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Rajasthan High Court · body

2012 DIGILAW 2356 (RAJ)

Bhagwati Kumar Gupta v. State of Rajasthan

2012-12-21

SANDEEP MEHTA

body2012
Hon'ble MEHTA, J.—The instant misc. petition has been filed on behalf of the accused petitioner Bhagwati Kumar challenging the orders dated 19.2.2011 and 9.4.2012 passed by the learned Special Judicial Magistrate (N.I. Act Cases) Sriganganagar in Complaint Case No. 195/2011 taking cognization and reading over the accusation to him for the offence under Section 138 of the N.I. Act and the order dated 19.10.2012 passed by the learned Addl. Sessions Judge, No. 2, Sriganganagar in revision, whereby the aforesaid orders have been affirmed. 2. Learned counsel Mr. Hemant Jain submits that the orders impugned passed by the learned Courts below as well as all the proceedings of the complaint are illegal and amount to an abuse of process of the Court. He submits that the learned Special Judicial Magistrate (N.I. Act Cases), Sriganganagar is not seized of the territorial jurisdiction to try the case. He further submits that the legal notice for demand of money, which was allegedly sent by the complainant to the petitioner was not served on the petitioner. It was received by one Kamal Kumar and therefore, the proceedings of the complaint are absolutely illegal and amount to an abuse of the process of the Court. 3. Learned counsel placed reliance on the decision of this Court in the case of M.D. Thomas vs. P.S. Jaleel & Anr. reported in (2009) 14 SCC 398 in support of his argument and submitted that the instant misc. petition deserves to be accepted and the proceedings of the Complaint No. 195/2011 pending in the Court of learned Special Judicial Magistrate (N.I. Act Cases), Sriganganagar deserve to be quashed. 4. Heard and considered the arguments of the learned counsel for the petitioner and the learned Public Prosecutor and perused the orders impugned passed by the Courts below and the documents field along with the documents. 5. The basic thrust of the arguments of the learned counsel for the petitioner is based on the contention that the mandatory notice for the demand of money was not served upon the petitioner personally and therefore, it cannot be considered to have been served to him and as such, the proceedings of complaint are vitiated. 5. The basic thrust of the arguments of the learned counsel for the petitioner is based on the contention that the mandatory notice for the demand of money was not served upon the petitioner personally and therefore, it cannot be considered to have been served to him and as such, the proceedings of complaint are vitiated. He has relied on decision of Hon'ble the Apex Court in the case of M.D. Thomas vs. P.S. Jaleel, referred to supra, wherein the notice of demand was served upon the wife of the accused and the Hon'ble Apex Court held that the mandatory requirement of giving notice of demand to terms of Clause (b) of the proviso to Section 138 of the Act was not complied with. 6. In the opinion of this Court, the aspect which this Court has to consider is as to whether in light of the earlier view expressed by the Hon'ble Apex Court in its decision rendered in the case of C.C. Alavi Haji vs. Palapetty Muhammed & Anr., reported in (2007) 3 SCC Crime 236, the contention of the learned counsel for the petitioner, which is based on the subsequent Supreme Court Judgment rendered in the case of M.D. Thomas (supra) can be accepted. The Hon'ble Apex Court in the case of C.C. Alvi Haji, was answering a reference on the aspect as to what is the concept and requirement of giving notice to the drawer of the cheque prior to the initiation of the prosecution under Sec. 138 of the N.I. Act. The Hon'ble Apex Court answered the reference made to it in this regard and a Three Judges Bench of Hon'ble Apex Court after considering the various facets of law including the provisions of Section 27 of the General Clauses Act, 1987 observed and concluded as below:- "Chapter XVII of the Act originally containing Sections 138 to 142 was inserted in the Act by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 with the object of promoting and inculcating faith in the efficacy of banking system and its operations and giving credibility to negotiable instruments in business transaction. The introduction of the said Chapter was intended to create an atmosphere of faith and reliance on banking system by discouraging people from not honouring their commitments by way of payment through cheques. The introduction of the said Chapter was intended to create an atmosphere of faith and reliance on banking system by discouraging people from not honouring their commitments by way of payment through cheques. Section 138 of the Act was enacted to punish those unscrupulous persons who purported to discharge their liability by issuing cheques without really intending to do so. To make the provisions contained in the said Chapter more effective, some more Sections were inserted in the Chapter and some amendments in the existing provisions were made. Though, in this reference, we are not directly concerned with these amendments but they do indicate the anxiety of the Legislature to make the provisions more result oriented. Therefore, while construing the provision, the object of the legislation has to be borne in mind. 5. As noted above, the controversy arises in the context of service of notice in terms of Section 138 of the Act. The conditions pertaining to the notice to be given to the drawer, have been formulated and incorporated in Clauses (b) and (c) of the proviso to Section 138 of the Act, which read as follows:- "Provided that nothing contained in this section shall apply unless (a)..... (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, of the receipt of information by him from the bank regarding the return of the cheque as upheld; and (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." 