High Court of KeralaSingle Judge2019-11-16Petition dismissed; proceedings to continue in ...

Neetha Kotian v. K. Sathish & State of Kerala

Case / Petition Number:Crl.M.C.No.7923 of 2019 (A)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: R. Narayana Pisharadi
(no other judges listed)
Judgment Date: 2019-11-16
Court Decision / Holding: The petition is dismissed; no ground is found to quash the proceedings in STC 527/2019, and the matter shall continue in the trial court.
Final Disposition: Petition dismissed; proceedings to continue in STC 527/2019.

Parties to the Case

Appellants / Petitioners

Neetha Kotian

Respondents

K. Sathish
State of Kerala

Legal Representation & Advocates

Counsels for Petitioners

• P. Ramakrishnan
• V. V. Nandagopal Nambiar
• Smitha (Ezhupunna)
• Dheeraj Krishnan Perot
• Chitra Johnson

Case Synopsis & Summary

This is a criminal miscellaneous petition under Section 482 Cr.P.C filed by the accused, Neetha Kotian, seeking to quash proceedings in STC 527/2019 of the Chief Judicial Magistrate, Kalpetta, arising under Section 138 of the Negotiable Instruments Act, 1881. The complainant, K. Sathish, alleges that the accused and her husband, proprietors of J.P. Lighting & Interiors, induced him to invest money for travel and purchase of interior goods with assurances of cheaper supply from China. Funds totaling Rs. 9,73,170 were allegedly transferred, including Rs. 2,79,600 for travel and Rs. 2,50,000 for service charges, but the promised articles were not supplied. The accused issued a cheque dated 30.12.2018 for Rs. 9,73,170 to repay the funds and it was dishonoured for “payment stopped by drawer” after the complainant served notice demanding payment. The accused contends that the complaint does not disclose a legally enforceable debt, and also raises defences such as coercion and payments to third parties. The High Court notes that Section 138 requires five ingredients plus a 15-day payment window after a notice; it acknowledges the presumption under Section 139 that the cheque is issued in discharge of a legally enforceable debt, but holds that disputed facts and defences to be proved at trial. On the basis of precedents cited, the court declines to quash and dismisses the petition, allowing the Nik to proceed.

Provisions of Law Cited

Section 138 of the Negotiable Instruments Act, 1881Section 139 of the Negotiable Instruments Act, 1881Section 482 Cr.P.C.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that Annexure-A1 does not attract the ingredients of Section 138 NI Act since the cheque was not issued in discharge of any legally enforceable debt. It is argued that the accused’s defence—claims of coercion, disputes about the destination of funds, and reliance on payments to third parties—raises disputed questions of fact which cannot be decided at the 482 Cr.P.C. stage and must be adjudicated at trial. The plea that the complainant’s funds were not used for a legally enforceable debt is to be proved during trial, not at this stage. The accused maintains that the cheque’s issuance was not in discharge of a debt, and any such evidence should be explored in the trial court.

Contentions of Respondents

The respondents submit that the complaint discloses all essential ingredients for an offence under Section 138 NI Act: a drawn cheque, its dishonour for payment stopped by the drawer, notice of demand, and failure to pay within 15 days of receipt of notice. The law presumes issuance in discharge of a legally enforceable debt, under Section 139 NI Act, unless disproved; the defence that the debt belonged to another person or that the money was for travel arrangements is a matter to be established at trial. In view of these prima facie facts, the petition under Section 482 Cr.P.C. cannot be allowed to quash the proceedings.

Cited Precedents (7)

