accused is found guilty u/s 138 of the NI Act. He is convicted and sentenced to undergo imprisonment till the raising of the court and to pay a fine of Rs. 70,000/- which on realisation shall be disbursed to the complainant. In default, he shall undergo simple imprisonment for 2 months. The accused is directed to appear before the trial court to receive the sentence on 12.8.2009. In case of default the trial court shall execute the sentence.