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1997 DIGILAW 642 (KAR)

RAMANNA v. T. JAYAPRAKASH

1997-11-04

MOHAMED ANWAR

body1997
MOHAMED ANWAR, J. ( 1 ) THE argument of learned Counsel for petitioner Sri Ramachandra reddy was heard. The argument of respondent's learned Counsel could not be heard as he did not choose to be present when the matter was taken up for hearing. ( 2 ) THE petitioner who is the accused in Cri. Case No. 16209 of 1995 on the complaint of respondent made before the learned Magistrate on 15-12-1994 alleging commission of an offence under Section 138 of the negotiable Instruments Act, 1881 ('the Act' for short) has filed this petition under Section 482 of the Cr. P. C. praying to quash criminal proceeding against him before the learned Magistrate on the ground that the cognizance of the offence taken by him by his order dated 1-3-1995 was illegal and without jurisdiction in the absence of proof of the date on which the complainant's demand notice under Section 138 (c) of the Act was stated to have been issued by complainant's Advocate. ( 3 ) THE certified copy of the order sheet of the Court below in the said c. C. No. 16209 of 1995 (PCR 568 of 1994) is produced along with the petition. Similarly the xerox copies and the certified copies of the said complaint dated 15-12-1994 as also the bank's endorsement is produced along with the petition. In addition xerox copies of the certified copies of the sworn statement of the complainant recorded by the learned Magistrate together with the xerox copies of the certified copy of Ex. P. 2, Ex. P. 4 xerox copy of the certified copy of both sides of postal cover and Ex. P. 5 xerox copy of certificate of posting are produced. ( 4 ) THE case of the complainant against the petitioner-accused is that at the request of the latter the former had advanced a loan of Rs. 15,000/- in cash and towards repayment thereof the accused had passed the cheque bearing No. 898721, dated 19-10-1994 in complainant's favour which was drawn on Syndicate Bank, Ganganagar, Bangalore. When the said cheque was presented to the said bank by the complainant on 9-11-1994 the same was returned dishonoured by the bank with its shara 'funds insufficient' dated 10-11-1994. Then the complainant got issued the legal notice dated 21-11-1994 at Ex. When the said cheque was presented to the said bank by the complainant on 9-11-1994 the same was returned dishonoured by the bank with its shara 'funds insufficient' dated 10-11-1994. Then the complainant got issued the legal notice dated 21-11-1994 at Ex. P. 3 both by registered post and by postal certificate to the accused informing him of the dishonour of the said cheque and demanding of him the payment of the said cheque amount within 15 days from the date of receipt of that notice. Both the said notices were so sent to the accused on his official address and they were returned unserved on him with the postal endorsement no such person in that address'. Then the same notice was sent by the complainant to the accused to his residential address under Ex. P. 5 the postal certificate. Despite the said demand notice when the accused failed to pay the said amount, the complainant had to file his complaint before the learned Magistrate on 15-12-1994 alleging commission of offence under Section 138 of the Act. On that complaint learned Magistrate took cognizance of the offence and proceeded to record the sworn statement of the complainant on 25-2-1995 who spoke to the contents of his complaint and produced documents Ex. P. 1 to P. 5. On the strength of that statement the learned Magistrate passed an order dated 1-3-1995 holding that a prima facie case was made out by the accused and hence he directed issue of summons for the offence under Section 138 of the Act. ( 5 ) THE maintainability of the prosecution proceedings before the learned Magistrate stands challenged by the petitioner mainly on the ground that the material so placed on record by the complainant does not disclose the actual date of service of the said demand notice Ex. P. 2 on the accused so as to give rise to cause of action for the complainant to initiate criminal prosecution against the former. The learned Counsel for petitioner argued that under Section 138 (c) of the Act, it was imperative requirement for the complainant to place sufficient material establishing the actual date of demand notice contemplated thereunder. In the absence of that date, it was not possible for the learned Magistrate to assume that any cause of action had arisen for the complainant for his complaint. It was the further contention of Mr. In the absence of that date, it was not possible for the learned Magistrate to assume that any cause of action had arisen for the complainant for his complaint. It was the further contention of Mr. Ramachandra Reddy, learned Counsel for petitioner, that mere production of Ex. P. 5 postal certificate, dated 21-11-1994 cannot be taken as prima facie proof of the actual date of service thereof on the accused for the purpose of Section 138 of the Act. In support of this contention reliance was sought to be placed by him on a decision of this Court in Chandrappa v K. Subramanya and Another, as also on the observation of the Supreme court at para 11 of its judgment in K. Narasimhiah v H. C. Singri gowda and Others. The material provision Section 138 (c) reads:"138. Dishonour of cheque for insufficiency, etc. , of funds in the account. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or both: provided that nothing contained in this section shall apply unless. (a ). . . . . . . . . (b ). . . . . . . . . (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice". The material portion of relevant Section 142 which relates to 'cognizance of offences' reads:"142. Cognizance of offences. