A. SATHYANARAYANA v. C. NAGARAJ — 1999 DIGILAW 680 (KAR)

K. R. PRASADA RAO, J. ( 1 ) THIS appeal is filed by the complainant against the order of acquittal of the respondent-accused in respect of the offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the Act'), in Crl. A. No. 10004/98 on the file of the Court of the IV Addl. Sessions Judge, Mayo Hall, Bangalore by the judgment dated 4-7-98 by allowing the appeal and setting aside the order of conviction and sentence passed by the learned X Addl. CMM, Bangalore in C. C. No. 22669/97. ( 2 ) THE appellant-complainant filed the complaint in the trial Court in C. C. No. 22669/97 under Section 138 of the Act alleging that the respondent-accused has issued a cheque for Rs. 5,00,000/- dated 15-3-97 by way of refund of the advance amount received under an agreement of sale transaction for the purchase of the land, when it was ultimately found that the said land does not belong to the respondent. When the said cheque was presented for the payment to the Bank, the same was returned dishonoured with Bank endorsement on 31-3-96 as 'insufficient funds'. Thereafter, the appellant issued notice dated 12-4-96 to the accused calling upon the respondent to pay the said cheque amount within 15 days from the date of receipt of the same. Since the respondent has not complied with the said demand made in the notice, the appellant filed the complaint in the trial Court within one month from the date on which the cause of action arose. ( 3 ) THE respondent pleaded not guilty to the accusation read over to him in the trial Court and claimed to be tried. ( 4 ) THE Trial Court after recording the evidence adduced by both parties and on appreciation of the said evidence, came to the conclusion that the respondent is guilty of the offence under Section 138 of the Act and convicted him for the said offence and sentenced him to undergo 3 months S. I. and to pay a fine of Rs. 8,00,000/-, in default, of payment of fine, to undergo S. I. for six months. The trial Court gave further direction that out of the fine amount to be paid by the respondent, a sum of Rs. 5,00,000/- will be paid to the complainant by way of compensation. 8,00,000/-, in default, of payment of fine, to undergo S. I. for six months. The trial Court gave further direction that out of the fine amount to be paid by the respondent, a sum of Rs. 5,00,000/- will be paid to the complainant by way of compensation. ( 5 ) AGGRIEVED of the said order of conviction and sentence passed, the respondent filed the Criminal Appeal No. 10004/98 on the file of the IV Addl. Sessions Judge, Mayo Hall, Bangalore and the said appeal came to be allowed by the judgment dated 4-7-98 setting aside the order of conviction and sentence passed by the Trial Court. On re-appreciation of the evidence, the 1st appellate Court found that the notice of dishonour of the cheque issued by the complainant has not been served on the respondent and so, there is no cause of action for filing the complaint against the respondent. ( 6 ) I have heard the arguments advanced by the learned counsel appearing on both sides. ( 7 ) THE learned counsel for the appellant-complainant vehemently argued that the notice of the dishonour of the cheque has been sent by registered post with the correct address furnished by the respondent himself in the memorandum of understanding signed by him. The said disposal cover has been returned unserved with the postal endorsement as 'not found' on all the seven days on which the notice was taken for service. It is therefore, contended by him that the Trial Court rightly construed the service as "deemed service" and the lower appellate Court has wrongly interpreted that there is no service of the said notice on the respondent and that he has no knowledge about the dishonour of the cheque issued by him and the demand made for payment of the cheque amount. It is further contended by him that the appellant has also sent the same notice under certificate of posting, Ex. P5 to the same correct address furnished by the respondent himself, and the Trial Court has rightly drawn the presumption that the said notice under certificate of posting must have been served on the respondent in the ordinary course within a day or two. It is further submitted by him that the lower appellate Court has erroneously observed that the address noted on Ex. It is further submitted by him that the lower appellate Court has erroneously observed that the address noted on Ex. P5 is not the correct address of the respondent and so, the presumption of deemed services of the said notice cannot be drawn. According to the learned counsel for the appellant, rebuttal evidence adduced by the respondent-accused to the effect that at the relevant point of time, he was residing in Hosakote as shown in the Voters' list, Ex. D1 produced by him, has been rightly disbelieved by the Trial Court by coming to the conclusion that the entry Ex. D1 (b) marked in the said voters list does not pertain to the respondent herein and that it relates to some other person by same name, Nagaraj. He further contended that the lower appellate Court erroneously believed the evidence of the respondent in this