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Andhra High Court · body

2012 DIGILAW 880 (AP)

Takkarsu Jyothir Mayi v. Kusam Rajamouli

2012-09-14

G.KRISHNA MOHAN REDDY

body2012
Judgment 1. In both these matters, there is a common question as to whether return of notices addressed to the accused (petitioners/accused) with endorsement “addressee was not available” would amount to sufficient compliance of the service of notices for the purpose of filing complaint and prosecuting the accused under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’) respectively. 2. It is contended on behalf of the accused that by virtue of Section 138 N.I. Act, the notices said to be sent to the accused should have been served upon them for the purpose of taking necessary action under that provision subject to complying with other relevant formalities enshrined thereunder. On the other hand, though by virtue of Section 27 of the General Clauses Act, 1897, when a notice was sent to a person giving proper address of him that would give a presumption of proper service of the notice upon him when the notice was returned with endorsement “addressee was not available”, that presumption stood rebutted. He has placed reliance upon the decisions in A.SUDERSHAN v. MANNAN (SHABIR) (1997(1) ALD (Crl.) 795 (AP) and RAHUL BUILDERS v. ARIHANT FERTILIZERS AND CHEMICALS (2008) 2 SCC 321 ) in support of his contention. 3. Learned counsel for the complainant has contended that by virtue of Section 27 of the General Clauses Act mere sending the notice to the proper address of the accused would be suffice of the proper compliance whereas the return of the notice with the endorsement “The addressee was not available” is not suffice to rebut that presumption. 4. Therefore, it is to be seen as to whether proper service of the notices took place or whether there are grounds to quash the proceedings. 5. It is necessary to extract Section 138 of N.I. Act and also Section 27 of the General Clauses Act for proper appreciation of the matter. 4. Therefore, it is to be seen as to whether proper service of the notices took place or whether there are grounds to quash the proceedings. 5. It is necessary to extract Section 138 of N.I. Act and also Section 27 of the General Clauses Act for proper appreciation of the matter. Section 138 of the N.I. Act enjoins; 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 3 (8) 8. Substituted by The Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 (Act 55 of 2002) [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it was drawn or within the period of its validity, whichever is earlier. (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, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, 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. Explanation-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.” Section 27 of the General Clauses Act enjoins; Meaning of service by post – Where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression “serve” or either of the expressions “give” or “send” 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”. No doubt these provisions contemplate that such a notice should be served upon the accused. 6. In G.S.SRIKANTH, M.D., TALAVADI ROCK AND MINERAL PRODUCTS, MADRAS v. SRI LAKSHMI FINANCIERS (1998(2) ALD (Crl.) 378 (AP), a notice was sent by unregistered post to the accused concerned therein under Section 138 of N.I. Act, but the complainant concerned therein did not receive the corresponding postal cover or any acknowledgement from the accused. A plea was taken there that by virtue of Section 27 of the General Clauses Act, it was to be presumed that the notice was served, this Court held as follows. “(16) In my considered opinion if the holder or the payee of a cheque makes a, demand for payment by giving a notice, in writing to the drawer of the cheque under registered post acknowledgment due and if neither the unserved postal cover nor the acknowledgment is received by the payee or the holder of the cheque, a presumption would arise about the service of notice upon the drawer of the cheque. The complaint filed after expiry of fifteen days from the date of the said notice would satisfy the requirement of law. (17) But the crucial question that would arise for consideration is as to whether such a notice was at all sent under registered post acknowledgment due in the present case? (18) It is urged by the learned Counsel for the petitioners that there is no evidence whatsoever before this Court that such a notice was sent under registered post acknowledgment due. (18) It is urged by the learned Counsel for the petitioners that there is no evidence whatsoever before this Court that such a notice was sent under registered post acknowledgment due. IT may be noticed that a copy of the statutory notice dated 14-12-1996 has been filed along with the complaint and the list of documents' would show the same. There is a specific averment in the complaint that the "notice dated 14-12-1996 was sent under registered post, acknowledgment due and the complainant has received neither the unserved postal cover nor the acknowledgment. As observed by me the presumption that is available that the notice is deemed to have been served, is a rebuttable presumption. IT is not as if for all practical purposes, the Court has to presume and proceed as if the notice was served as is required in law. It shall certainly be open to the petitioners accused to rebut the presumption and establish that in fact, the complainant did not send any such notice under registered post acknowledgment due. At this stage, it is not possible for this Court to record any finding as to whether the notice was in fact, sent to the petitioner accused under registered post acknowledgment due. In a proceeding under Section 482 of the Code of Criminal Procedure, this Court has to proceed on the assumption that the averments made in the complaint are true on their face value”. 