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2014 DIGILAW 1372 (AP)

K. Jayalalitha v. State of A. P.

2014-11-12

T.SUNIL CHOWDARY

body2014
ORDER T. Sunil Chowdary, J. 1. This petition is filed under Section 482 Cr.P.C. to quash the proceedings against the petitioners/A1 and A2 in C.C. No. 1475 of 2010 on the file of IX Metropolitan Magistrate Court, Cyberabad at Kukatpally. 2. Learned counsel for the petitioners submitted that return of postal cover sent to correct address of the second respondent with an endorsement "not claimed" would amount to service of notice. 3. A perusal of the record reveals that on 19.11.2010, this court permitted the petitioners' counsel to take out personal notice to the second respondent and file proof of service. In pursuance thereof, the learned counsel for the petitioners has sent notice to second respondent and the same was returned with postal endorsement "not claimed". For better clarification, the address furnished by the second respondent in his complaint and the address to which the petitioners sent notice are furnished in the following table: Address mentioned by the second respondent in his complaint Address to which the petitioners sent notice by post K. Ramesh, S/o. K. Narayana, Aged 45 yrs, Occ: Proprietor of M/s Sri Rama Agencies, R/o Plot No. 413, Vivekanandanagar, Kukatpally, Hyderabad. K. Ramesh, S/o. K. Narayana, Proprietor, M/s Sri Rama Agencies, R/o Plot No. 413, Vivekananda Nagar Colony, Kukatpally, Hyderabad - 500 072. 4. From the above table, it is clear that the notice was sent to the correct address of the second respondent, as mentioned in his complaint. In support of the contention, learned counsel for the petitioners has drawn my attention to the decision in K. Sajjan Raj v. Gopi Setty Chandra Mouli 2011 (4) ALD 96 . As per the principle enunciated therein, when a notice has been sent to the correct address of the party and when the same has been returned as "not claimed", same amounts to service of notice. To resolve the issue, this court is placing reliance on the decision in C.C. Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555 , wherein the Hon'ble apex court held as follows: "Section 27 of General Clauses Act 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 a registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, 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." 5. In the light of the settled legal position and having regard to the facts and circumstances of the case, I am of the view that notice is duly served on the second respondent. Since the second respondent did not make appearance, after duly served with notice in this petition, the matter can be decided on merits. 6. The next contention of learned counsel for the petitioners is that the trial court has taken cognizance of offence against the petitioners in contravention of the provisions of Section 138 of Negotiable Instruments Act, 1881 (for short, the Act). 7. The uncontroverted facts that lead to filing of the present petition, briefly, are as follows: The petitioners issued three cheques bearing Nos. 762244, dated 25.11.2009 for an amount of Rs. 2.00 lakhs; 762245, dated 05.12.2009 for an amount of Rs. 3,49,800/-; and 762246, dated 15.12.2009 for an amount of Rs. 3.00 lakhs drawn on Andhra Bank, Marredpally Branch, in favour of the second respondent. The second respondent presented the cheques in Canara Bank, Vivekanandanagar, Hyderabad for collection. The cheques were returned on 17.3.2010 with an endorsement "payment stopped by drawer". The second respondent got issued statutory notice on 02.4.2010 calling upon the petitioners to pay the amount covered under the cheques within 15 days from the date of receipt of the notice. The petitioners have received the notice on 06.4.2010 and acknowledged the same. The petitioners, except got issuing reply notice on 15.4.2010, did not choose to pay the amount covered under the cheques. The petitioners have received the notice on 06.4.2010 and acknowledged the same. The petitioners, except got issuing reply notice on 15.4.2010, did not choose to pay the amount covered under the cheques. Having no other alternative, the second respondent filed the complaint against the petitioners for the offence punishable under Section 138 of the Act. 8. It is a settled principle of law that the court can take cognizance of offence if the uncontroverted allegations made in the complaint make out a prima facie case. Section 142 of the Act prescribes the procedure to be followed by the court before taking cognizance of offence punishable under Section 138 of the Act. Strict compliance of the provisions of Section 138 of the Act is sine qua non to take cognizance under Section 142 of the Act. Section 142 of the Act empowers a Metropolitan Magistrate or a Judicial Magistrate of First Class to take cognizance of offence under Section138 of the Act. It is not out of place to extract hereunder Provisos (b) and (c) of Section 138 of the Act, which read as under: "138. Dishonour of cheque for insufficiency, etc., of funds in the account:-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, 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." 