TaxTMI 
TaxTMI 
2026 (5) TMI 258
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.... 1st respondent herein is the accused in the said case and the 2nd respondent herein is the State of Kerala, represented by the Senior learned Public Prosecutor. 2. Heard the learned counsel for the appellant, the learned counsel appearing for the 1st respondent/accused and the learned Senior Public Prosecutor. 3. I shall refer the parties in this appeal as 'complainant' and 'accused' for easy reference. 4. The complainant lodged complaint under Section 142 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act' for short), alleging commission of offence punishable under Section 138 of the NI Act by the accused, on the premise that the accused issued a cheque bearing No.02075324 dated 31.10.2017....
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....the amount covered by the cheque is due to the appellant. Therefore, the verdict impugned is to be interfered. 8. Opposing this contention, the learned counsel for the 1st respondent/accused submitted that the ratio laid down in Dashrathbhai's case (supra) is the correct law. In view of the above, the offence under Section 138 of the NI Act could not be found, as rightly held by the learned Magistrate, and therefore, the appeal deserves to be dismissed. 9. Coming to the legal issue involved in this case, Sections 15 and 56 of the NI Act assumes significance. Section 15 of the NI Act deals with indorsement and Section 56 of the NI Act deals with indorsement for part of the sum due. Section 15 of the NI Act provides as under: "....
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.... (iii) When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in S.56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under S.138 will stand attracted; (iv) The first respondent has made part - payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the 'legally enforceable debt' on the date of maturity. Thus, the first respondent cannot be deemed to have committed an offence u....
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....e debt; thus no offence under the NI Act would lie in case of dishonour of such a cheque. The rationale is that, in order to attract an offence under Section 138 of the NI Act, the dishonoured cheque must represent a legally enforceable debt. 12. On the facts of this case, admittedly, the cheque is dated 31.10.2017. As per the averments in the complaint, it could be gathered that the cheque was presented for collection through the Idukki District Cooperative Bank, Nedumkandam branch, on 02.11.2017 and the same got dishonoured for want of funds. After dishonour of the cheque for the first time, the accused paid Rs.1,94,000/- and Rs.1,96,000/- on 14.11.2017 and 15.11.2017 respectively to the complainant. It was thereafter when the accused ....