7. As there was no definite evidence as to whether the notice was sent by unregistered post with acknowledgement due, it was held that it was not possible for the Court to record any finding as to whether the notice was in fact sent to the accused by unregistered post with acknowledgment due or not while holding that when a notice was sent by registered post with acknowledgment due to the address given and the cover and the acknowledgement were not returned, then only it was to be presumed by virtue of Section 27 of the General Clauses Act that it was served on the addressee. It implies that if the cover and acknowledgment were returned with some postal endorsement, a different meaning may be drawn subject to the words of the postal endorsement. 8. It implies that if the cover and acknowledgment were returned with some postal endorsement, a different meaning may be drawn subject to the words of the postal endorsement. 8. In A. SUDERSHAN’s case (1 supra), a notice was sent under Section 138 of N.I. Act to the accused concerned therein on the ground of dishonour of a cheque issued in respect of a legally enforceable debt, but it was returned with endorsement “party continuously absent for (7) days”. Considering various aspects of the case, this Court observed as under. “(4) In order to prove the service of notice on the accused the complainant got examined himself as P.W. 1. He stated in his evidence that he issued a notice, vide exhibit B-4 by registered post and the same has been returned. The postal envelop is marked as exhibit B-5. On exhibit P-5, the postal endorsement is to the effect that "party continuously seven days absent". Except the evidence of P.W. 1 there is no other evidence regarding the service of notice on the accused P.W. 1 did not state in his evidence that the accused was evading the service of notice. Having regard to these circumstances, I have to see whether there is service of notice on the accused in terms of section 138, clauses (b) and (c) of the Negotiable Instruments Act………………………. Thus, from the combined reading of clauses (b) and (c) of section 138 of the Negotiable Instruments Act, it is clear that unless a notice in writing is received by the drawer of such a cheque the offence would not be constituted. Therefore, the receipt of notice is absolutely necessary as a precondition for constituting such an offence. The act of giving a notice contemplated by section 138 of the Negotiable Instruments Act means actually serving the notice in terms of section 27 of the General Clauses Act, 1897. In other words even if there is any ambiguity regarding what constitutes service of notice under section 138 of the Negotiable Instruments Act, section 27 of the General Clauses Act, 1897, has clarified the position of law. From the reading of Section 27 of the General Clauses Act, 1897, it is clear that where any document under a Central Act is required to be served by post, such a service shall be effected by delivering the same in the ordinary course of post. From the reading of Section 27 of the General Clauses Act, 1897, it is clear that where any document under a Central Act is required to be served by post, such a service shall be effected by delivering the same in the ordinary course of post. It further makes it clear that unless a different intention appears as per any Act or regulation, such a service shall be deemed to be effected by properly addressing prepaying and posting by registered post. In other words, if such a document is sent by registered post and if it does not return back it is deemed to have been served. But such a presumption is a rebuttable presumption and it is always open to the addressee to prove that in fact he did not receive such a registered post. It is only having regard to this kind of presumption found under section 27 of the General Clauses Act, 1897, and also similar presumption found under section 114 of the Indian Evidence Act, the courts in India have presumed the service of such a notice or document when such a registered post is not returned back. ……………………………………………………. ……………………………………………………. It is a rebuttable presumption and to draw a similar presumption against an innocent person who is not found in his house for seven continuous days would be unreasonable. ……………………………………………………. …………………………………………………….” Therefore, in this decision, it is clearly held that returning of such cover with endorsement “addressee not known” cannot be held to be proper service of the notice, whereas on the other hand, it rebutted the presumption available under Section 27 of the General Clauses Act or Section 114 of the Evidence Act. 9. In RAHUL BUILDERS’s case (2 supra), learned Division Bench of the Supreme Court considered the ambit of an imperfect notice given. About the ambit of the provisions, the Supreme Court observed. “(10.) Service of a notice, it is trite, is imperative in character for maintaining a complaint. It creates a legal fiction. Operation of Section 138 of the Act is limited by the proviso. When the proviso applies, the main Section would not. Unless a notice is served in conformity with Proviso (b) appended to Section 138 of the Act, the complaint petition would not be maintainable. The Parliament while enacting the said provision consciously imposed certain conditions. Operation of Section 138 of the Act is limited by the proviso. When the proviso applies, the main Section would not. Unless a notice is served in conformity with Proviso (b) appended to Section 138 of the Act, the complaint petition would not be maintainable. The Parliament while enacting the said provision consciously imposed certain conditions. One of the conditions was service of a notice making demand of the payment of the amount of cheque as is evident from the use of the phraseology "payment of the said amount of money". Such a notice has to be issued within a period of 30 days from the date of receipt of information from the bank in regard to the return of the cheque as unpaid.” Thus in this decision, the Supreme Court held that unless the notice was served in conformity with the proviso (b) of the Section 138, the complaint/petition would not be maintainable. 