Case Name	Citation	Treatment	Explanation
Harihara Krishnan v. Thomas	AIR 2017 SC 4125	Positive	Cited to establish the ingredients for Section 138 offence and the 15-day period after notice.
Anil Sachar v. M/s Sree Nath Spinners	AIR 2011 SC 2751	Positive	Cited to support that a cheque drawn by one person to discharge debt owed by another can come within Section 138.
Alexander v. Joseph Chacko	1993 (2) KLT 326	Positive	Cited in the context of interpreting Section 138 eligibility.
Komalam v. Mohanakumar	2009 (3) KHC 269 : 2009 (3) KLT 263	Positive	Cited for debt/cheque liability interpretation under NI Act.
Gopi v. Sudarshanan	2002 KHC 479 : 2002 (2) KLT 606	Positive	Cited for interpretation of cheque liability.
Alex P.Oommen v. K.S.F.D.C	2012 (4) KHC 126	Positive	Cited to support debt-affirming interpretation under NI Act.
HMT Watches Ltd v. M.A. Abida	(2015) 11 SCC 776	Positive	Cited to state that disputed factual defences cannot be decided at the 482 stage and are to be tested at trial.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI** **SATURDAY, THE 16TH DAY OF NOVEMBER 2019 / 25TH KARTHIKA, 1941** ## **Crl.MC.No.7923 OF 2019(A)** **AGAINST THE PROCEEDINGS IN STC 527/2019 OF CHIEF JUDICIAL MAGISTRATE, KALEPETTA** ## **PETITIONER/ACCUSED:** **NEETHA KOTIAN, AGED 49 YEARS W/O.PRAVIN MANEZES, J.P.LIGHTING AND INTERIORS, VASUDEVA COMPLEX, KARINGALPADY POST, MANGLORE, KARNATAKA- 6575003.** **BY ADVS. SRI.P.RAMAKRISHNAN SRI.V.V.NANDAGOPAL NAMBIAR SMT.SMITHA (EZHUPUNNA) SRI.DHEERAJ KRISHNAN PEROT SMT.CHITRA JOHNSON** ## **RESPONDENTS/COMPLAINANT & STATE:** **1 K.SATHISH, AGED 50 YEARS S/O.SREEDHARAN, SREE NILAYAM, VIDYA NAGAR, NEAR KSRTC DEPOT, KALPETTA P.O., VYTHIRY TALUK, WAYANAD DISTRICT.** - **2 STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM- 682031.** **THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 13.11.2019, THE COURT ON 16.11.2019 PASSED THE FOLLOWING:** Crl.M.C.No.7923/2019 2 ## **R.NARAYANA PISHARADI, J** ************************ Crl.M.C.No.7923 of 2019 ------------------------------------------------Dated this the 16[th] day of November, 2019 ## **O R D E R** The petitioner is the accused in the case S.T.No.527/2019 on the file of the Court of the Chief Judicial Magistrate, Kalpetta. 2. The aforesaid case was instituted on the basis of the complaint (Annexure-A1) filed by the first respondent under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act'). This petition is filed under Section 482 Cr.P.C by the accused for quashing the proceedings against her in the case. 3. The material averments in Annexure-A1 complaint are the following: The complainant was constructing a building at Kalpetta. The accused and her husband are the proprietors of the shop “J.P.Lighting & Interiors” at Mangalore. During the first week of September, 2017 the complainant visited the shop of the accused for purchasing light and interior design materials for his Crl.M.C.No.7923/2019 3 newly constructed building in Kalpetta. The accused and her husband made the complainant to believe that the materials wanted by him would be obtained at a cheaper price in China. They made representation to the complainant that they had business dealings in China. The husband of the accused instructed the complainant to transfer an amount of Rs.9,73,170/- to the bank account maintained in the name of FRAMROZE towards travel and insurance for three persons to visit China. The complainant transferred Rs.2,79,600/- to Varsha Travels towards the flight tickets, food and accommodation for three persons and Rs.2,50,000/- to Sofa Classics, Mangalore towards the service charges of the husband of the accused. Thereafter, the complainant and his relatives visited China. Since the price of the articles was high and they were not up to his satisfaction, the complainant did not purchase the articles from China. Then the husband of the accused told the complainant that the articles required would be supplied from the shop at Mangalore. However, the articles were not supplied to the complainant. On repeated demands made by the complainant for return of the amount, the accused issued a cheque dated Crl.M.C.No.7923/2019 4 30.12.2018 for Rs.9,73,170/- to the complainant on 24.12.2018 for returning the amount given for travel insurance. The accused executed the cheque, signed it and delivered it to the complainant at her shop at Mangalore. The complainant presented the cheque in the bank. It was dishonoured for the reason that payment was stopped by the drawer. The complainant issued notice to the accused demanding payment of the amount of the cheque. The accused received the notice. She sent a reply raising false contentions. She did not pay the amount of the cheque. 