Kerala High Court
M.Usman vs M.P. Muhammed Ali on 1 October, 2007
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE P.D.RAJAN
THURSDAY, THE 19TH DAY OF JANUARY 2017/29TH POUSHA, 1938
CRL.REV.PET.NO. 4010 OF 2007 ( )
---------------------------------
AGAINST THE JUDGMENT IN C.R.A. NO.360/2005 OF THE ADDITIONAL SESSIONS
JUDGE, ADHOC-1, THALASSERY DATED 01-10-2007
AGAINST THE JUDGMENT IN STC NO.1618/2003 OF JUDICIAL FIRST CLASS
MAGISTRATE COURT, MATTANNUR DATED 31.05.2005
-----------------------
REVISION PETITIONER(S)/APPELLANT/ACCUSED:
----------------------------------------
M.USMAN, AGED 59,
S/O MAMMU, RESIDING AT "BHADARIYA MANZIL",
KADAMBOOR AMSOM, ADOOR DESOM, KADACHIRA.
BY ADVS.SMT.K.K.CHANDRALEKHA
SRI.GOPAKUMAR.G.
RESPONDENT(S)/RESPONDENT/COMPLAINANT:
------------------------------------
1. M.P. MUHAMMED ALI, AGED 38,
S/O MAMMOOTY HAJI,
KALATHIL VEEDU,
THEROOR PALAYODE P.O.,
EDAYANNUR.
2. STATE REPRESENTED BY PUBLIC
PROSECUTOR, HIGH COURT OF KERALA.
R1 BY ADV. SRI.PHIJO PRADEESH PHILIP
THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD
ON 19-01-2017, THE COURT ON THE SAME DAY PASSED THE
FOLLOWING:
NS
'C.R.'
P.D. RAJAN, J.
--------------------------------
Crl. Rev.Pet. No.4010 of 2007
----------------------------------
Dated this the 19th day of January, 2017
O R D E R
This revision petition is preferred by the accused against the judgment in Criminal Appeal No.360 of 2005 of the Additional Sessions Judge, Adhoc-I, Thalassery. Revision petitioner was the accused in S.T.C. No.1618 of 2003 of the Judicial First Class Magistrate Court, Mattannur which was filed under Sec.138 of the Negotiable Instruments Act ("NI Act" for short). The learned Magistrate convicted the accused under Sec.138 of the NI Act and sentenced to simple imprisonment for six months and compensation of Rs.40,000/- under Sec.357(3) Cr.P.C. in default, simple imprisonment for three months. Against that, the accused preferred the above criminal appeal, where the learned Additional Sessions Judge modified the sentence to imprisonment till rising of the court and compensation of Rs.60,000/-, in default simple imprisonment for three months.
2. The complainant's case in the trial court was Crl. Rev.Pet. No.4010 of 2007 2 that the accused borrowed a sum of Rs.40,000/- from him and in discharge of that liability he issued Ext.P1 cheque. When Ext.P1 was presented for encashment, it was dishonoured for the reason of funds insufficient. The complainant demanded the due amount by giving a notice in writing, but it was returned as "addressee left India". During trial, the complainant was examined as PW1 and his documents were marked as Exts.P1 to P6. Incriminating circumstances brought out in evidence were denied by the accused while questioning him. He examined DW1 and DW2 and marked Exts.D1 to D5 in support of his defence.
3. Learned counsel appearing for the revision petitioner submitted that there was no service of notice as stated under Sec.138(b) of the NI Act. The complainant, in his evidence, admitted that the revision petitioner was working abroad when Ext.P4 notice was issued to the accused. The cause of action under Sec.138 of the NI Act arises only after service of notice. When there was no notice under Sec.138(b) of the NI Act, the Crl. Rev.Pet. No.4010 of 2007 3 Magistrate erred in taking cognizance of the offence.
4. In the instant case, it is true that the legal notice issued to the accused was returned unserved with endorsement "addressee left India". The notice under Sec.138(b) of the NI Act had been issued in the residential address given to the complainant. Learned Magistrate, in his judgment, observed that " both side admitted that accused was abroad at the time of issuance of notice". However, both courts below came to a conclusion that when notice was issued in the correct residential address of the accused, he intentionally evaded from the receipt of notice, it is presumed that notice may be deemed to have been served. The requirement of giving notice is mandatory for maintaining a complaint, but there is no procedure prescribed under Sec.138 of the NI Act for serving notice on the accused. Notice means notice in writing and not a verbal demand to the drawer. Apex court in K.Bhaskaran v. Sankaran Vaidhyan Balan [(1999) 7 Supreme Court Cases 510] held that once notice has been sent by a registered Crl. Rev.Pet. No.4010 of 2007 4 post with acknowledgment due in the correct address, it must be presumed that the service has been made effective. In V. Rajakumari v. P. Subbarama Naidu [(2004) 8 Supreme 774] it was held that statutory notice under Section 138(b) of the NI Act sent in the correct address of the drawer but returned with endorsement must be presumed to be served on the drawer and the burden to show that accused/drawer had managed to get an incorrect postal acknowledgment letter on the complainant have to be considered during trial and on the background facts of the case.