9. Section 138(c) of the Act mandates that the payee or the holder in due course of the cheque has to wait for a period of fifteen days from the date of receipt of notice by the drawer of the cheque. The underlying object of granting fifteen days time under Section 138(c) of the Act is to afford reasonable opportunity to the drawer of the cheque to pay the amount to the payee or holder in due course, as the case may be. The underlying object of granting fifteen days time under Section 138(c) of the Act is to afford reasonable opportunity to the drawer of the cheque to pay the amount to the payee or holder in due course, as the case may be. If for one reason or the other, the drawer of the cheque fails to pay the amount covered under the cheque in question within fifteen days of the receipt of statutory notice, then only cause of action accrues in favour of the complainant to initiate proceedings under Section 138 of the Act. To put it in different way, the drawer of the cheque is deemed to have committed the offence punishable under Section 138 of the Act, immediately, after expiry of fifteen days from the date of receipt of notice by him. A fascicular reading of Section 138(c) and Section 142(b) of the Act clearly demonstrates that the complaint has to be filed within one month from the date of accruing of cause of action in favour of the complainant. The court is not empowered to take on file the case or take cognizance of offence prior to arising of cause of action in favour of the complainant. 10. The crucial question that falls for consideration is how the period of fifteen days time has to be reckoned. Section 9 of the General Clauses Act reads as follows: "9. Commencement and termination of time : (1) In any Central Act or Regulation made after the commencement of this Act, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time to use the word "from", and, for the purpose of including the last in a series of days or any other period of time, to use the word "to". (2) This section applies also to all Central Acts made after the third day of January, 1868, and to all Regulations made on or after the fourteenth day of January, 1887." 11. A perusal of Section 9, at a glance, gives a clue for reckoning the period of limitation. For the purpose of reckoning the period, first day in a series of days has to be excluded as enumerated under Section 9 of General Clauses Act. A perusal of Section 9, at a glance, gives a clue for reckoning the period of limitation. For the purpose of reckoning the period, first day in a series of days has to be excluded as enumerated under Section 9 of General Clauses Act. Therefore, the day i.e., 06.4.2010 on which the notice was served on the petitioners has to be excluded for calculating fifteen days time. The Hon'ble apex court in Saketh India Limited v. India Securities Limited (1999) 3 SCC 1 held that "the period of one month for filing the complaint will be reckoned from the day immediately following the day on which the period of 15 days from the date of the receipt of the notice by the drawer expires". In SIL Imports, USA v. Exim Aides Silk Exporters (1999) 4 SCC 567 it was held that "on the date when the notice sent by fax reached the drawer of the cheque the period of 15 days (within which he has to make the payment) has started running and on the expiry of that period the offence is completed unless the amount has been paid in the meanwhile". In view of the divergent views expressed by the same Division Bench in two different cases, the matter was referred to Full Bench. In Econ Antri Ltd. V. Rom Industries Ltd. 2013 SCC On Line SC 765 : AIR 2013 SC 3283 : 2013 (10) SCALE 555, after analysing the case law on the subject and the provisions of relevant enactments, the Full Bench of Hon'ble Supreme Court held as follows: "25. Having considered the question of law involved in this case in proper perspective, in light of relevant judgments, we are of the opinion that Saketh lays down the correct proposition of law. We hold that for the purpose of calculating the period of one month, which is prescribed under Section 142(b) of the N.I. Act, the period has to be reckoned by excluding the date on which the cause of action arose. We hold that SIL Import USA does not lay down the correct law. Needless to say that any decision of this Court which takes a