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Madhya Pradesh High Court · body

2014 DIGILAW 623 (MP)

Satyendra Tiwari v. State of M. P.

2014-06-05

SUBHASH KAKADE

body2014
Judgment: Subhash Kakade, J. 1. This petition under Section 378(4) of Cr.PC for grant of leave to appeal has been filed by the applicant/complainant against the impugned judgment dated 23-4-2010, passed in Private Complaint Case No. 517/2006, by the learned Judicial Magistrate First Class, Jabalpur acquitting the respondent No. 2, hereinafter referred as "the accused" for the offence punishable under Section 138 of Negotiable Instruments Act, 1881; hereinafter referred to as "NI Act". Short facts of the case are that on 14-9-2005, the accused issued a cheque amounting to Rs. 48,000/- in favour of the complainant. The complainant presented the cheque through his Banker Dena Bank and the same has been returned with an endorsement "Funds insufficient". In spite of duly served legal notice of demand the accused did not return the amount of cheque. 2. The learned Trial Court on the basis of affidavit of the complainant and documentary evidence passed the order for registration of complaint. Accused abjured his guilt. His further plea was that he has been falsely roped in this complaint. The complainant, to substantiate the charge against the accused examined himself as P.W. 1 and witness Aashish Namdeo (P.W. 2) and exhibited impugned cheque with endorsement memo, unserved notice with AD and postal receipt as Exh. P-1 to Exh. P-4 respectively. Civil Jorge (D.W. 1) examined as defence witness. 3. On consideration of oral as well as documentary evidence learned Trial Court acquitted the accused as mentioned above. 4. Learned Counsel for the applicant mainly based his arguments on two counts that the learned Trial Court firstly, wrongly held that the complainant did not make serious effort to serve the notice on the accused and secondly, also wrongly held that there was no seal of bank found on endorsement memo. He further submitted that as per provisions of Section 146 of NI Act, the Court has to presume that memo issued by the Bank is proper and valid, unless rebuttal, by the accused. Finally, it is submitted by the learned Counsel for the applicant that the learned Trial Court has failed to appreciate the evidence in proper prospect and committed grave error and arrived at wrong conclusion resulting acquitting the accused, hence the impugned judgment is illegal and contrary to the provision of law. 5. Finally, it is submitted by the learned Counsel for the applicant that the learned Trial Court has failed to appreciate the evidence in proper prospect and committed grave error and arrived at wrong conclusion resulting acquitting the accused, hence the impugned judgment is illegal and contrary to the provision of law. 5. Having heard the learned Counsel for the appellant and after perusing the entire record this Court is of the view that the learned Trial Court has not committed any error in acquitting the accused. 6. The object of promulgate the Negotiable Instruments Act, containing Sections 138 to 142 by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 was to promoting and inculcating faith in the efficacy of banking system and its operations and giving credibility to negotiable instruments in business transaction. In developing countries like ours importance of the banking system is need not to be required ornamental words. The introduction of these provisions 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 NI Act was enacted to punish those unscrupulous persons, who purported to discharge their liability by issuing cheques without really intending to do so. Apart from civil liability, criminal liability is sought to be imposed by the said provision on such unscrupulous drawers of cheques. Therefore, while construing the provision, the object of the legislation has to be borne in mind. 7. In other words, these provisions have been introduced to give the better credibility to our trade, business, commerce and industry, which is absolutely imperative in view of the growing international trade and business. The constitutional validity of these provisions have been upheld by the Apex Court. Protective Umbrella for honest drawer: 8. 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 NI Act has been made subject to certain conditions. The object of notice is to give a chance to the drawer of the cheque to rectify his omission and also to protect an honest drawer. 9. The object of notice is to give a chance to the drawer of the cheque to rectify his omission and also to protect an honest drawer. 9. The first condition is stipulated in the proviso (b) of the Section 138 of the NI Act is service of notice of demand, which is a condition precedent for filing a complaint under Section 138 of the NI Act. Under this clause (b) of the proviso, 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. 10. The second condition is stipulated under clause (b) of the proviso of the Section 138 of the NI Act, the drawer of the cheque is given a period of fifteen days 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. 11. The object of above noted both provisos is to give an statutory protection against 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 NI Act. Therefore, the observance of stimulations in clause (b) and its aftermath in clause (c) being a pre-condition for invoking Section 138 of the NI Act, giving a notice to the drawer before filing complaint under Section 138 of the NI Act is a mandatory provision. 12. Once the cheque is issued by the drawer, a presumption under Section 139 of the NI Act will follow. Presentation of the cheque in the bank is the next step. 13. 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. 14. The drawer of the cheque is given a period of 15 days from the date of receipt of the notice to make the payment and only if he fails to make the payment then the drawer of the cheque can be held responsible under Section 138 of the NI Act. 15. 14. The drawer of the cheque is given a period of 15 days from the date of receipt of the notice to make the payment and only if he fails to make the payment then the drawer of the cheque can be held responsible under Section 138 of the NI Act. 15. Drawer refused to receive notice: Where drawer had refused to receive notice, even then complaint to be filed after expiry of fifteen days from the date of receipt of notice. 16. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the Trial 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, the complaint is liable to be rejected. 17. Therefore, the object of notice is clear that to give a chance to the drawer of the cheque to rectify his omission and also to protect an honest drawer. Service of notice of demand is a condition precedent for filing of complaint. Notice of demand is mandatory. 18. No doubt Section 138 of the NI Act does not require that the notice should be given only by post. The notice may be sent either through Counsel or directly by the payee or the holder in due course stating dishonour of cheque, demanding payment of the cheque amount and intimating that non-compliance would result in initiating legal action. 