regard by relying upon the said entry Ex. D1 (b) in the voters list, Ex. D1. It is also pointed out by the learned counsel for the appellant that according to the provisions of Section 94 of the Act, if the notice of dishonour of the cheque is sent by post, intimating the drawer of the cheque that the instrument has been dishonoured within a reasonable time after the dishonour of the cheque, it would be a sufficient compliance of the requirement of the notice to be given. Since the notice has been sent not only by registered post, but, also under certificate of posting by the appellant to the respondent, to the correct address given by him, he contended that there is sufficient compliance with the said requirement of the Section 94 of the Act. ( 8 ) IN reply to the above contentions, the learned counsel for the respondent submitted that the first appellate Court was justified in coming to the conclusion that there is no deemed service of notice sent by the appellant both by registered post and under certificate of posting, since the address furnished on the postal covers are not found to be the correct address of the respondent, where he was residing at the relevant time and so, the question of drawing the presumption of deemed service, does not arise in the present case. It is further contended by him that the respondent has furnished sufficient rebuttal evidence to show that he was not residing at the address furnished on the abovesaid postal cover at the relevant time and that he was residing in Hosakote at that time, by producing the voters list, which is marked as Ex. D1. It is also pointed out by him that in an unreported decision of this Court in Cri Rev. P. No. 327/91 (L. Srinivasaiah v. Smt. A. Nagamma) dated 16-1-1995, the certified copy of which is produced by him, it has been held that :"when penal consequences are contemplated, the provisions are to be strictly interpreted and service of notice cannot be equated with the service by post returned with an endorsement 'not found'. "it is further pointed out by him that according to the provisions of Section 138 (b) and (c) of the Act, the payee has to make a demand for the dishonoured cheque amount by giving a notice in writing to the drawer of the cheque within 15 days of receipt of the information from the Bank regarding the return of the cheque and if the drawer of the said cheque fails to make payment of the said amount to the payee, within 15 days of the receipt of the said notice, he shall be liable to be punished under the said Section. Placing reliance on the above provisions, it is contended by him that in the present case, all that has been proved by the appellant is that he has given a notice in writing to the respondent intimating him about the dishonour of the cheque issued by him and calling upon him to pay the cheque amount within 15 days from the date of receipt of the said notice. But, he failed to prove that the said notice has been received by the respondent, and therefore, there is non-compliance with the mandatory provision of service of notice under Section 138 of the Act. ( 9 ) IN view of the rival contentions advanced by the learned counsel appearing on both sides, it must be seen whether the notice issued by the appellant to the respondent has been served on the respondent and whether any presumption of deemed service of the notice can be drawn as contended by the appellant. ( 9 ) IN view of the rival contentions advanced by the learned counsel appearing on both sides, it must be seen whether the notice issued by the appellant to the respondent has been served on the respondent and whether any presumption of deemed service of the notice can be drawn as contended by the appellant. ( 10 ) IT is no doubt pointed out by the learned counsel for the respondent that in the memorandum of agreement, executed by the respondent in favour of the appellant, which is marked in the Trial Court as Ex. P7,the address of the respondent is shown as Premises No. 38, Suddaguntepalya, C. V. Raman Nagar Post, Bangalore-93. The said address is marked as Ex. P7 (a ). Though the learned counsel for the respondent contended that there is no evidence on record to show that the respondent himself has furnished the said address, the said contention cannot be accepted as his signature is found at the said address and if the said address is not his correct address, he could have got it corrected at the time when he signed the said agreement, Ex. P7. It must, therefore, be taken that the said address furnished in Ex. P7 marked as Ex. P7 (a) is the correct address of the respondent. On the postal cover pertaining to the notice sent by the registered post, which is marked as Ex. P6, the same address of the respondent is found and the said postal cover has been returned un-served with an endorsement of the postman on the back of Ex. P6 that the addressee was not found. The post-man has also noted the dates on which the postal cover was taken for service, as 15/4, 16/4, 17/4, 18/4 and 19/4. It is, therefore, clear that on all the abovesaid dates, the post-man tried to serve the notice on the respondent at the abovesaid correct address furnished, but, the respondent could