5. The provision under Sec.138 of the NI Act shows that where a cheque issued by a drawer in discharge of any debt or liability, in whole or in part, is returned by the bank unpaid, 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, such person shall be deemed to have committed an offence. This is subject to the proviso to Section 138 that the Crl. Rev.Pet. No.4010 of 2007 5 cheque should have been presented before 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. The payee must make 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. In spite of the demand, if the drawer fails to make the payment of the said amount of money to the payee within fifteen days of the receipt of the notice, a cause of action would arise for prosecuting him under Section 138 of the NI Act. It is mentioned under Sec.142 of the NI Act that the court shall take cognizance of an offence punishable under Sec.138 of the NI Act upon receipt of a complaint in writing by the payee or as the case may be, the holder in due course of the cheque. Proviso to Sec.138(c) says that such complaint must be made within one month of the date on which the cause of action arises. However, discretion has been given to the court to take cognizance Crl. Rev.Pet. No.4010 of 2007 6 of the complaint after the expiry of the period of limitation, if the complainant satisfies the court that he had sufficient reason for not making the complaint within the limitation period.
6. A bare reading of Sec.138 of the Negotiable Instruments Act shows that the purport of Sec.138 is to punish the dishonest drawers of cheque who evade and avoid their liability. As stated in Clause(b) of the proviso, the payee or the holder of the cheque in due course is necessarily required to serve a written notice on the drawer of the cheque within 15 days from the date of intimation received from the bank about the dishonur of the cheque. It is clear from Sec.27 of the General Clauses Act, 1897 and Sec.114 of the Evidence Act, 1872, that once a notice is sent by registered post by correctly addressing to the drawer of the cheque, the service of notice is deemed to have been completed. The requirements under Sec.138(b) stand complied, if notice is sent in the above prescribed manner. In this context, I may refer an earlier decision of the apex court in Crl. Rev.Pet. No.4010 of 2007 7 M/s. Dalmia Cement (Bharat) Ltd. v. M/s. Galaxy Traders and Agencies Ltd. [AIR 2001 Supreme Court 676] in which it was held that the presumption is rebuttable. But, in the subsequent decision M/s. Harman Electronics (P) Ltd. and Anr. v. M/s. National Panasonic India Ltd. [AIR 2009 Supreme Court 1168] it was held that the presumption in support of service of notice depends upon the facts and circumstances of each case. In Jagdish Singh v. Natthu Singh (1992) 1 SCC 647, State of M.P. v. Hiralal (1996) 7 SCC 523, V. Rajkumari v.
P. Subrama Naidu 2005 SCC (Cri) 393 apex court held that when a notice is sent by registered post and is returned with 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. However, the drawer is at liberty to rebut this presumption either by adducing evidence or on the basis of evidence produced by the complainant.
7. Apex court in New India Sugar Mills Ltd.
Crl. Rev.Pet. No.4010 of 2007 8 v. CST [AIR 1963 SC 1207] held that the interpretation of the statute should be based on the object which the intended legislation has sought to achieve, which reads as follows:
"It is a recognized rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute, and which effectuate the object of the Legislature. If an expression is susceptible of a narrow or technical meaning, as well as popular meaning, the Court would be justified in assuming that the Legislature used the expression in the sense which would carry out its object and reject that which renders exercise of its power invalid."
8. My attention has been drawn to the decision of the apex court reported in D. Vinod Shivappa v. Nanda Belliappa [(2006) 6 Supreme Court Cases 456] which reads as follows:
" 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- Crl. Rev.Pet. No.4010 of 2007 9 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 some time 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 fo 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. 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 Crl. Rev.Pet. No.4010 of 2007 10 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 the knowledge of the notice had deliberately avoided to receive notice. Therefore, it would be premature 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. In such a case the High Court ought not to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure.