6. As notice hereinabove, Section 138 of the Act was enacted to punish unscrupulous drawers of cheques who, though purport to discharge their liability by issuing cheque, have no intention of really doing so. Apart from civil liability, criminal liability is sought to be imposed by the said provision on such unscrupulous drawers of cheques. As notice hereinabove, Section 138 of the Act was enacted to punish unscrupulous drawers of cheques who, though purport to discharge their liability by issuing cheque, have no intention of really doing so. Apart from civil liability, criminal liability is sought to be imposed by the said provision on such unscrupulous drawers of cheques. However, with a view to avert unnecessary prosecution of an honest drawer of the cheque and with a view to give an opportunity to him to make amends, the prosecution under Section 138 of the Act has been mad subject to certain conditions. These conditions are stipulated in the proviso to Section 138 of the Act, extracted above. Under Clause (b) of the proviso, the payee or the holder of the cheque in due course is required to give a written notice to the drawer of the cheque within a period of thirty days from the date of receipt of information from the bank regarding the return of the cheque as unpaid. Under Clause (c), the drawer is given fifteen days time from the date of receipt of the notice to make the payment and only if he fails to make the payment, a complaint may be filed against him. As noted above, the object of the proviso is to avoid unnecessary hardship to an honest drawer. Therefore, the observance of stipulations in quoted Clause (b) and its aftermath in Clause (c) being a pre-condition for invoking Section 138 of the Act, giving a notice to the drawer before filing complaint under Section 138 of the Act is a mandatory requirement. 7. The issue with regard to interpretation of the expression `giving' of notice used in Clause (b) of the proviso is no more res integra. In K. Bhaskaran vs. Sankaran Vaidhyan Balan & Anr., the said expression came up for interpretation. Considering the question with particular reference to scheme of Section 138 of the Act, it was held that failure on the part of the drawer to pay the amount should be within fifteen days of the receipt' of the said notice. `Giving notice' in the context is not the same as `receipt of notice'. Giving is a process of which receipt is the accomplishment. `Giving notice' in the context is not the same as `receipt of notice'. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the notice to the drawer at the correct address and for the drawer to comply with Clause (c) of the proviso. Emphasizing that the provisions contained in Section 138 of the Act required to be construed liberally, it was observed thus: "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 on 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 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 Maxwell's Interpretation of Statues the learned author has emphasized that "provisions relating to giving of notice often receive liberal interpretation." (vide page 99 of the 12th Edn.) The context envisaged in Section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the legislature. The words in Clause (b) of the proviso to Section 138 of the Act show that payee has the statutory obligation to "make a demand" by giving notice. The thrust in the clause is on the need to "make a demand". It is only the mode for making such demand which the legislature has prescribed. A payee can sent the notice for doing his part for giving the notice. Once it is dispatched his part is over and the next depends on what the sendee does." 8. The thrust in the clause is on the need to "make a demand". It is only the mode for making such demand which the legislature has prescribed. A payee can sent the notice for doing his part for giving the notice. Once it is dispatched his part is over and the next depends on what the sendee does." 8. Since in Bhaskaran's case (supra), the notice issued in terms of Clause (b) had been returned unclaimed and not as refused, the Court posed the question: "Will there be any significant difference between the two so far as the presumption of service is concerned?" It was observed that though Section 138 of the Act does not require that the notice should be given only by "post", yet in a case where the sender has dispatched the notice by post with correct address written on it, the principle incorporated in Section 27 of the General Clauses Act, 1897 (for short `G.C. Act') could profitably by imported in such a case. It was held that in this situation service of notice is deemed to have effected on the sendee unless he proves that it was not really served and that he was not responsible for such non-service. 