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974 ). The material portion of relevant Section 142 which relates to 'cognizance of offences' reads:"142. Cognizance of offences. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974 ). (a) no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque; (b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138; (c ). . . . . . . . . . . . ". A combined reading of Section 138 (c) and Section 142 (b) clearly brings this legal position to the fore that it is the date of actual service of the complainant's (payee's or of the holder in due course of the cheque) demand notice on the accused (drawer of the cheque) which gives rise for cause of action under clause (c) of the proviso to Section 138 for the former to lodge the complaint for an offence under Section 138 of the Act against the latter and that this cause of action arises on the date when the said notice is shown to have been duly served on the accused, and also that if within fifteen days of receipt of the notice if the drawer accused pays up the dishonoured cheque amount to the payee complainant or the holder in due course of the cheque the cause of action for the said purpose would cease to exist. The learned Magistrate gets the jurisdiction to entertain the complaint under Section 142 and take cognizance of the offence under Section 138 of the Act only when a valid cause of action therefor exists. ( 6 ) THEREFORE, the crucial point that was required to be considered by the Magistrate in the instant case was whether the complainant had placed sufficient material on record disclosing the actual date of service of Ex. P. 2 demand notice on the accused so as to make out whether the cause of action for the former had arisen to present the complaint against the latter. There is no statement made in the complaint that the notice under Ex. P. 2 demand notice on the accused so as to make out whether the cause of action for the former had arisen to present the complaint against the latter. There is no statement made in the complaint that the notice under Ex. P. 5 postal certificate, said to have been issued by him to the accused was served on the latter on any particular date. Nor was it so stated by him in his sworn statement recorded by the learned magistrate. All that he has produced is Ex. P. 5 postal certificate disclosing the postal despatch of the said notice to the accused on 25-11-1994. ( 7 ) THIS Court relying on its earlier decisions in Bashettiyavar Brothers v iv I. T. O. , Hubli and Others and D. V. Haridev v B. Narayanamurthy (dead) by L. Rs and Another, has held in the case of Chandrappa, supra:"certificate of posting merely evidences the fact of posting of a postal article, but it does not evidence the fact of delivery of postal article to the addressee even though the address given on the postal article is correct". The Supreme Court in K. Narasimhiah's case, supra, has observed:" 'giving of anything as ordinarily understood in the English language is not complete unless it has reached the hands of the person to whom it has to be given. In the eye of law however 'giving is complete in many matters where it has been offered to a person but not accepted by him. Tendering of a. notice is in law therefore giving of a notice even though the person to whom it is tendered refuses to accept it. We can find however no authority or principle for the proposition that as soon as the person with a legal duty to give the notice despatches the notice to the address of the person to whom it has to he given, the giving is complete". ( 8 ) AS has been held by this Court in Chandrappa's case, supra, no inference of service of notice on the addressee muchless of any definite date of the service thereof could be drawn or presumed merely on the basis of the relevant 'certificate of posting". ( 8 ) AS has been held by this Court in Chandrappa's case, supra, no inference of service of notice on the addressee muchless of any definite date of the service thereof could be drawn or presumed merely on the basis of the relevant 'certificate of posting". The posting of a postal article on a particular date cannot and is not proof of the fact of its actual delivery to the addressee and of the particular date on which it was received by him even though the address given on that article is correct. Therefore, in the case on hand, I find, as rightly maintained by Mr. Ramachandra Reddy, that there being total lack of material on record disclosing the actual date of service of Ex. P. 3 demand notice on the accused, the cause of action in respect of said cheque transaction between the parties had not yet arisen and it was not available to the complainant to maintain his complaint before the learned Magistrate alleging commission of offence under Section 138 of the Act by the accused, and in that view of the legal position, the learned Magistrate had no jurisdiction to entertain the complaint and proceed to take cognizance of the alleged offence for the purpose of trial of the accused. Therefore, the criminal proceeding against the petitioner in the said C. C. No. 16209 of 1995 on the file of the learned Magistrate is liable to be quashed. ( 9 ) HENCE, the petition is allowed. The prosecution of the petitioner-accused in C. C. No. 16209 of 1995 and the proceeding therein against him is quashed. --- *** --- . of Rs. 43,368/-, vide allotment order dated 21-3-1997, Annexure-B, to this writ petition. Petitioner's case is that on 22-3-1997, petitioner remitted the whole sum of Rs. 43,368/- and got the receipt for the deposit made which receipt has been annexed as Annexure-C, to this writ petition and in pursuance of the amount, the Market Committee executed a registered lease-cum-sale agreement dated 27-3-1997, copy of which the petitioner has annexed