view contrary to the view taken in Saketh by this Court, which is confirmed by us, do not lay down the correct law on the question involved in this reference. The reference is answered accordingly. (emphasis supplied) 12. Needless to say that any decision of this Court which takes a view contrary to the view taken in Saketh by this Court, which is confirmed by us, do not lay down the correct law on the question involved in this reference. The reference is answered accordingly. (emphasis supplied) 12. The basic provisions of law involved in Section 138(c) and Section 142(b) of the Act are one and the same. The principle, i.e., the date on which cause of action arose has to be excluded for the purpose of calculation, enunciated in Econ Antri Ltd., equally applies for reckoning of fifteen days time as postulated under Section 138(c) of the Act. 13. Let me consider the facts of the case on hand in the light of the principle enunciated in the case cites supra. A perusal of the record reveals that the petitioners have received statutory notice on 06.4.2010, the second respondent filed the complaint on 21.4.2010 and on the same day the trial court recorded sworn statement of the complainant. In arithmetical exactitude, second respondent filed complaint on 15th day of receipt of notice by the petitioners. Admittedly, the second respondent filed the complaint on 21.4.2010. Basing on the material available on record and in view of Section 9 of General Clauses Act as well as the principle in Econ Antri Ltd., the court can safely arrive at a conclusion that the second respondent has filed the complaint before arising of cause of action in his favour. 14. A perusal of the record clearly reveals that the court has taken cognizance of offence under Section 138 of the Act, against the petitioners, on 23.10.2010. It is not in dispute that trial court has taken cognizance of offence after expiry of 15 days from the date of receipt of notice by the petitioner. The crucial question to be addressed by this court is "Whether taking of cognizance of offence on 23.10.2010 would automatically cure the defect of premature filing of complaint". A Division Bench of this court had the occasion to consider the legality of premature complaint in N. Venkata Sivarama Prasad v. Rajeswari Constructions 1996 Cri.L.J. 3409 and it was held as follows: "15. Under Section 138, until and unless the criteria laid down therein are complied with, it would not constitute an offence. A Division Bench of this court had the occasion to consider the legality of premature complaint in N. Venkata Sivarama Prasad v. Rajeswari Constructions 1996 Cri.L.J. 3409 and it was held as follows: "15. Under Section 138, until and unless the criteria laid down therein are complied with, it would not constitute an offence. Proviso (c) clearly stipulates that the Section does not apply unless the drawer of the cheques fails to make the payment to the payee within 15 days of the receipt of the said notice. Thus, the payee has been given liberty to make the payment within 15 days of the receipt of the notice even though the cheque was returned by the Bank unpaid. Hence, the reading of Proviso (c) to Section 138 clearly denotes that it would not be an offence if the drawer pays the amount within a period of 15 days as a specified therein. In such circumstances, there could not have been any complaint alleging the violation of Section 138. The pre-offence period granted to the payee should be construed strictly, otherwise the very purpose of Section 138(c) of the Negotiable Instruments Act would be frustrated. The complainant should be able to point out to the offence under Section 138 when the complaint was filed. When the complaint is filed even before the offence is completed, it cannot be said that the offence is made out and, therefore, such complaint is invalid in the eye of law. As already noticed, under Section 142 of the Act, no Court shall take cognizance of any offence punishable under Section 138, except upon a complaint in writing made by the payee. Therefore, the necessary ingredient enabling the Magistrate to take cognizance of the offence is that there should be a complaint in writing by the payee and the said complaint should disclose an offence under Section 138. ... ... 