10. In M/s APARNA AGENCIES, HYDERABAD v. P.SUDHAKAR RAO [1999-LAWS (APH)-7-128]a notice was sent, but the addressee was not found for seven days following which it was returned with endorsement to that effect, this Court over-ruling the principle laid down in SUDERSHAN’s case, held as under. “I read the relevant provisions viz., Section 27 of the General Clauses Act and Section 114(e) of Evidence Act again and again with a view to see whether the interpretation in the underlined sentence is possible or not. In my considered opinion the qualification that 'if the registered cover does not return back' is not at all contemplated by the above provisions. The plain meaning of the above provision is that service shall be deemed to be effected by (1) properly addressing; (2) pre-paying and (3) posting by registered post. These are the 3 requirements for invoking Section 27 of the General Clauses Act and nothing more. There is no requirement of that cover not returning back for raising a presumption. It is seen that the judgments of the Apex Court cited M/s. Madan and Co. These are the 3 requirements for invoking Section 27 of the General Clauses Act and nothing more. There is no requirement of that cover not returning back for raising a presumption. It is seen that the judgments of the Apex Court cited M/s. Madan and Co. v. Wazir Jaivir Chand ( AIR 1989 SC 630 )Attabira Regulated Market Committee v. Ganesh Rice Mills ( AIR 1997 SC 1540 )and Indian Bank v. Dalla Venkata Chinna Krishnam Raju ( AIR 1991 SC 908 )are not brought to the notice of the learned Judge especially the judgment Indian Bank v. Datla Venkata Chinna Krishnam Raju (7 supra), wherein the registered cover was in fact returned and yet the presumption of deemed service was raised. I am sure that if the above authorities were brought to the notice of the Hon'ble Judge, his view would have been different. Hence, with all respect I hold that the above judgment is per incuriam.” 11. Thereby, in this decision it is not accepted that the presumption provided under Section 27 of the General Clauses Act could not be said to be rebutted simply because the postal cover with acknowledgement was returned with endorsement “Addressee was not available” while holding that the plain meaning of that provision would be that the service should be deemed to be effected by (1) properly addressing; (2) pre-paying and (3) posting by registered post, to attract the same provision and nothing more and that would not speak about non-returning of cover for raising presumption. Much emphasis is to be given to the fact that such a finding was arrived at by the learned Judge while following the judgments rendered by the Apex Court mentioned supra. 12. In fact in ATTABIRA REGULATED MARKET COMMITTEE and INDIAN BANK this aspect was not considered. In M/s. MADAN & CO., with regards to termination of tenancy a notice was sent by post for payment of arrears of rent and also termination of the tenancy, but it was returned with endorsement “Left without address, returned to sender” following which similar question was raised, the Supreme Court held as follows. “It is true that the proviso to (i) of section 11(1) and the proviso to section 12(3) of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966 are intended for the protection of the tenant. “It is true that the proviso to (i) of section 11(1) and the proviso to section 12(3) of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966 are intended for the protection of the tenant. Nevertheless it will be easy to see that too strict and literal a compliance of their language would be impractical and unworkable. The proviso insists that before any amount of rent can be said to be in arrears, a notice has to be served through posts. All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgement due or otherwise) containing the tenant's correct address. Once he does this and the letter is delivered to the post office, he has no control over it. It is then presumed to have been delivered to the addressee under s. 27 of the General Clauses Act. Under the rules of the post office, the letter is to be delivered to the addressee or a person authorised by him. Such a person may either accept the letter or decline to accept it. In either case, there is no difficulty, for the acceptance or refusal can be treated as a service on, and receipt by, the addressee. The difficulty is where the postman calls at the address mentioned and is unable to contact the addressee or a person authorised to receive the letter. All that he can then do is to return it to the sender. The Indian Post Office Rules do not prescribe any detailed procedure regarding the delivery of such registered letters. When the postman is unable to deliver it on his first visit, the general practice is for the postman to attempt to deliver it on the next one or two days also before returning it to the sender. However, he has neither the power nor the time to make enquiries regarding the whereabouts of the addressee; he is not expected to detain the letter until the addressee chooses to return and accept it; and he is not authorised to affix the letter on the premises because of the assessee's absence. However, he has neither the power nor the time to make enquiries regarding the whereabouts of the addressee; he is not expected to detain the letter until the addressee chooses to return and accept it; and he is not authorised to affix the letter on the premises because of the assessee's absence. His responsibilities cannot, therefore, be equated to those