Romesh Chander Sharma vs Khushal Bali on 3 November, 2018

[Cites 13, Cited by 0]

Jammu & Kashmir High Court

Romesh Chander Sharma vs Khushal Bali on 3 November, 2018

Equivalent citations: AIRONLINE 2018 J AND K 393

1. Through the medium of instant petition, petitioner seeks quashing of the order dated 07th April, 2008, passed by the learned Sub-Judge (Special Railway Magistrate), Jammu in the Complaint titled, "Khushal Bali Vs. Romesh Chander Sharma", filed by the respondent under Section 138 of the Negotiable Instruments Act.

2. The facts in nutshell are that the Cheque No.672434 dated 26th July, 2007 for Rs. 3.00 lacs has been obtained by the respondent from the petitioner by force, coercion and by undue influence in connivance of the Police of Police Station, Gandhi Nagar, Jammu. Aggrieved of the illegal acts of the respondents and that of the police of Police Station, Gandhi Nagar, Jammu, the petitioner has preferred a writ petition bearing OWP No.512/2007 before this Court and the same is pending. The cheque hereinbefore mentioned is under challenge and this Court has been prayed to direct the police concerned to produce the same in this Hon'ble Court. The respondent, without disclosing the fact of the pendency of the writ petition in respect of the cheques he obtained by force from the petitioner with the aid of the police officers, has filed a Complaint against the petitioner under Section 138 of the Negotiable Instruments Act (hereinafter referred CRMC No. 107/2008 Page 1 of 11 2 to as "the Act") without complying with the provisions of the said Act before the Court of learned Special Railway Magistrate, Jammu, wherein the respondent has sought for the directions against the petitioner for payment of Rs. 3.00 lacs in respect of a cheque bearing No. 672434 dated 26th July, 2007, which allegedly presented by him in bank on 23 rd January, 2008 for encashment and the same was dishonored on the same day by the bank of the petitioner; demand notice dated 22nd February, 2008 received back by the Advocate of the respondent with the endorsement of the postman that the addressee is not traceable at the given address. Notice of the complaint sent by the learned Special Railway Magistrate, Jammu through police received back with the endorsement of the police officer that despite search of the petitioner, his house could not be traced.

3. It is stated in the petition that on 04th June, 2008, petitioner was contacted on his mobile phone by the police of Police Station, Rehari and was asked to appear in the police station. As such, on the directions of the police officer, he went to the police station where he was forced to accept the notice of Complaint. This is how the petitioner was served with the notice of the Complaint and as such, he came to know about the filing of the Complaint by the respondent against him. On 05th June, 2008, the petitioner appeared before the Court below and filed an application for the certified copy of the order of summons issued against him by the Court below. It is also stated that the Court of learned Special Railway Magistrate, Jammu while issuing process in the Complaint has committed an illegality, that has resulted into miscarriage of justice especially when the respondent by his act of perversion, did not disclose the material facts of the case inasmuch as the pendency of the writ petition, as has been referred hereto above. The learned Trial Court has also committed haste in issuing process especially when it did not go through the endorsement of the postman, who says that the addressee is not available and for this very reason, the demand notice CRMC No. 107/2008 Page 2 of 11 3 could not be served on the petitioner. The address on the demand notice is incorrect, which is not the address of the petitioner, who is not residing at the given address and that is why the notice of demand was not served on him. Therefore, in absence of notice being a statutory requirement, the cognizance in the Complaint could have not been taken, as such, the issuance of process in the given circumstances is bad and attracts quashment of the same.

4. It is further stated in the instant petition that the cheque hereinbefore referred to was presented by the respondent in his bank on number of occasions and the same was repeatedly dishonoured by the bank of the petitioner, but the respondent did not choose to bring action, as contemplated in the aforesaid Act against the petitioner when the cheque was dishonoured at the very first time, therefore, the respondent in law lost his right of action for want of cause of action, as the law under the aforesaid Act does not permit the payee or the holder of the cheque to create the cause of action against the drawer of the cheque according to his longing. Perusal of the cheque in question placed on record of the Complaint file suggests that the same was presented in the bank for four times and for three bouncings, the respondent/complainant neither moved nor he ever even once met with the petitioner, as he could not because of the dispute pending before this Court in the shape of the aforesaid writ petition. The cause of action for filing the Complaint under the provisions of the aforesaid Act accrues to the payee or holder of the cheque when the same is bounced at the very first occasion and if no action, as contemplated under Act is taken, the payees or the holder of the cheque loses the cause of action, as such, no Complaint lies yet for no reasons much less a plausible reason the Trial Court of Special Railway Magistrate, Jammu has taken cognizance, which is illegal, as such, is liable to be quashed.