9. All these aspects have been highlighted and reiterated by this Court recently in Vinod Shivappa's case (supra). Elaborately dealing with the situation where the notice could not be served on the addressee for one or the other reason, such as his non availability at the time of delivery, or premises remaining locked on account of his having gone elsewhere etc; it was observed that if in each such case, the law is understood to mean that there has been no service of notice, it would completely defeat the very purpose of the Act. It would then be very easy for an unscrupulous and dishonest drawer of a cheque to make himself scare for sometime after issuing the cheque so that the requisite statutory notice an never be served upon him and consequently he can never be prosecuted. It was further observed that once the payee of the cheque issues notice to the drawer of the cheque, the cause of action to file a complaint arises on the expiry of the period prescribed for payment by the drawer of the cheque. It was further observed that once the payee of the cheque issues notice to the drawer of the cheque, the cause of action to file a complaint arises on the expiry of the period prescribed for payment by the drawer of the cheque. If he does not file a complaint within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138 of the Act, his complaint gets barred by time. Thus, a person who can dodge the postman for about a month or two, or a person who can get a fake endorsement made regarding his non availability, can successfully avoid his prosecution because the payee is bound to issue notice to him within a period of 30 days from the date of receipt of information from the bank regarding the retune of the cheque as unpaid. He is, therefore, bound to issue the notice, which may be returned with an endorsement that the addressee is not available on the given address. This Court held: "We cannot also lost sight of the fact that the drawer may by dubious means manage to get an incorrect endorsement made on the envelope that the premises has been found locked or that the addressee was not available at the time when postman went for delivery of the letter. It may be that the address is correct and even the addressee is available but a wrong endorsement is manipulated by the addressee. In such a case, if the facts are proved, it may amount to refusal of the notice. If the complainant is able to prove that the drawer of the cheque knew about the notice and deliberately evaded service and got a false endorsement made only to defeat the process of law, the Court shall presume service of notice. This, however, is a matter of evidence and proof. Thus even in a case where the notice is returned with the endorsement that the premises has always been found locked or the addressee was not available at the time of postal delivery, it will be open to the complainant to prove at the trial by evidence that the endorsement is not correct and that the addressee, namely the drawer of the cheque, with knowledge of the notice had deliberately avoided to receive notice. Therefore, it would be pr-mature at the stage of issuance of process, to move the High Court for quashing of the proceeding under Section 482 of the Code of Criminal Procedure. The question as to whether the service of notice has been fraudulently refused by unscrupulous means is a question of fact to be decided on the basis of evidence. In such a case the High Court ought not to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure." 10. It is, thus, trite to say that where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the G.C. Act would be attracted; the requirement of Clause (b) of proviso to Section 138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in Clause (c) of the said proviso for payment by the drawer of the cheque. Nevertheless, it would be without prejudice to the right of the drawer to show that he had no knowledge that the notice was brought to his address. 11. However, the Referring Bench was of the view that this Court in Vinod Shivappa' case (supra) did not take note of Section 114 of Evidence Act in its proper perspective. It felt that the presumption under Section 114 of the Evidence Act being a rebuttable presumption, the complaint should contain necessary averments to raise the presumption, the complaint should contain necessary averments to raise the presumption of service of notice; that it was not sufficient for a complainant to state that a notice was sent by registered post and that the notice was returned with the endorsement "out of station"; and that there should be a further averment that the addressee-drawer had deliberately avoided receiving the notice or that the addressee had knowledge of the notice, for raising a presumption under Section 114 of Evidence Act. 12. Therefore, the moot question requiring consideration is in regard to the implication of Section 114 of the Indian Evidence Act, 1872 insofar as the service of notice under the said proviso is concerned. Section 114 of the Indian Evidence Act, 1872 reads as follows: "Section 114. 