Madras High Court
B. Adhikari vs Ponraj on 4 July, 1995
Equivalent citations: [1999]96COMPCAS431(MAD), 1996CRILJ180
JUDGMENT N. Arumugham, J.
1. The petitioner Adhikari, being the accused in C.C. No. 6296 of 1991 on the file of the XVth Metropolitan Magistrate, George Town, Madras, for the offences under section 138 of the Negotiable Instruments Act 1881, found guilty and convicted thereon, however, who lost the appeal in Criminal Appeal No. 203 of 1994 on the file of the Additional Sessions Judge, Madras, on April 24, 1995, has come forward with this revision challenging the impugned judgment of the learned Sessions Judge confirming the judgment and sentence recorded by the trial court as above-referred.
2. For the purpose of his business the revision petitioner had a loan of Rs. 20,000 from the respondent herein and for the return of the same he had given a cheque to the respondent on July 5, 1991, which upon accounting was returned as dishonoured. On appraising of the said fact, the cheque was dishonoured on August 27, 1991. However, on September 2, 1991, a notice on behalf of the respondent was given to the revision petitioner demanding the payment of the said sum as his liability, which liability has been defined under the Act, which was returned as unserved with the endorsement "not found" on September 20, 1991. Hence, the respondent filed the complaint. After having taken the complaint on file and completing all the judicial formalities and recorded the adduced legal evidence on behalf of both parties, the learned trial magistrate found the revision petitioner/accused guilty of the offence under section 138 of the Negotiable Instruments Act and sentenced him to undergo simple imprisonment for a period of one year and also to pay a fine of Rs. 5,000 in default to undergo simple imprisonment for a period of one year further. In the appeal preferred by the accused/revision petitioner before the learned Additional Sessions judge, Madras, in C.A. No. 203 of 1994, on April 24, 1995, the learned appellate under, after having reappraised the whole evidence, dismissed the appeal by confirming the conviction and sentence recorded by the trial court. Aggrieved at this the above revision has been preferred challenging the impugned judgment rendered by the learned appellate judge challenging its propriety, legality and validity.
3. Dr. G. Krishnamurthy, learned counsel appearing on behalf of the petitioner, during the course of his argument brought to my notice the finding of the learned appellate judge that clauses (b) and (c) of section 138 of the Negotiable Instruments Act have not been followed in this case and that both courts below have totally overlooked the said aspect and that the non-compliance with the legal mandate goes to the root of the case. On this ground, learned counsel challenges the propriety and correctness of the order passed by the courts below.
4. Section 138 of the Negotiable Instruments Act, 1881, as amended by Act No. 66 of 1988, reads as follows :
"138. 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 a term which may extend to one year, 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 is 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 fifteen 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."
5. A combined reading of clauses (b) and (c) of section 138 would clinch the fact impliedly that the cause of action for a payee to lodge a complaint under the above section of law would arise only after making the demand to the drawer claiming the amount to be paid by giving a notice in writing within fifteen days from the date of dishonour of the cheque and if not, the section clearly provides that there may be no valid demand and the cause of action provided may not arise for the offence clearly spelt out in the above section of law. Keeping the above position to the facts of the instant case, it is noticed that the cheque given by the revision petitioner herein to the respondent and presented for encashment was returned as dishonoured on August 27, 1991, and that, however, within five days, i.e., on September 2, 1991, a legal notice making the demand for payment of the said amount was claimed to have been given to the petitioner and as per the observations made by the learned appellate judge that legal notice was attempted to be served on September 13, 1991, September 14, 1991, September 16, 1991; September 17, 1991; September 18, 1991, and September 19, 1991, but, ultimately, on September 20, 1991, returned with the endorsement that no such addressee is available. For the reason that the same address was given in the summons of the complaint, learned appellate judge has attributed motive to the postal authorities and thus rejected the contention of learned counsel for and on behalf of the revision petitioner.
6. Be that as it may, it is seen that no notice was served upon the revision petitioner as contemplated under clauses (b) and (c) of section 138 of the Negotiable Instruments Act, which would mean that no demand has been made within fifteen days from the date of dishonour of the cheque in question. This would postulate the fact that the mandate inbuilt in section 138 to comply with a certain act so as to carve out the cause of action in filing the complaint has not been identified, whatever may be the reasons or explanation pertaining to the circumstances prevailing then given by learned appellate judge. For the mere reasoning of failure in compliance with the mandate inbuilt in the above section of law, I am at every difficulty to countenance the finding recorded by the learned appellate judge and for the said reason, I am of the firm view that the conviction and sentence recorded against the revision petitioner cannot be sustained.
7. It has been stated that the parties have settled the matter out of court among themselves, but once a court of law has given a finding on a question of law mulcting with criminal liability to a person under the provisions of a special enactment, the same cannot be allowed to be controverted by the reason of the agreement reached among the parties inter se and, therefore, the said factual aspect happened has become out of point. In short to say, the bar for the respondent has no say in this matter perhaps for the reasons aforesaid.
8. In the result, for the foregoing reasons, the revision stands allowed and consequently, the conviction and sentence recorded by the lower appellate judge confirming the findings of the learned Magistrate in C.A. No. 203 of 1994 on April 24, 1995, against the revision petitioner is set aside and the accused is acquitted and set free. Fine amount, if any, paid is ordered to be refunded to the revision petitioner.