of a process server entrusted with the responsibilities of serving the summons of a Court under Order V of the C.P.C. The statutory provision has to be interpreted in the context of this difficulty and in the light of the very limited role that the post office can play in such a task. If we interpret the provision as requiring that the letter must have been actually delivered to the addressee, we would be virtually rendering it a dead letter. The letter cannot be served where, as in this case, the tenant is away from the premises for some considerable time. Also, an addressee can easily avoid receiving the letter addressed to him without specifically refusing to receive it. He can so manipulate matters that it gets returned to the sender with vague endorsements such as "not found", "not in station", "addressee has left" and so on. It is suggested that a landlord, knowing that the tenant is away from station for some reasons, could go through the motions of posting a letter to him which he knows will not be served. Such a possibility cannot be excluded. But, as against this, if a registered letter addressed to a person at his residential address does not get served in the normal course and is returned, it can only be attributed to the addressee's own conduct. If he is staying in the premises, there is no reason why it should not be served on him”. But, in the above decisions, it is not dealt with that mere giving of proper address, prepaying and posting by registered post alone are sufficient to attract Section 27 of the General Clauses Act as observed in M/s. APARNA AGENCIES, HYDERABAD. Thereby the very same observations are subject to the observations made in M/s. MADAN & CO., D.VINOD SHIVAPPA v. NANDA (2006) 6 SCC 456 )and V.RAJA KUMARI v. P.SUBBARAM (2004) 8 SCC 774 ). 13. Thereby the very same observations are subject to the observations made in M/s. MADAN & CO., D.VINOD SHIVAPPA v. NANDA (2006) 6 SCC 456 )and V.RAJA KUMARI v. P.SUBBARAM (2004) 8 SCC 774 ). 13. In D.VINOD SHIVAPPA the learned Division Bench of the Supreme Court, under similar circumstances, considering the ambit of Section 138 N.I. Act with reference to Section 482 Cr. P.C. held that the return of a notice with endorsement “the addressee was not available” needed to be examined to ascertain whether the addressee managed to return the notice with that endorsement by reason of which it was not proper to quash the proceedings on that ground that being premature at that stage. The Supreme Court in fact observed and held. “(14.) If a notice is issued and served upon the drawer of the cheque, no controversy arises. Similarly if the notice is refused by the addressee, it may be presumed to have been served. This is also not disputed. This leaves us with the third 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. etc. 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 scarce for sometime after issuing the cheque so that the requisite statutory notice can never be served upon him and consequently he can never be prosecuted. There is good authority to support the proposition that once the complainant, 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. 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 return of the cheque as unpaid. He is, therefore, bound to issue the legal notice which may be returned with an endorsement that the addressee is not available on the given address. (15.) We cannot also lose 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 pre-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. Therefore, it would be pre-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.” 14. In V.RAJAKUMARI, the Apex Court observed similarly while dealing similar case where the notice sent could not be served on account of locking of the door of the house of the drawer. The Apex Court held. “The principle incorporated in Section 27 of the General Clauses Act would apply to a notice sent by post and is for the drawer to prove that it was not really served and that he was not responsible for such non-service. It is not uncommon for a drawer to take a plea the complainant has managed to get a false postal endorsement with an ulterior motive to prosecute ‘an innocent or bona fide drawer’. Unless, there is any very special reason such a contention should be rejected. Because, ordinarily the complainant wants the cheque amount and not ‘pound of flesh’. An honest drawer would at once tender money to show his bona fides. Of course he can also establish by evidence that said endorsement of ‘refusal’ or ‘unclaimed’ or ‘not found’ during delivery time to be false. Alternatively, he may pay the amount due and compound the matter.” 15. These observations of the Supreme Court are not controverted to the decisions cited about the rebuttal of presumption, whereas the observations contemplate that the question of survival or rebuttal of the presumption is to be decided on the basis of necessary evidence to be recorded only. In other words, these observations hold that it would be premature to conclude on the ground of return of the cover with endorsement “the address not available” that the presumption was not rebuttal. The observations narrated are very rational by reason of which, they are to be followed, particularly when they are not against the concept of rebutting the presumption. Both the parties are at liberty to take necessary steps in this behalf for meeting the ends of justice. 16. Therefore, both the criminal petitions in which sought to quash the proceedings on the ground of non-service of notices are dismissed as not tenable. Both the parties are at liberty to take necessary steps in this behalf for meeting the ends of justice. 16. Therefore, both the criminal petitions in which sought to quash the proceedings on the ground of non-service of notices are dismissed as not tenable. The miscellaneous petitions if any shall stand closed.