2007(5) ALL MR (JOURNAL) 22
(KERALA HIGH COURT)
R. BASANT, J.
Ramakrishnan Vs. Gangadharan Nair & Anr.
Crl. Revn.No.2622 of 2006
8th August, 2006
Petitioner Counsel: P. CHANDASEKHAR
Respondent Counsel: C. P. SAJI
(A) Negotiable Instruments Act (1881) Ss.138, 46 - Dishonour of cheque - Time barred debt - Cheque issued for discharge of - Is not bad for want of consideration under S.25(3) of contract Act - Hence it would fall within purview of S.138. (Para 8)
(B) Negotiable Instruments Act (1881), S.138 - Dishonour of cheque - Sentence - Cheque for Rs.3 lakhs dishonoured - Compensation at Rs.3.5 lakhs is not excessive - Sentence of 6 months imprisonment, however, reduced to imprisonment till rising of court. (Paras 10, 12)
Ramakrishnan Vs. Parthasaradhy, 2003(2) Ker LT 613 [Para 1,4,5,8]
Commr. of Income Tax Vs. M/s. Ogale Glass Works Ltd., AIR 1954 SC 429 [Para 6]
Chacko Varkey Vs. Thommen Thomas, 1957 Ker LT 870 [Para 6]
Ramachandran Vs. Velayudhan, 1986 KLT 647 [Para 6]
Food Corporation of India Vs. Assam State Co-op. Marketing & Consumer Federation Ltd., (2004)12 SCC 360 [Para 6]
Anilkumar Vs. Shammy, 2002(3) Ker LT 852 [Para 10]
JUDGMENT :- Does the decision in Ramakrishnan Vs. Parthasaradhy, 2003(2) Ker LT 613 deserve reconsideration? This is the question raised in this revision petition, which is directed against a concurrent verdict of guilty, conviction and sentence in a prosecution under Section 138 of the N.I. Act.
2. The cheque is for an amount of Rs.3.00,000/- and bears the date 19-3-1999. Signature in the cheque is admitted. Handing over of the cheque is not disputed. The short relevant contention raised is that the cheque was issued not for the discharge of any legally enforceable debt/liability. The liability, which is claimed to be discharged, is one that was barred under the law of limitation on the date of the cheque. The complainant examined himself as P.W.1 and proved Exts.P-1 to P-6. The accused examined himself as D.W.1
3. The Courts below concurrently came to the conclusion that all ingredients of the offence punishable under Section 138 of the N.I. Act have been established and that the petitioner has not succeeded in establishing the defence urged by him. Accordingly they proceeded to pass the impugned concurrent judgments.
4. Called upon to explain the nature of challenge which the petitioner wants to mount against the impugned concurrent judgments, the learned counsel for the petitioner fairly concedes that under the law as it stands now, a cheque issued for the discharge of a time-barred debt, will have to be held to fall within the purview of Section 138 of the N.I. Act. The short contention raised by the learned counsel for the petitioner is that the decision of the Division Bench in Ramakrishnan Vs. Parthasaradhy (2003(2) Ker LT 613) requires reconsideration. The learned counsel submits that there cannot be acknowledgment of a barred liability under Section 18 of the Limitation Act and inasmuch as the cheque in question is issued long after the efflux of period of limitation, it cannot be held to be one issued for the discharge of a legally enforceable debt/liability.
5. This precise question was considered by the Division Bench on a reference in Ramakrishnan's case (supra). The Division Bench, relying on the provisions of Section 25(3) of the Indian Contract Act and Section 46 of the N. I. Act had come to the conclusion that the cheque drawn for the dis-charge of time barred liability would still fall within the purview of Section 138 of the N.I. Act.
6. The learned counsel for the petitioner submits that the precise question as to whether such an acknowledgment can be reckoned as a valid acknowledgment under Section 18 of the Limitation Act in the light of the decisions in Commr. of Income Tax Vs. M/s. Ogale Glass Works Ltd. (AIR 1954 SC 429); Chacko Varkey Vs. Thommen Thomas (1957 Ker LT 870; Ramachandran Vs. Velayudhan (1986 KLT 647) and Food Corporation of India Vs. Assam State Co-op. Marketing & Consumer Federation Ltd. (2004)12 SCC 360, was not specifically considered by the Division Bench and in these circumstances the said decision may require reconsideration.