as Annexure-D, to this writ petition. As per condition of the recitals in the deed vide Clause 9, of the deed, petitioner was required to carry out the construction work within the time prescribed thereunder. Petitioner's case is that vide letter dated 16-4-1997, that is annexure-E, from the respondents, petitioner had been required to make the constructions. As per condition of the recitals in the deed vide Clause 9, of the deed, petitioner was required to carry out the construction work within the time prescribed thereunder. Petitioner's case is that vide letter dated 16-4-1997, that is annexure-E, from the respondents, petitioner had been required to make the constructions. ( 4 ) THE petitioner in order to make the construction of shop-cum-godown on the allotted site, did require financial assistance and thereafter, complying with the pre-requisites for construction of the shop-cum-godown on the site allotted, the petitioner requested the Chief Officer of the City Municipal corporation, Sindhanoor, to grant necessary permission for construction and, who had been pleased to grant that permission on 14-8-1997. The petitioner's further case is that the petitioner after meeting the statutory requirements of law including the agricultural Produce Marketing Act, constructed the shop-cum-godown, as per approved plan sanctioned by respondent 1, and after completing the construction work, he started functioning therein carrying on his business. The petitioner's further case is, on the basis of the orders said to have been issued by the 2nd respondent, that is, the Director of the Agricultural Marketing Department-respondent 1 passed a resolution cancelling the allotment of the site made in favour of the petitioner. ( 5 ) FEELING aggrieved from that order of cancellation of allotment, the petitioner has filed this petition. Petitioner's further case is that before the cancellation order was passed, no notice was given to the petitioner, nor was he given an opportunity of hearing. Petitioner's further case is that he had constructed the building after having invested a huge sum of amount for the construction work and got it completed. ( 6 ) THE learned Counsel stated that the amount invested would not be less than rupees 2 lakhs, it may be more than 2 lakhs, he submitted, no doubt, amount has not been mentioned in petition but it was about 2 lakhs. The petitioner has, as such, prayed for cancellation or quashing of the resolution-Annexure-H, dated 28-8-1997, as well as the order of the Director, dated 8-8-1997. The learned Counsel pointed out to me that the allotment had been made with the approval of the director of the Market Committee. ( 7 ) FEELING aggrieved from that order, the petitioner has come up by way of this petition under Article 226 of the Constitution of India before this Court. The learned Counsel pointed out to me that the allotment had been made with the approval of the director of the Market Committee. ( 7 ) FEELING aggrieved from that order, the petitioner has come up by way of this petition under Article 226 of the Constitution of India before this Court. ( 8 ) ON notice being issued to the respondents, the Market Committee filed the statement of objections. It has been stated in Paragraph 2 of the statement of objections filed by respondent 1, as under: "it is respectfully submitted that Site No. 1, situated in the old market-yard is a corner site and according to the circular issued by the Director of Agricultural Marketing in the year 1991, corner sites are required to be preserved for the benefit of the Market Committee and for their use only. In case the corner sites are not necessary for the use of the market Committee, then only the Market Committee could allot the same to deserving market functionaries. Further, when an allotment is to be made in respect of a corner site, the Market Committee was directed to allot such sites only by way of public auction on the basis of lease-cum-sale or leave and licence, as the case may be. In the present case, the allotment of the scheduled site was not made by way of public auction, but only by way of a resolution. Therefore, the 2nd respondent directed the 1st respondent to take necessary steps to cancel the allotment. Accordingly, the market Committee held a meeting and passed a resolution resolving to cancel the allotment made in favour of the petitioner and thereafter communicated the decision to the petitioner". ( 9 ) IN Paragraph 3, it has been submitted that the circular referred to above also states that if the corner sites are allotted by way of public auction, the same are likely to fetch more money to the Market Committee and that would be in the best interest of the Market Committee, since the Market Committee is required to provide all facilities to the market functionaries and the agriculturists in the market yard. ( 10 ) ON this basis, the order has been sought to be justified. ( 10 ) ON this basis, the order has been sought to be justified. ( 11 ) ON behalf of the respondents, that order has sought to be justified on the ground by the learned Counsel for the respondents that there was nothing illegal in the issuance of the direction by the Director to Market Committee to cancel and the market Committee did so, cancelled the allotment. I have applied my mind to the contentions made by the learned Counsels for the parties. ( 12 ) IN my opinion, the order impugned suffers from many illegalities. No doubt, for plots, allotment may be made by way of auction, there may be many good reasons. I do not want to go into those reasons. But, to contend that, to collect more monetary benefits and more or heavy price is the motto and objective for adopting the process of auction does not befit the market Committee, or the object for which it has been created as well