Madras High Court
V.Varadaraj vs V.Karuppiah Nadar on 10 April, 2007
Author: P. Murgesen
Bench: P. Murgesen
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 10/04/2007 CORAM THE HONOURABLE MR. JUSTICE P. MURGESEN Criminal Appeal No.297 of 2005 V.Varadaraj .. Appellant Vs 1.V.Karuppiah Nadar 2.K.Manoharan .. Respondents Criminal Appeal filed under Section 378(4) of Crl.P.C. against the Judgment of the Judicial Magistrate, Thirumangalam in C.C.No.1454 of 1999 dated 7.6.2005. !For Appellant : Mr.D.Rajendiran ^For Respondents : Mr.M.Ajmalkhan :J U D G M E N T
The appeal is directed against the Judgment of the Judicial Magistrate, Thirumangalam in C.C.No.1454 of 1999 dated 7.6.2005.
2.The brief facts of the case of the complainant are as follows:
a)The first accused is a Commission Agent and the second accused is his partner in the business. The complainant used to purchase the agricultural grains from the nearby villages in bulk quantities and handover the same to the first accused for sale. The first accused used to sell those grains and handover the amount due to the complainant after deducting his commission. It is alleged in the complaint that during November 1998, the complainant handed over the agricultural produce to the accused for sale and the accused is liable to return a sum of Rs.4,86,000/- after deducting his commission. So, in order to discharge a sum of Rs.4,86,000/-, the accused gave two cheques bearing Nos.257282 & 257283 drawn on Tamil Nadu Mercantile Bank Ltd. for a sum of Rs.2,43,000/- each.
b)The second accused was incharge of the Partnership Firm. When the cheques were presented for collection to the Canara Bank, Kallikudi Branch on 27.5.1999, the same were returned on 1.6.1999 with an endorsement 'Funds insufficient'. Hence on 8.6.1999, the complainant sent a lawyer notice to the accused demanding a sum of Rs.4,86,000/- with interest.
Eventhough the Postman concerned informed about the notice to the accused on 10.6.1999, the notice sent by post was returned with a postal endorsement as 'unclaimed'. Hence the complaint.
3.The complainant in order to bring home the charges against the accused, examined P.Ws 1 to 3 and filed Ex.P1 to P17. On the side of defence, the second accused was examined as D.W.1 and they have not chosen to file any documentary evidence.
4.On consideration of the entire evidence on record, the learned Judicial Magistrate, Thirumangalam, found the accused not guilty and acquitted them of the charges levelled against them.
5.Challenging the judgment of the learned Judicial Magistrate, Thirumangalam, the above appeal has been preferred by the complainant /appellant.
6.Point for Determination:
1.whether the respondents/accused have committed the offence under Section 138 of the Negotiable Instruments Act ?
POINTS FOR DETERMINATION:
7.The learned trial Court rejected the case of the complainant on two grounds namely that there was no valid notice and there was no enforceable debt.
8.P.W.1-Varadharaj had dealings with the respondents/ accused. The complaint was instituted on the basis of the two cheques Exs P1 and P2. According to the complainant, the first accused is a Commission Agent and the second accused is his partner in the business. The accused used to get the agricultural grains from the complainant in bulk quantity, sell those grains and handover the amount due to the complainant after deducting his commission. It is also alleged that the respondents have dealing with the complainant till 1998.
9.But in paragraph No.4 of the complaint it is specifically stated that the first accused received the agricultural produce from the complainant and after deducting the commission, he is liable to pay a sum of Rs.4,86,000/-. So, in order to discharge the liability, he handed over two cheques bearing Nos.257282-Ex.P1 & 257283-Ex.P2 drawn on Tamil Nadu Mercantile Bank Ltd. for a sum of Rs.2,43,000/- each. The Account No of the accused is 301156. The cheques were issued by the accused. This was spoken by P.W.3 who was the Assistant Manager of the Tamil Nadu Mercantile Bank. The cheques were presented through Canara Bank in which the complainant had his Bank Account. The cheques were sent to Mercantile Bank for collection, but the same were dishonoured. P.W.2 who is the Branch Manager of Canara Bank spoke about the dishonour of the cheques. Therefore, a lawyer's notice -Ex.P8 was issued to the accused. Ex.P9 series is the postal receipts. Ex.P10 would show that the accused refused to receive the notice issued by the complainant.
10.It is the specific case of the learned counsel for the respondents that there was no legally enforceable debt as on date and therefore, the complainant cannot succeed.