not be found at the address on all those days. As rightly pointed out by the learned counsel for the appellant, if the respondent was not residing at the said address, the postal endorsement could have been that the 'address is incorrect'; or that the addressee was not residing at the said address. So, it is possible to draw an inference from the above postal endorsement on Ex. As rightly pointed out by the learned counsel for the appellant, if the respondent was not residing at the said address, the postal endorsement could have been that the 'address is incorrect'; or that the addressee was not residing at the said address. So, it is possible to draw an inference from the above postal endorsement on Ex. P6 that the respondent evaded purposely to receive the notice by remaining absent in the house. Before drawing this inference, I find it necessary to examine the rebuttal evidence adduced by the respondent that he was not residing in the said address at the relevant time i. e. , during the month of April, 1996. The respondent examined himself as DW 2 and deposed that he was residing from August, 1995 till July, 1996 in the house of one Narayanappa, as a tenant and the said house is situated in V. V. Extension, Hoskote. To prove this fact, he produced the voters list, Ex. D1 and showed the entry at Sl. Nos. 514 and, 515, marked as Ex. D1 (b) pertaining to his name and the names of the members of his family. But, on a perusal of the said entry, it is found that the names of the persons residing at house bearing No. 121/1 are given as Nagaraj, Pillamma, and Padmamma. Nagaraj, the respondent tried to connect the entry with his family by saying that Pillamma is his mother and Padmama is his wife. But, the initials of the respondent is not found at the said entry. The same of the father of the respondent is also not shown in the said entry. So, by merely looking at the said entry, it is not possible to presume that the said entry pertains to the respondent and his family members and that they are residing at premises No. 121/1, V. V. Extension, Hoskote. Further, this voters list was prepared in the year 1995. So, this document does not establish that at the relevant time i. e. , during the month of April 1996, the respondent was residing at the said address in Hosakote. Though another document is produced by the respondent in support of his contention, as Ex. Further, this voters list was prepared in the year 1995. So, this document does not establish that at the relevant time i. e. , during the month of April 1996, the respondent was residing at the said address in Hosakote. Though another document is produced by the respondent in support of his contention, as Ex. D2, which is a certified copy of the decree obtained by him in the suit in O. S. No. 4112/96 filed by him in the City Civil Court, Bangalore city, in its document (sic), his address is shown as No. 38, Suddaguntepalya, C. V. Raman Nagar post, Bangalore-93, it is the same address furnished on the postal cover, Ex. P6. This decree was obtained on 26-6-96. It is therefore, clear from the said document produced by the respondent himself that he was residing at the same address mentioned on the postal cover, Ex. P6 in the month of June 1996. This circumstance supports the contention of the appellant that the respondent was residing at the same address shown on the postal cover, Ex. P6, which was also the same address furnished by him in the memorandum of agreement, Ex. P7. Thus, I find that the rebuttal evidence adduced by the respondent does not establish that he was not residing at the address shown on the postal cover, Ex. P6, at the time when the notice was taken for service on him in the month of April, 1996. In fact, it is also pointed out by the learned counsel for the appellant that the respondent himself has given the same address in the appeal filed by him in the first appellate Court and that he is served with the notice of the present appeal also at the same address as could be seen from the records produced. Thus, it is found that the notice was sent by the appellant to the correct address of the respondent by the registered post and the postal cover, Ex. P6 has been returned with the postal endorsement, that the respondent was not found at the said address. Thus, it is found that the notice was sent by the appellant to the correct address of the respondent by the registered post and the postal cover, Ex. P6 has been returned with the postal endorsement, that the respondent was not found at the said address. So, in my view, the Trial Court was justified in drawing an inference that the respondent deliberately avoided to receive the notice by remaining absent in the house on all the abovesaid dates when the said notice was taken for delivery to his house and so, a presumption of "deemed service" of the notice can be safely drawn. In my view, the lower appellate Court has not properly appreciated all the above facts and came to the erroneous conclusion that the respondent was not residing in the said address furnished on Ex. P6 and by placing reliance on the voters list, Ex. D1 produced by the respondent, though the said voters list does not establish that the