CRMC No. 107/2008 Page 3 of 11 4

5. The petitioner has challenged the order dated 07th April, 2008, passed by the learned Special Railway Magistrate, Jammu, whereby he has taken cognizance in the Complaint amongst others on the following grounds:-

(i) That the cheque under reference is disputed, as the same has been obtained by force, coercion and undue influence and the same has not been issued for the discharge of any liability or any debt, as such it cannot be construed that the petitioner has committed any offence, as spelled out in Section 138 of the Negotiable Instruments Act especially when the same is subject matter of a writ petition before this Hon'ble Court, filed earlier than the Complaint in question has been filed by the respondent. The respondent/complainant by concealment of this material fact has misled the Court below, thereby has misused the process of the Court, which has resulted into the abuse that is required to be prevented for securing the ends of justice. The cognizance and the process issued by the Court below is illegal as such attracts set aside/quashment.

(ii) That making of demand notice as enshrined in Section 138 (b) of the Negotiable Instruments Act is sine-qua-non for launching prosecution, but in the instant case, no demand notice has ever been received by the petitioner. The perusal of the complaint contained in Annexure-C suggests that the notice was sent and received back by the advocate of the respondent unserved with the endorsement of the postman that the addressee is not available in the house which statement in the complaint of the respondent is a blatant lie. Contents of annexure-D speaks volume about the conduct of the respondent, the postman in his endorsement states only that addressee not available. Words "in the house" have been illegally incorporated in the complaint by the respondent for his ulterior motives just to mislead the trial court for taking cognizance. The notice in discussion was sent at a wrong address where the petitioner does not reside nor do any business, it is, however, worthwhile to submit that the notice of complaint was sent to the police concerned for the service of the petitioner by the court below, which notice, contained in annexure-E has also been received back by the court with the report of the police that no such house is existing in the locality under their jurisdiction, which is suffice to say that the petitioner does not reside at the address given in the complaint also and the demand notice as well was sent at the wrong address, as such, the complaint does not lie yet the cognizance in the same has been taken which is illegal and attracts quashment.

(iii) That cheque in question was presented in the bank on number of times, the perusal of the cheque suggests that the same was presented on 30-07-2007(stamped), 02-08-2007(stamped), date is not legible and on 23-01-2008 (date written by hand). The respondent did not act at the time of first bounce and slept over CRMC No. 107/2008 Page 4 of 11 5 the matter quite for six months and presented the cheque repeatedly and the same was bounced repeatedly, as such, lost the cause of action for launching the prosecution. It is only the first bounce/dishonour when the cause of action is said to have accrued in favour of the complainant but when he failed to take action he cannot be allowed to create the cause of action by presenting the cheque according to his whims. In the present case the respondent presented the cheque on four occasions and the same was bounced on all the four occasions, the respondent did not act at the time of first bounce nor ever he met, as alleged in the complaint, the petitioner, as he could not because of the pendency of the writ petition, as both the petitioner and the respondent are at loggerheads with each other. The trial court of learned Special Railway Magistrate, Jammu has not gone through this aspect of the case and has been swayed by the tactics of the respondent which has been resulted into the abuse of the process of the court as such the order of taking cognizance dated 07.04.2008 and the process issued in the complaint being illegal, devoid of the mandate of law requires set aside and quashment.

(iv) That no other proceedings for the quashment of the order taking cognizance and process have been filed in any Court except the present petition.

6. Counsel for petitioner while arguing the matter has reiterated all grounds taken in memo of petition. He has relied upon following citations.

Shakti Travel and Tours Vs. State of Bihar, reported in 2001 (4) Crimes 150; N. Harihara Krishnan Vs. J. Thomas, reported in 2017 (4) R.C.R. (Criminal) 41; Aggarwal and Co. Vs. Punjab Tractor Ltd., reported in 2012 (3) J.K.J. 473; Kumari Sunita Charak Vs. Ajay Kumar Sharma, reported in 2000 CriLJ 2572; K. Annaji Rao Vs. N. Krishna Raju Sekhar & anr., reported in 2005 (1) R.C.R. (Criminal) 220; Jayachandran Vs. Baburaj, reported in 1998 (3) R.C.R. (Criminal) 826; Neeraj Kotwal Vs. Pawan Kumar Sharma, 561-A Cr.P.C. No.19 of 2018 decided on 26.03.2018 (High Court of J&K); S. S. Ummul Habiba Vs. B. Rajendran, reported in 2005 (1) R.C.R. (Criminal) 352. Whereas respondent counsel has stated that petitioner has raised disputed question of facts, which cannot be CRMC No. 107/2008 Page 5 of 11 6 adjudicated in this petition. That this petition has been filed only to protract the trial.

