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2009 DIGILAW 412 (KER)

Ramesh v. M. M. Badrudheen, M. S. M. Bakery

2009-06-02

S.S.SATHEESACHANDRAN

body2009
Judgment : Complainant is the appellant. His complaint filed against the respondents under Section 138 of the Negotiable Instrument Act, for short, the 'N.I.Act', after trial, ended in a judgment of acquittal rendered in favour of the accused. Aggrieved by the order of acquittal, questioning its legality, propriety and correctness, he has come up with this appeal. 2. The case of the complainant is that towards discharge of a loan availed, the accused issued Ext.P1 cheque for a sum of Rs.48,000/- promising its encashment on presentation in due course. The cheque presented, was however, dishonoured due to insufficiency of funds in the account of the accused. Statutory notice issued intimating dishonour and demanding the sum covered by the cheque was not responded with any reply or payment. Hence, the complaint was launched to prosecute the accused for the offence under Section 138 of the N.I.Act. 3. The accused, on appearance, pleaded not guilty when the particulars of the offence were made known. Complainant got himself examined as PW1 and exhibited Exts.P1 to P3 to prove his case. Accused questioned under Section 313 of Cr.P.C. maintaining his innocence contended that he had availed a loan of Rs.15,000/- from one Shahul Hameed, on which, Rs.10,000/- was discharged by daily payment. The balance of Rs.5,000/- alone was outstanding, and the case has been foisted on false allegations. He examined one witness as DW1 to prove his defence. 4. The learned Magistrate, after appreciating the materials produced, accepting the arguments canvassed by the learned counsel for the accused that the complainant was bound to prove the date of service of statutory notice of the accused on dishonour of cheque to reckon the cause of action, and that having not been established in the present case, it was fatal to the prosecution case. The case of the complainant was also found unacceptable to the court below for the reason that the complainant, who admittedly carried money lending business, in his evidence, had stated that there was no entry in his account as to advancing a loan of Rs.48,000/- to the accused as alleged in the complaint. The defence set up by the accused was also found not acceptable to hold the weakness in the evidence of the defence, would not help the complainant to improve his case. The defence set up by the accused was also found not acceptable to hold the weakness in the evidence of the defence, would not help the complainant to improve his case. The learned Magistrate, rendered the judgment of acquittal, absolving him of the offence under Section 138 of the N.I.Act. 5. I heard the learned counsel on both sides. Conclusions found by the learned Magistrate had assailed by the learned counsel for the complainant contending that they are erroneous both under law and facts. Once a registered notice was issued in the correct address of the accused, intimating the dishonour of the cheque and demanding the sum thereunder, as prescribed under Section 138 (b) of the N.I.Act, within the time limit stipulated, any defence on the plea of non service by the addressee, whatever be the reason, is bound to prove and establish by him and not by the complainant, submits the learned counsel for the complainant. The reasoning's of the court below to doubt the case of the complainant in the absence of any entry on the loan transaction, giving rise to Ext.P1 cheque, in his account as admitted by him in his evidence is also attacked by the learned counsel contending that he was entitled to the statutory presumption under Section 139 of the N.I.Act, and that presumption having not been rebutted, he was not expected to and bound to lead evidence on the loan transaction or produce the account books. On the other hand, the learned counsel appearing for the accused contended that the order of acquittal imputed in the appeal is proper, valid and correct, and it does not warrant any interference. 6. The point that emerges for consideration is whether the order of acquittal passed in favour of the accused by the court below is sustainable under law? 7. Perusing the records of the case, I find the learned Magistrate failed to take note of the proved facts and circumstances presented by the materials produced in the case. Ext.P1 cheque is dated 10.11.1998. On presentation before the bank, it was dishonoured under Ext.P2 memo dated 11.11.1998 and intimation of such dishonour from the bank of the complainant is dated 14.11.1998. Ext.P3 copy of the advocate notice issued by the complainant is dated 16.11.1998, but seen actually issued only on 21.11.1998 as evident from the registered receipt attached to the notice. On presentation before the bank, it was dishonoured under Ext.P2 memo dated 11.11.1998 and intimation of such dishonour from the bank of the complainant is dated 14.11.1998. Ext.P3 copy of the advocate notice issued by the complainant is dated 16.11.1998, but seen actually issued only on 21.11.1998 as evident from the registered receipt attached to the notice. Registered receipt with the endorsement of the date as above indicates that notice was issued within 15 days from intimation of the dishonour of the instrument from the bank, complied with the statutory mandate. Complaint was filed by the complainant on 14.12.1998. A notice was properly issued after dishonour of the cheque and a complaint filed, both within the statutory period prescribed under Section 138 (b) of the N.I.Act. But the question involved is whether there was actual service of notice on the accused and in the facts and circumstances involved, if any challenge is raised as to the non service on whom was the burden to establish such