entry Ex. D1 pertains to the respondent and his family members and that he was residing at the said address in Hosakote at the relevant time in the month of April, 1996 and the notice was taken to service to a different address. The lower appellate Court also overlooked the fact that the decree Ex. P2 clearly establishes that in the year 1996, at the time when the respondent filed the suit, he was residing at the same address at No. 38, Suddaguntepalya, C. V. Raman Nagar Post, Bangalore-93, to which the notice of the dishonour of the cheque was sent to him through registered post. In a latest decision of the Hon'ble Supreme Court reported in (1999) 3 Crimes 212 : (1999 Cri LJ 4606) (K. Bhaskaran v. Sankaran Vaidhyan Balan), it was held that :"when a notice is returned by the sendee as unclaimed such date would be the commencing date in reckoning the period of 15 days contemplated in Clause (d) to the proviso of Section 138 of the Negotiable Instruments Act. Of course, such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to the respondent-accused address. NO doubt Section 138 of the Negotiable Instruments Act does not require that the notice should be given only by 'post'. Of course, such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to the respondent-accused address. NO doubt Section 138 of the Negotiable Instruments Act does not require that the notice should be given only by 'post'. Nonetheless, the principle incorporated in Section 27 of the General Clauses Act, can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such non-service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice. IF a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice in the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Negotiable Instruments Act. It must be borne in mind that Court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure. "in the present case also, as it is found that the notice sent by registered post to the respondent, has been sent to the correct address furnished by the respondent himself in the memorandum of agreement, Ex. P7 and according to the postal endorsement on the said cover, the respondent was not found at the said address on all the seven days on which the notice was taken for service, in my view, it is a fit case to presume the deemed service of the said notice and that the respondent has deliberately evaded to receive the said notice, to escape from the liability to pay the amount of the dishonoured cheque. Learned counsel for the respondent has relied upon a decision reported in 1997 Cri LJ 4275 (Andh Pra), Mandhadi Ramchandra Reddy v. Gopume Reddy Ram Reddy) wherein it was held that :-"a notice returned unserved with endorsement that petitioner was not found on address - Thus, no cause of action could be said to have arisen in view of Section 138 (c) of the Negotiable Instruments Act. "placing reliance on the above decision, he contended that in the present case also, since the notice has not been served on the respondent, it must be held that cause of action has not arisen to file the complin against the respondent under the provisions of Section 138 of the Act. But, the above decision is not applicable to the facts of the present case since it is found that in the present case, the notice was sent to the correct address of the respondent where he was residing and he deliberately evaded to receive the notice by remaining absent in the house on all the dates on which the notice were taken for service. Learned counsel for the respondent also relied upon the decision reported in (1997) 2 Crimes 707 (Andh Pra) (A Sudershan v. Mannen (Shabir)) wherein, it was held that :-"where a demand notice is returned with postal endorsement 'not found' for seven continuous days' - there cannot be a presumption of service of notice. "since in the present case, it is found that the address given on the postal cover, Ex. P6 is the same address furnished by the respondent in the Memorandum of Agreement, Ex. P7 and the respondent also filed to prove his contention that he was not residing in the said address in the month of April, 1996, when the notice was taken for service, on him, the above decision is not applicable to the facts of the present case. Learned counsel for the appellant relied upon the decision reported in (1998) 2 Bank Cas 409 Rajasthan High Court (Pawan Kumar v. Shakuntala), wherein it was held that :-"if registered letter addressed to person at his residential address does not get served in normal course and returned - can only be attributed to addressee's own conduct. Learned counsel for the appellant relied upon the decision reported in (1998) 2 Bank Cas 409 Rajasthan High Court (Pawan Kumar v. Shakuntala), wherein it was held that :-"if registered letter addressed to person at his residential address does not get served in normal course and returned - can only be attributed to addressee's own conduct. "in the present case also, since it is found that the notice, Exhibit P6 sent by the registered post contains the correct residential address of the respondent which was furnished in Ex. P7, it must be taken that he deliberately evaded to receive the said notice and the non-service of