Pala MLA Mani C. Kappan has been sentenced to one year of simple imprisonment by a Mumbai court in a cheque-bounce case concerning an alleged financial transaction linked to shares of Kannur International Airport Limited (KIAL). The court has also ordered him to pay substantial compensation to the complainant.
The Additional Metropolitan Magistrate’s Court at Borivali, Mumbai, presided over by Judge S.A. Khalane, convicted Kappan under Section 138 of the Negotiable Instruments Act, 1881, which deals with the dishonour of cheques for insufficiency of funds or other specified reasons.
Court Orders ₹1.20 Crore Compensation
Along with the one-year sentence, the court directed Mani C. Kappan to pay ₹1.20 crore as compensation to the complainant. The amount will also carry simple interest at 9% per annum from the date of the court’s order until the compensation is fully realised.
The court has granted Kappan one month to make the payment. If he fails to comply with the compensation order within the prescribed period, he will have to undergo an additional three months of imprisonment.
The court has further directed the police to issue a non-bailable warrant for execution of the sentence.
Allegations Relating to Kannur Airport Shares
The complaint was filed by Mumbai-based businessman Dinesh Menon, who alleged that he had been induced to part with approximately ₹3.5 crore on the assurance that he would receive shares in Kannur International Airport.
According to the allegations, the promised transaction did not materialise and the cheque issued in connection with the dispute was subsequently dishonoured. The proceedings ultimately resulted in the Mumbai court examining the transaction and finding Kappan guilty under Section 138 of the Negotiable Instruments Act.
A conviction under Section 138 generally arises when a cheque issued towards a legally enforceable liability is dishonoured and the statutory requirements relating to presentation, demand notice and failure to make payment are established before the court.
Earlier Legal Proceedings
The cheque-bounce proceedings form part of a wider series of legal disputes involving Kappan. In an earlier development, the Kerala High Court declined to interfere with the framing of charges against him in connection with the broader controversy.
Subsequently, a special court in Ernakulam acquitted Kappan of the criminal charges in February 2025 arising from the related dispute. The Mumbai proceedings, however, concerned the cheque-bounce complaint and resulted in the present conviction under the Negotiable Instruments Act.
Kappan Plans to Challenge Verdict
Mani C. Kappan, a United Democratic Front (UDF) MLA representing Pala, has consistently maintained that the allegations against him were politically motivated. He has also alleged that the proceedings were connected with efforts to prevent him from assuming a ministerial position that he claimed had been promised to him.
Following the latest judgment, sources close to Kappan indicated that he is expected to challenge the Mumbai court’s conviction before the appropriate appellate court.
The case highlights the serious consequences that can follow from cheque dishonour under Section 138 of the Negotiable Instruments Act, including imprisonment and compensation orders. It also demonstrates that disputes involving substantial financial transactions may result in parallel legal proceedings in different jurisdictions depending on the nature of the allegations and reliefs sought.