7. I have considered the submissions. I am unable to agree with the learned counsel. It is evident that the decision of the Division Bench does not rest on the interpretation of Section 18 of the Limitation Act. Their Lordships had clearly held that a promise to pay time-barred debt cannot be assailed as an unenforceable promise on the ground that there is no consideration and the cheque issued for the discharge of such a liability would fall within the sweep of Section 138 of the N.I. Act.
8. I shall assume that the liability, to discharge which the cheque is issued, is time-barred. But even then the drawing of a cheque involves the acts of writing the cheque, signing the same and delivering the same. The act of drawal of the cheque - Section 138 applies to a cheque drawn only does include writing the cheque, signing the same and delivery of the written and signed cheque. By the time the third conduct of delivery takes place and the drawal of the cheque becomes complete, there is significantly a promise in writing to discharge the time-barred liability which squarely bring the case within the purview of Section 25(3) of the Contract Act. It is thereafter that the delivery of the cheque takes place and the drawal becomes complete attracting the play of Section 138 of the N.I. Act. The Division Bench had considered this aspect elaborately in paragraphs 11 to 19 in Ramakrishnan's case (supra). I am not, in these circumstances, persuaded to doubt any aspect in the decision in Ramakrishnan's case and consequently refer the matter for consideration to a larger Bench. The dictum in Ramakrishnan is not founded on any acknowledgment under Section 18 of the Limitation Act. It is founded on the reasoning that a promise in writing to pay an amount, the consideration of which is a time-barred liability, is valid and is not bad for want of consideration under Section 25(3) of the Contract Act. Before the act of drawing the cheque becomes complete by delivery of the cheque as insisted by Section 46 or the N.I. Act, there is a valid promise in writing (in the cheque) to pay such amount. When the cheque is delivered it must hence be held to be for the discharge of a legally enforceable debt or liability. Inasmuch as the decision by the Division Bench does not rest on any acknowledgment under Section 18 or the Limitation Act, the precedents referred to above in paragraph 6 cannot persuade this Court to hold that there is any conflict between the dictum in Ramakrishnan and those decisions. The challenge raised on merits must, in these circumstances, fail.
9. The only other contention raised by the learned counsel for the petitioner is that the sentence imposed is excessive. The petitioner now faces a sentence of S.I. for six months and to pay an amount of Rs.3.5 lakhs as compensation and in default to undergo S.I. for a period of six months. The learned counsel submits that the substantive sentence of imprisonment imposed is unnecessarily and perversely harsh. The quantum or compensation directed to be paid is excessive. The default sentence is excessive and illegal in the light of Section 30, Cr.P.C., contends the counsel.
10. I have already adverted to the principles governing imposition of sentence in a prosecution under Section 138 of the N.I. Act in the decision in Anilkumar Vs. Shammy (2002(3) Ker LT 852). I am not satisfied that there are any compelling reasons which would justify or warrant imposition of any deterrent substantive sentence of imprisonment on the petitioner. Leniency can be shown on the question of sentence, but subject to the compensation for the victim of the crime. The victim in this case has been compelled to wait from March, 1999 and to fight two rounds of legal battle for the redressal of his grievances. In these circumstances the direction to pay an amount of Rs.3.5 Lakhs as compensation does not appeal to me as incorrect or excessive. At any rate, the supervisory and correctional jurisdiction as a Court of Revision does not deserve to be invoked. Insofar as the default sentence is concerned. I agree with the learned counsel for the petitioner that it does not conform to the mandate of Section 30, Cr.P.C. Appropriate modification or the default sentence can be done.
(a) This revision petition is allowed in part.
(b) The impugned verdict of guilty and conviction of the petitioner under Section 138 of the N.I. Act are upheld.
(c) But the sentence imposed is modified and reduced. In supersession of the sentence imposed on the petitioner by the Courts below, he is sentenced to undergo imprisonment till rising of Court. He is further directed under Section 357(3), Cr.P.C. to pay an amount of Rs.3,50,000/- as compensation and in default to undergo S.I. for a period of two months. If realised the entire amount shall be released to the complainant.
19. The petitioner shall appear before the learned Magistrate on or before 16-10-2006 to serve the modified sentence hereby imposed. The sentence shall not be executed till that date. If the petitioner does not so appear, the learned Magistrate shall thereafter proceed to take necessary steps to execute the modified sentence hereby imposed.