non service. Accused has not advanced any defence that he did not receive the notice, when the complainant examined as PW1 was subjected to cross examination. Even when questioned under Section 313 of the Cr.P.C., he did not raise such a defence. Still, the learned Magistrate found merit in the arguments canvassed by the counsel appearing for the accused that in order to sustain a prosecution under Section 138 of the N.I.Act, against an offender, the complainant thereafter has to prove actual service of notice, and in fact, the date of service of notice also established his cause of action. In accepting that contention, reliance was also placed by the learned Magistrate in SLI Import, U.S.A. v. Exim Aides Silk Exporters (1999 (2) KLT 275 (SC)). I am afraid, the contentions raised and the reliance placed by the learned Magistrate, is patently erroneous. In the decision referred to, the date of service of fax message on dishonour of the cheque was established on reckoning the cause of action thereunder, it is held, the offence is complete on the failure to pay the amount within 15 days there from. In the decision referred to, the date of service of fax message on dishonour of the cheque was established on reckoning the cause of action thereunder, it is held, the offence is complete on the failure to pay the amount within 15 days there from. It does not in any way assist the conclusion arrived at by the learned Magistrate that over and above issuing a cheque, the complainant is bound to prove the actual date of service so as to calculate as to from which date the cause of action inures in favour of the drawee or the holder of the instrument. If such a condition is insisted upon, that is, from the drawee or the holder of the dishonoured negotiable instrument, very often it may be seeking the imponderable as he will not be in a position to produce and lead any materials on the actual date of service especially whether a trickster cheque drawer is able to avoid service by adopting surreptitious methods. In this context, it would be advantageous to take note of the observations of the apex court in Alavi Haji v. Muhammed (2007 (3) KLT 77 (SC)) as to how a defence set up as to non servie of notice in a proceedings under Section 138 of the N.I.Act has to be appreciated. In the above decision, the apex court has observed as follows: "The requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C.Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case (2003 (1) KLT 381 (SC)) if the-giving of notice-in the context of Clause (b) of the proviso was the same as the-receipt of notice-a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act." Not only that no defence was canvassed by the accused as to non service of notice, in the present case, no circumstances indicating such non service was also placed on record. When that be so, the enquiry proceeded by the learned Magistrate on that question, solely based on the arguments canvassed by the learned counsel for the accused and on placing reliance on SLI Import's case and Alavi Haji's case (supra), that actual service of notice on the drawer is necessary to reckon the cause of action, was totally unwarranted. In the light of the registered receipt produced, evidencing the issue of notice within the time as mandated by the Statute and having regard to the fact that no defence was canvassed by the accused on non service of notice, it has to be concluded that there was actual service of notice on him as prescribed by law. The learned counsel for the complainant is justified in contending that in the proved facts of the case, complainant is entitled to the presumption under Section 139 of the N.I.Act, and he is not bound to produce the account books regarding the loan transaction. Evidence of the complainant that no entry is made in his account books on the loan transaction with the accused has no significance when the transaction is practically conceded by the accused, setting up an alternate version of receiving only a lesser sum through another and discharge of a substantial portion by part payment. Evidence of the complainant that no entry is made in his account books on the loan transaction with the accused has no significance when the transaction is practically conceded by the accused, setting up an alternate version of receiving only a lesser sum through another and discharge of a substantial portion by part payment. The court below has also observed that evidence of DW1 is unreliable as he was not a person referred to as the commission agent when complainant as PW1 was subjected to cross examination by the accused. The defence of the accused remains un established by any materials and it was correctly found unacceptable by the court below. So much so, in the proved facts and circumstances, the irresistible conclusion that follows is the guilty of the accused for the offence under Section 138 of the N.I.Act. In reversal of the order of acquittal of the accused, he is found guilty and convicted under Section 138 of the N.I.Act. 8. Having regard to the nature of the offence, falling under Section 138 of the N.I.Act, I am of the view that incarceration of the accused in prison for a term is not called for to advance the ends of justice. Accused is sentenced to undergo imprisonment till the rising of court and to pay a sum of Rs.48,000/-as compensation under Section 357 (3) of the Cr.P.C. to the complainant within two months from the date of receipt of copy of this judgment. In default of payment of compensation as directed, the accused shall undergo simple imprisonment for two months more. The accused shall appear and his sureties shall produce him before the Chief Judicial Magistrate Court, Palakkad, on 3.8.2009, and the learned Magistrate shall execute the sentence as directed. Appeal is partly allowed.