12. Therefore, the moot question requiring consideration is in regard to the implication of Section 114 of the Indian Evidence Act, 1872 insofar as the service of notice under the said proviso is concerned. Section 114 of the Indian Evidence Act, 1872 reads as follows: "Section 114. Court may presume existence of certain facts.- The Court may presume the existence of any fact which it thinks likely to have happened. Regard being had to the common course of natural events human conduct and public and private business, in their relation to the facts of the particular case. Illustration The Court may presume.... (f) That the common course of business has been followed in particular cases;... 13. According to Section 114of the Act, read with illustration (f) thereunder, when it appears to the Court that the common course of business renders it probable that a thing would happen, the Court may draw presumption that the thing would have happened, unless there are circumstances in a particular case to show that the common course of business was not followed. Thus, Section 114 enables the Court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. Consequently, the Court can presume that the common course of business has been followed in particular cases. When applied to communications sent by post, Section 114 enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addresses. But the presumption that is raised under Section 27 of the G.C. Act is a far stronger presumption. Further, while Section 114 of Evidence Act refers to a general presumption, Section 27 refers to a specific presumption. For the sake of ready reference, Section 27 of G.C. Act is extracted below: "27. But the presumption that is raised under Section 27 of the G.C. Act is a far stronger presumption. Further, while Section 114 of Evidence Act refers to a general presumption, Section 27 refers to a specific presumption. For the sake of ready reference, Section 27 of G.C. Act is extracted below: "27. Meaning of service by post.-Where any Central Act or Regulation made after the commencement of this Act authorised or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "sent" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post." 14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the retune of the notice unserved, it is deemed to have been served or that the addresses is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addresses, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station", due service has to be presumed. [Vide Jagdish Singh vs. Nathu Singh; State of M.P. vs. Hiralal & Ors. and V. Raja Kumari vs. P. Subbarama Naidu & Anr.] It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved. 15. 15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the Court to draw presumption or inference either under Section 27 of the G.C Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque. It is well settled that at thee time of taking cognizance of the complaint under Section 138 of the Act, the Court is required to be prima facie satisfied that a case under the said Section is made out and the aforenoted mandatory statutory procedural requirements have been complied with. It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In our opinion, this interpretation of the provision would effectuate the object and purpose for which proviso to Section 138 was enacted, namely, to avoid unnecessary hardship to an honest drawer of a cheque and to provide him an opportunity to make amends. 16. A noticed above, the entire purpose of requiring a notice is to give an opportunity to the drawer to pay the cheque amount within 15 days of service of notice and thereby free himself from the penal consequences of Section 138. In Vinod Shivappa (supra), this Court observed: "One can also conceive of cases where a well intentioned drawer may have inadvertently missed to make necessary arrangements for reasons beyond his control, even though he genuinely intended to honour the cheque drawn by him. The law treats such lapses induced by inadvertence or negligence to be pardonable, provided the drawer after notice makes amends and pays the amount within the prescribed period. The law treats such lapses induced by inadvertence or negligence to be pardonable, provided the drawer after notice makes amends and pays the amount within the prescribed period. It is for this reason that Clause (c) of proviso to Section 138 provides that the section shall not apply unless the drawer of the cheque fails to make the payment within 15 days of the receipt of the said notice. to repeat, the proviso is meant to protect honest drawers whose cheques may have been dishonoured for the fault of others, or who may have genuinely wanted to fulfil their promise but on account of inadvertence or negligence failed to make necessary arrangements for the payment of the cheque. The proviso is not meant to protect unscrupulous drawers who never intended to honour the cheque issued by them, it being a part of their modus operandi to cheat unsuspecting persons. 