11.The learned counsel for the complainant in support of his contentions pointed out the decision of the Supreme court in K.N.BEENA Vs. MUNIYAPPAN AND ANOTHER reported in 2001(4) CTC 382, wherein in paragraph Nos. 6 & 7 it was held as follows:
"6.In our view the impugned Judgment cannot be sustained at all. The Judgment erroneously proceed on the basis that the burden of proving consideration for a dishonoured cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Sections 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebutable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P.Dalal v.Bratindranath Banerjee, 2001(3) CTC 243: 2001(6) S.C.C. 16 it has also taken an identical view.
7.In this case, admittedly the 1st Respondent has led no evidence except some formal evidence. This High Court appears to have proceeded on the basis that the denials/averments in his reply dated 21st May, 1993 were sufficient to shift the burden of proof onto the Appellant/complainant to prove that the cheque was issued for a debt or liability. This is an entirely erroneous approach. The 1st Respondent had to prove in the trial, by leading cogent evidence, that there was no debt or liability. The 1st Respondent not having led any evidence could not be said to have discharged the burden of proving that the cheque was not issued for a debt or liability, the conviction as awarded by the Magistrate was correct. The High court erroneously set aside that conviction."
So, the accused must prove that the cheques were not issued for the debt or liability mentioned in the complaint. But, in view of presumptions contained in Sections 118 and 139 of the Act, the Court has to presume that the cheques have been issued for debt or liability and the presumption is rebutable. Therefore, the accused has to prove that those cheques were not issued for the above said debt or liability.
12.To substantiate the case, the complainant filed Ex.P14-copy of the Statement of Account to show that the accused had business dealing with him till 22.1.1998. But the complainant is not able to say that there was a business transaction between the parties during November 1998 as claimed by him in the complaint. Ex.P14 would falsify the case of the complainant since the accused had not purchased any agricultural grains in November 1998.
13.Evidence of P.W.1 would show that those cheques were not issued for the business transactions entered between the parties during November 1998 and those cheques were issued for the amount due to the complainant as per the Statement in Ex.P14, i.e. for the business transactions prior to November 1998. Hence, it is clear that there is no legally enforceable debt as claimed by the complainant for the liability due to him as per the complaint. Therefore, it is clear that the accused did not purchase any commodity or articles during November 1998 and hence the above said cheques could not have been issued for that liability. There was no enforceable debt.
14.So far as the validity of the notice is concerned, it is the specific case of the complainant that the accused willfully evaded to receive the notice- Ex.P8. The said notice was addressed to the first respondent. The address of the respondent was shown as 718, Periakulam Road, Theni. R.W.1 admitted that the address shown in the postal cover is correct. So, it is clear that the letter was sent to the correct address. Here the notice was returned as 'unclaimed' and not as 'refused'.
15.Will there be any significant difference between the two so far as the presumption of service is concerned ? In this connection a reference to Section 27 of the General Clauses Act will be useful. The Section reads thus:
"27.Meaning of service by post:- Where any Central Act or Regulation made after the commencement of this Act authorizes 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."
16.No doubt Section 138 of the Act does not require that the notice should be given only by "post". Nonetheless the principle incorporated in Section 27 can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such non-service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to strategy of subterfuge by successfully avoiding the notice.
17.The learned counsel for the appellant/complainant further relied on the case in HARCHAN SINGH Vs. SMTSHIVARANI AND ORS reported in 1981 (2) SCC 535 and JAGDISH SINGH Vs. NATTHU SINGH reported in 1992(1) SCC 647, wherein Hon'ble Supreme Court has observed that a notice refused to be accepted by the addressee can be presumed to have been served on him.
18.In the above said case, the Hon'ble Supreme Court found that when the notice is returned as unclaimed and not refused, such date would be the commencing date in reckoning the period of 15 days contemplated in clause (d) to the proviso of Section 138 of the Act. As per the above said decision, eventhough if the notice is returned as 'unclaimed' and not as refused, it can be treated as a valid notice.
19.Further, in AMBUR STEEL TRADERS Vs. ENGINEER C.NOORULLA reported in 2002(3) CTC 96, it was observed that when notice was despatched by post, the presumption is that it was served unless it is proved that it was not really served and that he was not responsible for such non-service. So, in this case, also it was found that if the notice was refused to be accepted by the addressee, the presumption is that notice was served on him.
20.Therefore, it is clear that the respondents/accused have knowledge of the notice and they willfully refused to claim it. Hence, I am of the view that there is a valid notice in this case. However, since there was no legally enforceable debt as claim by the complainant, the complainant cannot succeed. Hence, the point is answered against the appellant.
21.Therefore, the appeal filed by the appellant/ complainant fails and the same is dismissed, confirming the order of acquittal passed by the Judicial Magistrate, Thirumangalam in C.C.No.1454 of 1999 dated 7.6.2005.
rpa To The Judicial Magistrate, Thirumangalam.