as cannot be said to be a valid justification, for such reason does not stand on line with socio-economic objects of welfare state and the Constitution and the Act. The Agricultural marketing Act is a social welfare legislation and is not to be taken to be a business like commercial enterprise, where the authority should think that how much the Market Committee is going to earn by auction as profits as a social objective of the Act is to make available the places for marketing in the market area, and market yards and this facility is not to be confined to the rich businessmen, but may also be made available and be made to reach common man as well poor and weak dealing in agricultural produce and that the poor may also get the benefit. So, this justification, as asserted, I am unable to swallow, and it cannot be taken to be keeping pace with the objectives of the Act. ( 13 ) ANYWAY, the order impugned in this case is invalid and could not be passed, as it had been passed in view of the principle of promissory estoppel applicable and even if it is, otherwise, be taken such an order which has got the civil consequences, could not be passed in violation of the principles of natural justice keeping pace with social and economic justice. ( 14 ) THE facts of this case indicate, the shop had been allotted,no doubt, by the resolution, it has also been mentioned with the approval of the Director, that the land had been allotted in favour of the petitioner and the resolution itself communicated that it was allotted with the approval of the Director. It was allotted subject to deposit and investment, firstly, of Rs. 43,368/-, with the Market Committee. Market Committee accepted that amount, then it executed an agreement-cum-lease-cum-sale in pursuance of which, the petitioner started with the process of putting up the construction and did put the construction, namely, shop-cum-godown. The petitioner must have spent huge amount as claimed by the petitioner and, as stated by the petitioner's Counsel to the tune of rupees two lakhs. The amount invested may be less than Rs. two lakhs, but it would be huge and must have been invested in the construction of shop-cum-godown. The 3rd respondent did sleep over. They did not cancel the lease earlier and return the money with interest, instead, they waited to see that the constructions are completed and when constructions have been completed and petitioner started carrying on the business in the shop-cum-godown, thereafter, they directed cancellation of the allotment order and the transaction exhibited by documents of agreement-cum-lease-cum-sale, dated 27th March, 1997. It is on representation of the respondents' Market Committee, and the approval granted by the Director himself, the land was allotted and petitioner was called upon to pay the huge sum of Rs. 43,368/-, which he deposited in pursuance of letter dated 16-4-1997, which required the petitioner to complete the construction work and to construct the building within the time stipulated in the allotment order. Petitioner had to work hard, even he had to take the loan and did construct the building, that is, shop-cum-godown, after investing an huge amount. ( 15 ) THE shop-cum-godown is a permanent construction and inevery case, petitioner would have invested something, even it may be Rs. two lakhs, at least two lakhs or more, but it was on the representations of the respondents and their asking the petitioner to raise the construction which was at their instance and representation including Director who had approved the allotment order, the petitioner had invested huge amount and in every case, more than two lakh rupees as needed. two lakhs, at least two lakhs or more, but it was on the representations of the respondents and their asking the petitioner to raise the construction which was at their instance and representation including Director who had approved the allotment order, the petitioner had invested huge amount and in every case, more than two lakh rupees as needed. After the money has been invested as the petitioner had acted on the representations of the Market Committee and the Director. These authorities were estopped and were barred from cancelling the allotment order, except and subject to the conditions contained in the allotment or the terms of lease-cum-sale agreement, that is, in case of the breach of the conditions of the agreement or of allotment, the authorities could after following the necessary principles of natural justice and fairplay, have cancelled it. ( 16 ) SO, in my opinion, the order impugned is without jurisdiction. Further, in this case, as it has been asserted that the cancellation of allotment has been done without any opportunity of hearing being given to the petitioner before passing of the cancellation order. ( 17 ) IT is well-settled principle of law that orders having civil consequences, financial or otherwise, which may adversely affect a person, cannot be passed and could not be passed against that person without that person being given a reasonable opportunity of being heard. ( 18 ) THUS considered, on the basis of grounds as mentioned above, the order impugned suffers from error of jurisdiction and error of law. This writ petition is as such, deserves to be allowed. The order impugned dated 28-8-1997, as well as the direction of the Director dated 8-8-1997, deserve to be quashed. ( 19 ) THE writ petition is allowed and the impugned order, copy of which annexed as H, is hereby declared to be null, void and ineffective and inoperative. The respondents are directed not to interfere with the petitioner's possession over the shop-cum-godown, as well as not to implement the order annexure-H. ( 20 ) ACTS of fairness shown by the learned Counsels on both the sides, the costs are made easy. --- *** --- .