The Kerala High Court ruled that the cheque dishonour case can be filed against a Trust as the Trust being a juristic person.
The revision petition has been filed under Sections 397 and 401 of Code of Criminal Procedure. The revision petitioners are the accused on the files of the Court of Special Judicial First Class Magistrate (N.I.Act Cases), Kozhikode and the appellants, Prana Educational and Charitable Trusts, on the files of the Sessions Court, Kozhikode Division. The respondents herein are the original complainant as well as the State of Kerala.
In order to discharge liability to the complainant and her husband to the tune of Rs.9,50,000/-, the 2nd accused issued cheque for Rs.9,50,000/- dated 03.04.2013 drawn on the account maintained by the 1st accused (Prana Educational and Charitable Trust) and the said cheque was dishonoured for the reason “funds insufficient”.
Accordingly, the complainant launched prosecution against the accused alleging commission of offence punishable under Section 138 of the Negotiable Instruments Act (N.I. Act), since the accused failed to make the payment of the cheque amount on demand, within the statutory period. Challenging the concurrent verdicts of conviction and sentence imposed by the trial court as well as the Appellate Court, this revision petition has been filed.
The specific case of the complainant before the trial court was that on receipt of money as loan from the complainant for and on behalf of the Trust, a cheque of the 1st accused (Trust) was signed and issued by the 2nd accused to discharge the liability of the Trust and accordingly on dishonour of the cheque prosecution was launched.
The counsel for the accused submitted that the 1st accused in this case is a charitable Trust and the 2nd accused is the Managing Trustee and signatory of the cheque, prosecution against the Trust and the Managing Trustee is not legally sustainable, since Trust is not a juristic person as defined under Section 141 of the N.I. Act.
A Single Bench of Justice A Badharudheen observed that “Therefore, following the legal principles set forth above, it has to be held that the challenge raised by the accused on the ground that no prosecution under Section 138 read with Section 141 of the N.I. Act against the Trust would lie, cannot be sustained and the same stands repelled.”
“One cheque issued for Rs.10,00,000/- was encashed and cheque dated 03.04.2013 issued for Rs.9,50,000/- was dishonoured. Thus the transaction and issuance of the cheque, in fact is admitted rather proved by the complainant. In such a case, it is the bounden duty of the accused to rebut the presumptions. In fact, in the case at hand no evidence is available to see the rebuttal” the Court noted.
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