In the above decision, it is held that each question with regard to the service of notice has to be answered by reference to the facts of the case and no rule of universal application can be laid down in all cases when notice is Crl. Rev.Pet. No.4010 of 2007 11 not served on account of non availability of the addressee in the given address. If notice is served upon the drawer of the cheque, no controversy arises. However, if the addressee refuses the notice it may be presumed that the notice have been properly served. Another situation is that the notice could not be served on the addressee on the ground of his non availability at the time of delivery or the house is remaining locked on account of his non availability in the station or in India or he has gone elsewhere permanently etc., in each such cases it means that there has been no service of notice. If there is no service of notice in the aforesaid grounds, it would completely defeat the purpose of the NI Act. If complainant is able to prove that the drawer of the cheque knew about the notice and deliberately evaded from the premises making a false endorsement, it will defeat the process of law and in such situation the apex court held that the Court shall presume that there was proper service of notice. This is really a matter of evidence and proof. Therefore, if the service of notice is Crl. Rev.Pet. No.4010 of 2007 12 fraudulently refused or avoided by the accused in an unscrupulous manner, that is a matter of evidence and that fact can be proved on the basis of evidence. When complainant has the knowledge that the addressee left the place in search of a job outside India and knowing this fact, he sent notice and it was returned as addressee left India, there is no proper service of notice.
9. In this case, the complainant knew that the accused went abroad in search of job and he is not available in his residence, even then, he issued a notice under Sec.138(b) of the NI Act. The complainant has no case that the accused deliberately evaded from his residence in order to avoid service of notice. On the other hand, when complainant issued notice under Section 138(b) of the NI Act, he knew that the revision petitioner is working abroad, who went in search of a job in a foreign country, the question arises is whether the said service of notice in the available address is sufficient for proper compliance of Sec.138(b) of the NI Act. If the complainant is able to prove that the drawer of the Crl. Rev.Pet. No.4010 of 2007 13 cheque deliberately evaded service, then the presumption of service will attract. On the other hand, if the registered notice as contemplated under Section 138(b) of the NI Act was issued by the complainant but it was returned with endorsement "addressee left India" and the complainant at the time of issuance of notice knew that the accused went in search of job in a foreign country there is no deliberate avoidance of notice and it is presumed that there is no notice under Section 138(b) and no presumption of service can be drawn against the drawer. In such a situation, prosecution under Section 138 of the NI Act is not possible and the complainant will have every right to approach the civil court for proper remedies. However, no evidence has been adduced by the complainant with regard to the knowledge of the accused about notice. Therefore, the endorsement made by the postal authorities in the notice itself is not sufficient to draw a presumption of service of notice. An enquiry with regard to the knowledge of non availability at the residence is necessary in this matter Crl. Rev.Pet. No.4010 of 2007 14 and the learned Magistrate failed to enquire that aspect. The evidence in a case can be given of fact in issue and relevant fact alone. The court is bound to prevent admission of inadmissible evidence. When the relation of a relevant fact to the fact in issue is proximate it is called direct evidence and is admissible. The credibility of a fact depend upon various factors. If one witness has no knowledge of a fact the evidence given by that witness is worthless. Section 27 of the General Clause Act gives a presumption of service of notice sent by post and the dispatcher of the notice can claim the benefit of presumption of service and it is a rebuttable presumption. If the evidence of the witness discloses his inability to speak about the service of notice, it is difficult for the court to accept that evidence for drawing the above presumption.
10. The offence under Sec.138 of the NI Act is not a natural crime like hurt or other offence under the Indian Peanl Code, but, it is an offence created by a legal fiction in the statute, transformed civil liability into Crl. Rev.Pet. No.4010 of 2007 15 criminal liability. The onus of proving all the ingredients of the offence in a criminal case is on the prosecution. When an accused person is charged with having committed an offence, it is for the prosecution to prove all the ingredients of the offence. It is only when this burden is discharged, the accused has to explain the essential elements in the prosecution case which would negative it. Even after the civil liability transformed into criminal liability under restricted conditions by amendment of the NI Act, by introducing the relevant provisions, the strict liability provided for criminal cases has not changed. In this context, the decision of the apex court in D. Vinod Sivappa v. Nanda Belliappa [(2006) 6 Supreme Court Cases 456] is relevant.
11. In this case, the revision petitioner was working abroad when notice under Sec.138(b) of the NI Act was issued at his residence, but he never evaded from the receipt of notice. Both courts failed to appreciate that position and convicted the accused. Therefore, the conviction and sentence passed by the Crl. Rev.Pet. No.4010 of 2007 16 Judicial First Class Magistrate Court, Mattannur in S.T.C. No.1618/2003 which was modified by the learned Additional Sessions Judge, Adhoc-I, Thalassery in Criminal Appeal No.360 of 2005 are set aside. The matter is remitted to the trial Court for fresh consideration. The learned Magistrate is directed to take fresh evidence with regard to the service of notice and dispose of the matter as per law. Both parties are directed to appear before the trial Court and they are at liberty to adduce fresh evidence.
Crl.R.P. is disposed of as above.
Sd/-
P.D. RAJAN,
JUDGE
NS/acd / True Copy /
P.A. To Judge