7. I have given my thoughtful consideration to whole aspects of the matter.

8. Counsel for petitioner has argued at length, but main argument of counsel for petitioner is that demand notice was not served upon him at correct address. He has stated that address given on registered cover and notice of demand, was as H.No.867 Hari Singh Nagar, Rehari Colony Jammu, which was in-correct, whereas his correct address was 297-F Rehari Colony, Jammu. That trial Court has also committed haste in issuing process especially when it did not go through the endorsement of the postman, who says that the addressee is not available and for this very reason, the demand notice could not be served on the petitioner; the address on the demand notice is incorrect, which is not the address of the petitioner, who is not residing at the given address and that is why the notice of demand was not served on him.

9. From bare perusal of demand notice dated 22.02.2008 it is evident that it has been sent at H.no.867 Hari Singh Nagar Jammu (Rehari Colony Jammu). Postman of area has endorsed on Regd. notice that AGAIN - AGAIN TRIED ADDRESSE NOT AVAIABLE.

10. After that respondent filed complaint and in para no.3, it has been specifically mentioned that, after the postman reported that addressee was not available at given address, the registered notice was received back on 01.03.2008; thereafter complainant met the accused on 02.03.2008 who assured that he will make the payment within few days; complainant also apprised the accused with regard to issuance of demand notice. Notice means a formal communication to particular person with regard to certain fact. It is like a news item informing such person of some important event. This can be an invitation to perform certain duty. Notice should cover some important points that are to be communicated to the person against it is sent.

CRMC No. 107/2008 Page 6 of 11 7

Notice of demand for cheque amount as per section 138 of N.I Act, therefore, means that accused should have knowledge of dishonour of cheque and his liability to pay amount to complainant.

11. Now whether petitioner was informed with regard to demand of amount by registered notice or whether accused was having knowledge of demand or not are disputed question of facts; these facts cannot be adjudicated upon in this petition; these can be ascertained only during course of trial. Further perusal of notice sent in complaint, it is evident that petitioner has acknowledged the same at same address i.e. H.No.867 Hari Singh Nagar Jammu. In this regard, it is averred that petitioner was contacted on his mobile phone by the police of Police Station, Rehari and was asked to appear in the police station; as such, on the directions of the police officer, he went to the police station where he was forced to accept the notice of Complaint. This is also a fact which petitioner has to establish during trial of case.

12. Even if it is presumed that petitioner has not received any demand notice, he would have made payment to complainant within 15 days from the date of receipt of notice from court as held in 2008 (1) SLJ 41 case titled Dev Raj Bhasin v Parveen Kumar Kandhari , wherein it held in para no.12.

"In a recent view taken by three Judges' Bench of Hon'ble Apex Court in Appeal (Crl.) No. 767 of 2007 arising out of S.L.P. (Criminal) No. 3910 of 2006 titled "C.C. Alavi Haji v. Palapetty Muhammed and Anr.", Their Lordhships while dealing with the aspect of service of statutory notice upon the drawer of the cheque, have rather observed that any drawer, who wants to join the issue with regard to the non-receiving of the notice sent to him by registered post can even make the payment within fifteen days of the receipt of the notice from the Court in respect CRMC No. 107/2008 Page 7 of 11 8 of a complaint filed under Section 138 of the Act. So law takes care of an honest drawer and not of unscrupulous drawer."

13. Another plea taken is that Cheque No. 672434 dated 26th July, 2007 for Rs.

3.00 lacs has been obtained by the respondent from the petitioner by force, coercion and by undue influence in connivance with Police of Police Station, Gandhi Nagar, Jammu. This plea is also not tenable in this petition at this stage, because it also a fact which is required to be established during trial.

14. Another argument has been taken that cheque in question was presented in the bank on number of times, on 30-07-2007, 02-08-2007 and on 23-01- 2008. The respondent did not act at the time of first bounce and slept over the matter quite for six months and presented the cheque repeatedly and the same was bounced repeatedly, as such, lost the cause of action for launching the prosecution. It is only the first bounce/dishonour when the cause of action is said to have accrued in favour of the complainant but when he failed to take action he cannot be allowed to create the cause of action by presenting the cheque according to his whims. This argument is also without any legal support, because in 2013 (1) SCC 177 in case titled Msr. Leather v. S. Palaiappan, it is held that-