the notice is to be attributed to his own conduct. Learned counsel for the appellant has also relied upon a recent decision of the Hon'ble Supreme Court reported in ILR 1998 Kant 1841 : (Sridhar M. A. v. M/s. Metalloy N. Steel Corporation), wherein it was held that :"presumption of Deemed Service" - in 1996 (1) JT (SC) 669, it was held that if a service is through post and if there is an endorsement "not Available in the House", "house Locked" and "shop Closed", in these circumstances it has to be held that Notice is Deemed to have been served on the accused. Supreme Court explained this earlier decision by observing that "although in appropriate cases "deemed Service" is to be accepted as indicated in 1996 (1) JT (SC) 669, but it may be noted that such "presumption of deemed Service" is to be accepted depending on the facts of each case. "in the present case, the postal endorsement 'not found' means that the respondent was not available in the house. So, the presumption of deemed service of the notice on the respondent can be drawn since it is found that address on Ex. P6 is the correct address furnished by the respondent himself and as it is further found that he is residing in the same address in the year 1996, as could be seen from the certified copy of the decree in suit in O. S. No. 4112/96, produced by him. P6 is the correct address furnished by the respondent himself and as it is further found that he is residing in the same address in the year 1996, as could be seen from the certified copy of the decree in suit in O. S. No. 4112/96, produced by him. In view of the above ruling of the Hon'ble Supreme Court, I do not find it necessary to refer to the contrary view expressed in the abovesaid cited decisions of the High Courts of Andhra Pradesh, Madras, Jammu and Kashmir, and Orissa, which are relied upon by the learned counsel for the respondent. It is also pointed out by the learned counsel for the appellant that the appellant has also sent a copy of the notice under certificate of posting to the same address, which is marked as Ex. P5. He, therefore, contended that a presumption should be drawn that the said notice sent under certificate of posting must have been received by the respondent in the ordinary course. But, it is pointed out by the learned counsel for the respondent that the address furnished on Ex. P5, the certificate of posting is not the same address as found on the postal cover, Ex. P6. According to him, the door number furnished in Ex. P5 is 381, but not, 38. It is further pointed out by him that the Pin Code number is given as 23 on Ex. P5, whereas the correct Pin Code No. is 93. The 1st appellate Court, has no doubt, accepted the contention of the learned counsel for the respondent and came to the conclusion that the address given on Ex. P5 is not the correct address of the respondent. But on a careful perusal of the Ex. P5, it is found that the door number is given as 38, but, not 381, since a cama is put after No. 38 and the same is wrongly read as Door No. 381. However, the pin code number is found to be 23, instead of 93, which is the correct pin code number. So, it is not possible to draw an inference that the notice sent under the certificate of posting must have reached the respondent and that he must have received the same. However, the pin code number is found to be 23, instead of 93, which is the correct pin code number. So, it is not possible to draw an inference that the notice sent under the certificate of posting must have reached the respondent and that he must have received the same. However, since it is found that the notice sent by registered post, was sent to the correct address of the respondent and that presumption of the deemed service of the said notice can be drawn, I find that there is compliance with the mandatory requirements of the notice relating to the dishonour of the cheque and the demand made by the appellant for payment of the dishonoured cheque amount in the present case. I, therefore, find that there is cause of action for filing the complaint and the lower appellate Court was not justified in holding that there is no valid service of notice and there is no cause of action for filing the complaint. Since the respondent has not complied with the demand for payment of the dishonoured cheque amount, in my view, the trial Court has rightly convicted him for the offence under Section 138 of the Act. For all the above reasons, I find that the impugned judgment of the lower appellate Court is liable to be set aside. ( 11 ) ). In the result, this appeal is allowed setting aside the judgment passed by the learned IV Addl. Sessions Judge, Mayo Hall, Bangalore, in Crime No. 10004/98 dated 4-7-98 and the order of conviction passed against the accused in respect of the offence under Section 138 of the Negotiable Instruments Act, and the sentence passed by the trial Court against him, by the judgment dated 9-3-1998, is hereby restated and confirmed. The order passed by the trial Court that out of the fine amount of Rs. 8,00,000/- (Rs. eight lakhs), Rs. 5,00,000/- (Rs. five lakhs) shall be paid as compensation to the complainant is also confirmed. Appeal allowed. --- *** --- .