19. There is no bar for a person sending the notice of dishonour both by Certificate of Posting and also by Registered Post. What all Section 138 of the Act requires is sending of notice in writing to the drawer of the cheque demanding payment of the amount covered by the dishonoured cheque. The section does not lay down that the notice of dishonour should be sent by Registered Post only. In several cases drawers of the cheques, to whom statutory notices of dishonour are sent by Registered Post, manage to evade service of the notice, by getting an endorsement made by the postman that they are not available or absent or that the door is locked for seven days. In several cases drawers of the cheques, to whom statutory notices of dishonour are sent by Registered Post, manage to evade service of the notice, by getting an endorsement made by the postman that they are not available or absent or that the door is locked for seven days. Obviously with a view to get over of such return of notice sent by Registered Post, statutory notice would be sent by Certificate of Posting and also by Registered Post Acknowledgment Due. Whenever a notice is sent by Certificate of Posting, a presumption under the provisions of Section 114 of Evidence Act, Illustration (f) and Section 27 of General Clauses Act, 1897 would be that the letter sent under Certificate of Posting was received by the addressee, and also that notice is duly served. But, as the presumption is rebuttable one. 20. On the part of the payee he has to make a demand by "giving a notice" in writing. If that was the only requirement to complete the offence on the failure of the drawer to pay the cheque amount within 15 days from the date of such 'giving', the travails of the prosecution would have been very much lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days of the cheque amount within 15 days from the date of such 'giving', the travails of the prosecution would have been very much lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days of the receipt of the said notice. It is, therefore, clear that "giving notice" in the context is not the same as receipt of notice. Giving is a process of which receipt is the accomplishment. 21. The words in clause (b) of the proviso to Section 138 of the NI 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 send 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. 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 send 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. It is for the payee to perform the former process by sending the notice to the drawer at the correct address. 22. 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 NI Act. It must be borne in mind that the Court should not adopt an interpretation which helps a dishonest evader, and clips an honest payee as that would defeat the very legislative measure. 23. The statutory scheme unmistakably shows that the burden is on the complainant to show the service of notice and also that the accused has managed to get an incorrect postal endorsement made. 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 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. 24. Here the notice is returned as addressee being not found and not as refused. True, that the notice was sent at the correct address of the drawer of the cheque by registered post acknowledgment due. 25. In the case at hand, it is clear that notice was sent on correct address of the drawer also within time as per provisions under Section 138 Proviso (b) of the NI Act. True, that the notice was sent at the correct address of the drawer of the cheque by registered post acknowledgment due. 25. In the case at hand, it is clear that notice was sent on correct address of the drawer also within time as per provisions under Section 138 Proviso (b) of the NI Act. Postman tried to deliver the notice on several dates and finally it was returned with the remark that the addressee not available hence not served. 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. 26. Learned Trial Court after appreciation of evidence available on record categorically held that though notice received unserved with AD receipt (Exh. P-4) as addressee not found, but thereafter, the complainant did not make concrete efforts to serve the notice on the accused. 27. After perusing the record carefully in light of above discussed facts and circumstances, in the light of the object of promulgate the NI Act and mandatory statutory provisions of Section 138 of the NI Act, it is crystal clear that the learned Trial Court has rightly appreciated the evidence, hence the finding of learned Trial Court for non-service of demand notice does not require any interference. Endorsement Memo: 28. Another reason given by the learned Court to acquit the accused was that the complainant failed to prove the submission of cheque (Exh. P-1) in the bank. 29. When a cheque is drawn by a person on an account maintained by him for payment of any amount or discharge of liability or debt and is returned by the bank with endorsement like (i) refer to drawer, (ii) exceeds arrangement, (iii) instruction for stoppage of payment; (iv) fund insufficient and like other usual endorsements, it amounts to dishonour within the meaning of Section 138 of the NI Act. 30. Cheque to be presented within six months from the date of cheque to the bank on which it was drawn and if it is presented beyond that time complaint is not maintainable. In this case in hand, the cheque (Exh. P-1) was presented within time. 31. 30. Cheque to be presented within six months from the date of cheque to the bank on which it was drawn and if it is presented beyond that time complaint is not maintainable. In this case in hand, the cheque (Exh. P-1) was presented within time. 31. In fact, learned Trial Court initially committed grave mistake while issuing summons for appearance of the accused on the assumption that prima facie case has been disclosed while bankers seal was totally missing of the bankers written memo in such circumstances the summons was not required to issue against the accused. 32. Learned Trial Court after scrutinising statement of the complainant in this regard and after examining the cheque (Exh. P-1) with returning endorsement (Exh. P-2) found that there is absolutely lack of banker's seal on endorsement memo (Exh. P-2). 33. It is pertinent to mention here that even after committing initial error learned Trial Court given appropriate opportunity to the complainant to examine Manager or any authorised officer of the Punjab and Sindh Bank, the Bankers who returned the cheque (Exh. P-1) vide their endorsement memo (Exh. P-2) under the caption "Fund Insufficient", but the complainant fail to comply. In such a situation, endorsement memo (Exh. P-2) has no evidentiary value as public document, but mere piece of paper. 34. The learned Counsel for the applicant could not point out any other illegality or perversity in the impugned judgment as discussed above. It is a well-settled principle of law that unless the judgment of acquittal is palpably wrong and grossly unreasonable, interference in the application for leave to file appeal by private complainant is not called for. The application for grant of leave to appeal is, therefore, dismissed summarily.