"Negotiable Instruments Ss. 138 proviso and 142(b) - Dishonour of cheque - Repeated presentation/dishonour of cheque - Multiple causes of action/Cause of action if arises afresh each time - Held, prosecution based upon second or successive dishonour of cheque is permissible so long as it satisfies all the requirements stipulated in proviso to S. 138 - Hence, every time a cheque is presented in the manner and within time stipulated under proviso to S. 138 followed by a notice within meaning of cl. (b) of proviso to S. 138 and drawer fails to make payment of amount within stipulated period of fifteen days after date of receipt of such notice, a fresh cause of action accrues every time to holder of cheque to institute proceedings for prosecution of drawer - There is no real or qualitative difference between a case where default is committed and CRMC No. 107/2008 Page 8 of 11 9 prosecution launched immediately after very first dishonour of cheque and where prosecution is deferred till cheque presented again gets dishonoured for the second or successive time - Sadanandan Bhadran, (1998) 6 SCC 514, comprehensively overruled - Multiple causes of action accrue to holder of cheque upon failure of drawer to make payment of cheque amount - Failure to prosecute on basis of first default in payment does not result in forfeiture of payee's right to institute such proceedings on a subsequent default that satisfies all three requirements of S. 138 proviso, (2013) 1 SCC 177-A.

13. What is important is that neither Section 138 nor Section 142 or any other provision contained in the Act forbids the holder or payee of the cheque from presenting the cheque for encashment on any number of occasions within a period of six months of its issue or within the period of its validity, whichever is earlier? That such presentation will be perfectly legal and justified was not disputed before us even at the Bar by learned counsel appearing for the parties and rightly so in light of the judicial pronouncements on that question which are all unanimous. Even Sadanandan Bhadran's case (supra) the correctness whereof we are examining, recognized that the holder or the payee of the cheque has the right to present the same any number of times for encashment during the period of six months or during the period of its validity, whichever is earlier."

15. So in terms of above law prosecution based upon second or successive dishonor of cheque is permissible so long as it satisfies all the requirements stipulated in proviso to S. 138 of N.I Act.

16. The law cited by counsel for petitioner is not applicable in present set of circumstances as in Shakti Travel and Tours Vs. State of Bihar, reported in 2001 (4) Crimes 150, the apex has held that there should be specific mention that demand notice was served. In present case, it has been mentioned in complaint that after the postman reported that addressee was not available at given address, the registered notice was received back on 01.03.2008 , the complainant met the accused on 02.03.2008 who assured CRMC No. 107/2008 Page 9 of 11 10 that he will make the payment within few days; complainant also apprised the accused with regard to issuance of demand notice.

17. In N. Harihara Krishnan Vs. J. Thomas, reported in 2017 (4) R.C.R. (Criminal) 41, there has been given general ingredients for launching proceeding under section 138 of Act. Similarly in Aggarwal and Co. Vs. Punjab Tractor Ltd., reported in 2012 (3) J.K.J. 473, this court has held that in absence of notice the complaint is not maintainable, but in present case facts are quite different. In Kumari Sunita Charak Vs. Ajay Kumar Sharma, reported in 2000 CriLJ 2572, this court has held that before expiry of 15 days from the date of receipt of demand notice, the complaint is not maintainable, but in present case facts are quite different as complaint has been filed after expiry of 15 days of alleged receipt of demand notice In K. Annaji Rao Vs. N. Krishna Raju Sekhar & anr., reported in 2005 (1) R.C.R. (Criminal) 220 it has been held that when the complaint was not filed on the basis of first demand notice, it was not maintainable . This law is not applicable now, in view of recent judgment of apex court in Msr. Leather v. S.Palaiappan (supra); In Jayachandran Vs. Baburaj, reported in 1998 (3) R.C.R. (Criminal) 826, it has been held that cause of action arise only after 15 days of expiry of date of receipt of notice. This law is not applicable, because that law has been passed after final conclusion of trial; but in present case trial is at threshold; In Neeraj Kotwal Vs. Pawan Kumar Sharma, 561-A Cr.P.C. No.19 of 2018 decided on 26.03.2018 (High Court of J&K) , the notice of demand was given after expiry of 15 days , so facts are quite different to that of present case; In S. S. Ummul Habiba Vs. B. Rajendran, reported in 2005 (1) R.C.R. (Criminal) 352, the facts are quite different and law has been made in a appeal against judgment of trial court after full trial.

CRMC No. 107/2008 Page 10 of 11 11

18. In view of what has been discussed above, this petition is dismissed having no merit. Record be sent back, with direction to court below to complete the trial within six months from the date of receipt of file.

(Sanjay Kumar Gupta) Judge Jammu 03.11.2018 Ram Krishan CRMC No. 107/2008 Page 11 of 11

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