16. ... ... ... The subsequent events on completion of the offence can only come to the knowledge of the Court by way of complaint in writing. Apart from the original complaint which does not disclose any offence, there is no further complaint. As rightly pointed out by the learned Additional Public Prosecutor, when the special law specifies not only the ingredients of the offence but also the procedure, the requirements have to be strictly complied with. Apart from the original complaint which does not disclose any offence, there is no further complaint. As rightly pointed out by the learned Additional Public Prosecutor, when the special law specifies not only the ingredients of the offence but also the procedure, the requirements have to be strictly complied with. Hence, we are of the opinion that the Court cannot proceed with the case even after the lapse of time as prescribed by Section 138(c) of Negotiate Instruments Act." 15. As per the principle enunciated in the case cited supra, the court cannot proceed with trial, basing on premature complaint, on the ground that cognizance of offence was taken after expiry of fifteen days time as prescribed under Section 138(c) of the Act. Sri C. Raghu, learned counsel for the petitioners strenuously submitted that the trial court has committed an illegality while taking cognizance of offence against the petitioner under Section 138 of the Act basing on the premature complaint. He further submitted that continuation of the criminal proceedings against the petitioners is not legally sustainable. In support of the contention, he has drawn my attention to Yogendra Pratap Singh v. Savitri Pandey 2014 SCC On Line SC 744 wherein the Full Bench of Hon'ble Supreme Court has formulated the following two questions: "i. Can cognizance of an offence punishable under Section 138 of the Negotiable Instruments Act 1881 be taken on the basis of a complaint filed before the expiry of the period of 15 days stipulated in the notice required to be served upon the drawer of the cheque in terms of Section 138(c) of the Act aforementioned? And, ii. If answer to question No. 1 is in the negative, can the complainant be permitted to present the complaint again notwithstanding the fact that the period of one month stipulated under Section 142(b) for the filing of such a complaint has expired?" 16. While answering the above questions, it was held as follows: "37. A complaint filed before expiry of 15 days from the date on which notice has been served on drawer/accused cannot be said to disclose the cause of action in terms of clause (c) of the proviso to Section 138 and upon such complaint which does not disclose the cause of action the Court is not competent to take cognizance. A complaint filed before expiry of 15 days from the date on which notice has been served on drawer/accused cannot be said to disclose the cause of action in terms of clause (c) of the proviso to Section 138 and upon such complaint which does not disclose the cause of action the Court is not competent to take cognizance. A conjoint reading of Section 138, which defines as to when and under what circumstances an offence can be said to have been committed, with Section 142(b) of the NI Act, that reiterates the position of the point of time when the cause of action has arisen, leaves no manner of doubt that no offence can be said to have been committed unless and until the period of 15 days, as prescribed under clause (c) of the proviso to Section 138, has, in fact, elapsed. Therefore, a Court is barred in law from taking cognizance of such complaint. It is not open to the Court to take cognizance of such a complaint merely because on the date of consideration or taking cognizance thereof a period of 15 days from the date on which the notice has been served on the drawer/accused has elapsed. We have no doubt that all the five essential features of Section 138 of the NI Act, as noted in the judgment of this Court in Kusum Ingots & Alloys Ltd. v. Pennar Paterson Securities Ltd., AIR 2000 SC 954 : (2000) 2 SCC 745 , and which we have approved, must be satisfied for a complaint to be filed under Section 138. If the period prescribed in clause (c) of the proviso to Section 138 has not expired, there is no commission of an offence nor accrual of cause of action for filing of complaint under Section 138 of the NI Act. 38. If the period prescribed in clause (c) of the proviso to Section 138 has not expired, there is no commission of an offence nor accrual of cause of action for filing of complaint under Section 138 of the NI Act. 38. We, therefore, do not approve the view taken by this Court in Narsingh Das Tapadia v. Goverdhan Das Partani, (2000) 7 SCC 183 , and so also the judgments of various High Courts following Narsingh Das Tapadia that if the complaint under Section 138 is filed before expiry of 15 days from the date on which notice has been served on the drawer/accused the same is premature and if on the date of taking cognizance a period of 15 days from the date of service of notice on the drawer/accused has expired, such complaint was legally maintainable and, hence, the same is overruled. 