To charge under the Debt Recovery Act. a person has to write a cheque with dishonourable intentions.

In an order delivered by the Nugegoda Magistrate’s Court, it was held that according to Section 25 (1) of the Debt Recovery (Special Provinces) Act (No. 2 of 1990), a person who is accused of issuing a dishonoured cheque must have written the check with the intention of it being dishonoured.

Under Sri Lankan law, if a cheque is returned due to the fault of the drawer, it is criminally punishable under the Debt Recovery Act of 1990 and Section 398 of the Penal Code.

In this case, the complainant, a doctor by profession, had given money to the accused, Amarasiri Gunathilake Wijesekara, to import a vehicle on a Letter of Credit but did not receive the vehicle. It was contended that the vehicle cost Rs. 2.75 million when it eventually landed in the port of Colombo, and the tax was increased.

The complainant contended that he met the accused and wanted to import the vehicle from Japan, which would cost Rs. 2.3 million, and accordingly, on June 18, 2012, the complainant deposited the amount of Rs. 1.4 million, obtained a receipt, and contended that the balance of

Rs. 900,000 will be given once the vehicle is delivered to the doctor.

The accused mentioned that the said vehicle had been confiscated by the State and suggested that an Axio car for Rs. 1.7 million could be given if the said plaintiff doctor agreed to the same.

The accused stated that the Axio car, which the doctor changed to accepting, needed Rs. 570, 000 to be paid as customs duty and tax. As the Rs. 570, 000 was not paid, the accused wanted the doctor to pay the said sum of tax and customs duty. And due to the failure of the accused to go through with the transaction due to the non-availability of the funds of the doctor for the payment of customs duty, the vehicle was not released. The accused was charged under Sections 386, 389, and 403 of the Penal Code and Section 25 (1) of the Debt Recovery Act.

When the case proceeded to trial, the complainant gave evidence, the prosecution was done by the Financial Crimes Investigation Division of Mount Lavinia Police, and the accused was defended by Senior Counsel Ian Fernando.

Defence Counsel Ian Fernando established in court that the accused had given all the opportunities to the complainant, had brought the vehicle down from Japan, and had given the doctor the opportunity to pay the customs duty and obtain the vehicle, which he had failed to do so.

It was also contended that both parties signed an agreement to bring down the said vehicle. However, on returning the said money, which was due, the complainant obtained two checks, and when those checks of Rs. 10, 000 were forwarded to the bank, they were dishonoured. The doctor had encashed the two checks through a third party.

It was also contended that the checks were encashed into his parents accounts, and he also contended that the parents did not have any connections to the said accounts. He admitted that the checks were not encashed in his account.

The defence argued that as per the provisions of Section 25 (1) of the Debt Recovery Act, the checks were given as a security and not to be encashed, and also contended that due to the complainant not paying the tax on the vehicle, it was thereafter sold, as the tax prices on vehicles were increased up to Rs. 5.3 million.

The Nugegoda Magistrate’s Court observed that both parties have agreed to the said agreement, and due to the non-payment of taxes by the complainant, the accused has sold the said vehicle to another. Therefore, the dishonoured checks were given just as a security, and the document was agreed upon by both parties as an agreement to sale, and therefore the accused cannot be charged under the Penal Code, and the case should be supported in a District Court for a civil matter and not under Penal Sections since the chargers have not proven beyond reasonable doubt.