17. It is also to be borne in mind that 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 complainant 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. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran's case (supra), 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. 18. In the instant case, the averment made in the complaint in this regard is: Though the complainant issued lawyer's notice intimating the dishonour of cheque and demanded payment on 4.8.2001, the same was returned on 10.8.2001 saying that the accused was out of station. True, there was no averment to the effect that the notice was sent at the correct address of the drawer of the cheque by registered post acknowledgment due. But the returned envelope was annexed to the complaint and it thus, formed a part of the complaint which showed that the notice was sent by registered post acknowledgment due to the correct address and was returned with an endorsement that the addressee was abroad. We are of the view that on facts in hand the requirements of Section 138 of the Act had been sufficiently complied with and the decision of the High Court does not call for interference." 7. In view of the aforesaid authoritative pronouncement of the Hon'ble Apex Court in the larger bench reference, there is hardly any room for any doubt that the onus on the holder of the cheque before launching a prosecution under Section 138 of the Act is only to the extent of sending the notice to the correct address of the drawer. Thereafter, the necessary consequences as enshrined in Section 27 of the General Clauses Act would follow, as per which has to be presumed that the notice has been served on the addressed. It is not disputed by the learned counsel for the petitioner that the notice, which was sent by the complainant was at the correct address of the accused. 8. Who at the correct address receives the notice cannot be the control of the complainant. It would be too harsh and virtually an absurd proposition to require from the holder of the cheque to manage the affairs in such a fashion that the same is served on the addressee himself. 8. Who at the correct address receives the notice cannot be the control of the complainant. It would be too harsh and virtually an absurd proposition to require from the holder of the cheque to manage the affairs in such a fashion that the same is served on the addressee himself. It is only in order to avoid such situation that the Legislature enacted Section 27 of the General Clauses Act providing for presumption of service, even in cases, wherein the notice is not accepted by the addressee or cannot be served for various other reasons. As interpreted by the Hon'ble Apex Court in C.C. Alva Haji's case, even a refusal to accept the notice has been considered to be a sufficient service upon the addressee. If the contention of the learned counsel for the petitioner is accepted then the same would lead to situation of absolute absurdity. Such an interpretation would be totally against the spirit of Section 138 of the N.I. Act. The unscrupulous accused would then easily manipulate the affairs and have the acknowledgement of the notice signed by anybody apart from himself/herself and then try to take a shield of non-service of the notice for raising a defence that the notice was not served and thus proceedings are vitiated. This in the opinion of this Court cannot be correct interpretation of the legal requirements of the Section 138 of the N.I. Act. The Hon'ble Apex Court whilst considering the case of M.D. Thomas (supra) was not made aware of the earlier Larger Bench decision rendered in the case of C.C. Alva Haji. Applying the law of precedents, the decision rendered by the Larger Bench of the Hon'ble Apex Court in the case of C.C. Alva Haji has to be considered to be holding field and to be laying down the correct position of law. In the case at hand also, the complainant in his complaint has specifically averred that the mandatory notice of demand was sent by a registered post to the accused and the notice has been received by Komal Gupta the family member of the accused at his correct address on 27.7.2010. In the case at hand also, the complainant in his complaint has specifically averred that the mandatory notice of demand was sent by a registered post to the accused and the notice has been received by Komal Gupta the family member of the accused at his correct address on 27.7.2010. Therefore, there is no force in the contention of the learned counsel for the petitioner that the notice in this case has not been served as per Section 138 of the N.I. Act and that the proceedings should be quashed on this ground. The second ground, which has been advanced by the learned counsel for the petitioner that the Court at Sriganganagar had no territorial jurisdiction to entertain the complaint is unsupported by any material in this regard and appears to have been raised just in a casual fashion. Therefore, there is no force in the misc. petition and the same is liable to be dismissed. The upshot of the above discussion is that the misc. petition fails and is hereby rejected The stay petition is also rejected.