4. Heard learned counsel for the petitioner. 5. Learned counsel for the petitioner has contended that the averments in Annexure-A1 complaint do not attract the ingredients of an offence punishable under Section 138 of the Act for the reason that the cheque was issued not in discharge of any legally enforceable debt. 6. The prosecution for an offence under Section 138 of the Act is initiated on the basis of a written complaint made by the payee of a cheque. Obviously such complaints must contain the factual allegations on the following aspects: (1) that a person Crl.M.C.No.7923/2019 5 drew a cheque on an account maintained by him with the banker; (2) that such a cheque when presented to the bank is returned by the bank unpaid; (3) that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier; (4) that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; and (5) such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. The only other ingredient which is required to be proved to establish the commission of an offence under Section 138 of the Act is that inspite of the demand notice referred to above, the drawer of the cheque failed to make the payment within a period of 15 days from the date of the receipt of the demand (See **Harihara Krishnan v. Thomas: AIR 2017 SC 4125** ). 7. On a perusal of Annexure-A1 complaint, it can be found that it contains all necessary facts constituting the ingredients of an offence punishable under Section 138 of the Crl.M.C.No.7923/2019 6 Act. Once the cheque is executed and delivered to another person, the presumption under Section 139 of the Act arises that it was issued in discharge of a legally enforceable debt. The plea of the accused that, there was no legally enforceable debt, cannot be considered at this stage. It is a matter to be proved by the accused during the trial of the case. 8. The petitioner has got a plea that the cheque was executed and delivered by her to the complainant under threat and coercion. Such factual disputes raised by the accused cannot be considered and decided by this Court in a petition filed under Section 482 Cr.P.C. 9. The cheque was dishonoured for the reason that payment was stopped by drawer. A plea is raised by the petitioner that there was sufficient amount in her account but payment was stopped for genuine and bona fide reasons. This is also a plea to be proved by her during the trial of the case. 10. Yet another plea raised by the petitioner is that the complainant had transferred the amount to FRAMROZE and that he had not paid any amount to the accused. Cheque drawn and issued by a person to the complainant, in discharge of the debt Crl.M.C.No.7923/2019 7 owed by another person to the complainant, comes within the purview of Section 138 of the Act (See **Anil Sachar v. M/s Sree Nath Spinners : AIR 2011 SC 2751, Alexander v. Joseph Chacko : 1993 (2) KLT 326** , **Komalam v. Mohanakumar: 2009 (3) KHC 269 : 2009 (3) KLT 263, Gopi v. Sudarshanan: 2002 KHC 479 : 2002 (2) KLT 606** and **Alex P.Oommen v. K.S.F.D.C : 2012 (4) KHC 126)** . 11. Disputed factual defences of the accused cannot be considered and decided in a petition under Section 482 Cr.P.C. Such defences, if taken before trial court, after recording of the evidence, can be better appreciated (See **HMT Watches Ltd v. M.A. Abida : (2015) 11 SCC 776** ). 12. In the aforesaid circumstances, I find that there is no sufficient ground to quash the proceedings against the petitioner in the case. The petition is liable to be dismissed. Consequently, the petition is dismissed. (sd/-) ## **R.NARAYANA PISHARADI, JUDGE** jsr/15/11/2019 Crl.M.C.No.7923/2019 8 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **ANNEXURE A1 TRUE COPY OF THE COMPLAINT IN STC NO.527/2019 DATED 21.06.2019.** **ANNEXURE A2 A TRUE COPY OF THE DETAILS RELATING TO THE ATM WITHDRAWAL MADE BY THE 1ST RESPONDENT.** - **ANNEXURE A3 A TRUE COPY OF THE DETAILS RELATING TO THE ATM WITHDRAWAL MADE BY RAVINDRANATH.** - **ANNEXURE A4 A TRUE COPY OF THE DETAILS RELATING TO THE ATM WITHDRAWAL MADE BY SREENIVASA RAO.** - **ANNEXURE A5 TRUE COPY OF STATEMENT OF ACCOUNTS MAINTAINED BY YES BANK MANGALORE MAINTAINED IN THE NAME OF THE PETITIONER FOR THE PERIOD FROM 25.03.2019 TO 01.04.2019.** - **ANNEXURE A6 TRUE COPY OF LAWYER NOTICE DATED 06.05.2019.** - **ANNEXURE A7 TRUE COPY OF REPLY TO LAWYER NOTICE DATED 17.05.2019.** - **ANNEXURE A8 TRUE COPY OF COMPLAINT FILED BEFORE CHIEF JUDICIAL MAGISTRATE'S COURT, MANGALORE.** ## **RESPONDENTS' EXHIBITS: NIL** **TRUE COPY** **PS TO JUDGE**