39. Rather, the view taken by this Court in Sarav Investment & Financial Consultancy v. Lloyds Register of Shipping Indian Office Staff Provident Fund, (2007) 14 SCC 753 wherein this Court held that service of notice in terms of Section 138 proviso (b) of the NI Act was a part of the cause of action for lodging the complaint and communication to the accused about the fact of dishonouring of the cheque and calling upon to pay the amount within 15 days was imperative in character, commends itself to us. As noticed by us earlier, no complaint can be maintained against the drawer of the cheque before the expiry of 15 days from the date of receipt of notice because the drawer/accused cannot be said to have committed any offence until then. We approve the decision of this Court in Sarav Investment & Financial Consultancy and also the judgments of the High Courts which have taken the view following this judgment that the complaint under Section 138 of the NI Act filed before the expiry of 15 days of service of notice could not be treated as a complaint in the eye of law and criminal proceedings initiated on such complaint are liable to be quashed. 40. Our answer to question (i) is, therefore, in the negative. 41. 40. Our answer to question (i) is, therefore, in the negative. 41. The other question is that if the answer to question (i) is in the negative, can the complainant be permitted to present the complaint again notwithstanding the fact that the period of one month stipulated under Section 142(b) for the filing of such a complaint has expired. 42. Section 142 of the NI Act prescribes the mode and so also the time within which a complaint for an offence under Section 138 of the NI Act can be filed. A complaint made under Section 138 by the payee or the holder in due course of the cheque has to be in writing and needs to be made within one month from the date on which the cause of action has arisen under clause (c) of the proviso to Section 138. The period of one month under Section 142(b) begins from the date on which the cause of action has arisen under clause (c) of the proviso to Section 138. However, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within the prescribed period of one month, a complaint may be taken by the Court after the prescribed period. Now, since our answer to question (i) is in the negative, we observe that the payee or the holder in due course of the cheque may file a fresh complaint within one month from the date of decision in the criminal case and, in that event, delay in filing the complaint will be treated as having been condoned under the proviso to clause (b) of Section 142 of the NI Act. This direction shall be deemed to be applicable to all such pending cases where the complaint does not proceed further in view of our answer to question (i). As we have already held that a complaint filed before the expiry of 15 days from the date of receipt of notice issued under clause (c) of the proviso to Section 138 is not maintainable, the complainant cannot be permitted to present the very same complaint at any later stage. His remedy is only to file a fresh complaint; and if the same could not be filed within the time prescribed under Section 142(b), his recourse is to seek the benefit of the proviso, satisfying the Court of sufficient cause. His remedy is only to file a fresh complaint; and if the same could not be filed within the time prescribed under Section 142(b), his recourse is to seek the benefit of the proviso, satisfying the Court of sufficient cause. Question (ii) is answered accordingly." 17. As per the principle enunciated in Yogendra Pratap Singh and N. Venkata Sivarama Prasad, the complaint under Section 138 of the N.I. Act filed before the expiry of fifteen days of service of notice could not be treated as a complaint in the eye of law and criminal proceedings initiated on such complaint are liable to be quashed. The facts of the case on hand are almost identical to the facts of the cases cited supra. Having regard to the facts and circumstances of the case and also the principles enunciated in the cases cited supra, I have no hesitation to hold that the second respondent filed the complaint without strictly adhering to the procedure contemplated under Section 138 of the Act. Mere taking of cognizance of offence after expiry of 15 days time as stipulated under Section 138(c) of the Act would not cure the legal defect of premature complaint; therefore, continuation of the proceedings against the petitioners/A1 and A2 in C.C. No. 1475 of 2010 are not legally sustainable. Accordingly, the criminal petition is allowed quashing the proceedings against the petitioners/A1 and A2 in C.C. No. 1475 of 2010 on the file of IX Metropolitan Magistrate Court, Cyberabad at Kukatpally. Miscellaneous petitions, if any pending in the criminal petition, shall stand closed. Petition allowed