Gujarat High Court
Bharatbhai Ranchodbhai Parmar vs Rajendrakumar Bahecharbhai Anand on 12 June, 2023
R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL APPEAL NO. 2578 of 2008
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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BHARATBHAI RANCHODBHAI PARMAR
Versus
RAJENDRAKUMAR BAHECHARBHAI ANAND & 1 other(s)
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Appearance:
(MR BS BRAHMBHATT)(2300) for the Appellant(s) No. 1
ADVOCATE NOTICE SERVED for the Appellant(s) No. 1
for the Opponent(s)/Respondent(s) No. 1
MR MP PRAJAPATI(677) for the Opponent(s)/Respondent(s) No. 1
MR BHARGAV PANDYA ADDL. PUBLIC PROSECUTOR for the
Opponent(s)/Respondent(s) No. 2
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CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 12/06/2023
CAV JUDGMENT
1. This appeal is filed by the original complainant under Section 378(4) of the Code of Criminal Procedure, challenging the judgment and order dated 31.07.2006 passed by the learned Page 1 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 Judicial Magistrate First Class, Gandhinagar, in Criminal Case No.2863 of 2004. By the said judgment and order, the learned Magistrate has recorded the acquittal of respondent No.1 - original accused for the charges under Section 138 of the Negotiable Instruments Act, 1881.
2. Brief facts of the case of the complainant are as under:
2.1 That the appellant - original complainant is having newspaper agency and his father was retired Government servant and during their service tenure, the accused had contacted to the present appellant due to his father relation and given Rs.20,000/-
in his bad days. After long period, the accused did not come forward for returning this amount and also father of the applicant had expired on 14.10.2023. It is contended that several reminders were given to the respondent - accused for the aforesaid amount, the respondent - accused had given him a cheque No.872736 of State Bank of India dated 12.03.2004 of Rs.20,000/- with the assurance that such amount shall be realized. The said cheque was deposited by the appellant on 12.03.2004 in the Bank of India at Gandhinagar Branch in his account No.9701. However, the said Page 2 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 cheque was dishonoured and returned back with the memo of "insufficient balance".
2.2 The same was informed to the appellant on 15.03.2004. The legal notice under Section 138 of the N.I. Act was issued by the complainant to the accused on 26.03.2004 by R.P.A.D. and by U.P.C. at the office address of the accused. The R.P.A.D. was refused by the accused and U.P.C. was duly received by the respondent accused and as the amount in question was not paid within prescribed period of 15 days, the appellant was constrained to file the complaint before the Court of learned Judicial Magistrate First Class, Gandhinagar. However, the respondent - accused came to be acquitted after trial by the impugned judgment and order dated 31.0.7.2006. Hence, this appeal at the instance of the complainant.
2.3 The complaint was registered on 29.04.2004 as Criminal Case No.2863 of 2004 for the offence punishable under Section 138 of the N.I. Act. Upon verification of the complainant, the learned Magistrate proceeded to issue summons upon respondent
- accused. Such summons issued by the trial Court was duly Page 3 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 served. The learned Magistrate after recording plea of accused, who refused the case of complainant, proceeded to record the evidence. The further statement of accused under Section 313 of Cr.P.c. was recorded.
3. This Court by order dated 25.09.2008 had granted leave to appeal. Thereafter, the matter was adjourned for admission and by order dated 14.10.2008, this Court had admitted the present appeal. The notice was issued by this Court upon the respondent No.1 - original accused, which was duly served and was represented by the learned advocate Mr. M.P. Prajapati. The R & P of the original Criminal Case was called for which was received by this Court. When the matter was listed for final hearing, it was reported that the learned advocate Mr. B.S. Brahmbhatt representing the appellant, had expired pending the appeal. Hence, the notice was issued upon the appellant in order to enable him to engage a lawyer to represent his case. Though the notice was served, the appellant has chosen not to appear or to engage the lawyer to conduct the present appeal. Thus, this Court by order dated 07.09.2022 after recording absence of appellant and considering the appeal is of the year 2008, as a last chance, had Page 4 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 adjourned the matter on 21.09.2022. Few adjournments were granted and ultimately, this Court proceeded to hear the matter with the assistance of learned APP Mr. Bhargav Pandya and learned advocate Ms. Nishi Patel for Mr. Prajapati, learned advocate for the respondent No.1.
4. Ms. Nishi Patel, learned advocate has invited attention of this Court to the impugned judgment and order of acquittal. She has submitted that learned Magistrate after recording the evidence, has passed the reasoned order under Section 255(1) of the Code of Criminal Procedure. She has further submitted that during the appreciation of evidence, which has come on record, the learned Magistrate noticed that the complainant has failed to comply with the statutory requirement of service of notice to the respondent as per the statutory provisions of Section 138(b) of the N.I. Act. She has further invited attention of this Court to the R & P, more particularly, the legal notice dated 24.03.2004 (Exhibit 17/1), postal slip dated 25.03.2004 (Exhibit 18), UPC slip (Exhibit 18/1), envelope of postal slip of UPC (Exhibit 19), envelope sent by RPAD by the complainant to the accused. She submitted that in examination-in-chief, the complainant has fairly admitted that Page 5 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 though the attempt was made to serve the notice under Section 138 of the NI Act upon the accused, the same could not be duly served and had returned back unserved. She, therefore, submitted that no error can be attributed to the learned Magistrate in passing the impugned order on failure of the complainant to comply with the mandatory requirement to maintain the complaint under Section 138 of the N.I. Act.
5. In support of her submissions, she has relied upon the decision of this Court in the case of Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel & Ors. reported in MANU/GJ/1648/2022 and submitted that operation of Section 138 of the N.I. Act is limited by proviso, when the proviso was applied the complaint would not be maintainable. She therefore, submitted that unless the notice is served in conformity with the proviso (a),
(b) and (c) appended to Section 138 of the Negotiable Instruments Act, the complaint would fail. She therefore, urged this Court to not to entertain the present appeal.
6. Having perused the record and the impugned order of trial court and considering the submissions of learned counsel for Page 6 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 accused, the point that arises for my consideration in the appeal would be : "Whether the trial Court, in the present facts of the case, was justified in rejecting the complaint on the ground of non compliance of mandatory provision of section 138(b) of the NI Act?"
7. Proviso to Section 138 of the NI Act stipulates that three conditions must be satisfied before dishonour of a cheque can constitute an offence and become punishable. The first condition is that the cheque ought to 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 second condition is that the payee or the holder in due course of the cheque must make a demand for payment of the 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 return of the cheque as unpaid. The third condition is that the drawer of such a cheque should have failed to make 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. It is only upon the Page 7 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 satisfaction of all the aforesaid three conditions that an offence under Section 138 can be said to have been committed by the person issuing the cheque. Thus, giving notice of demand to the payee within the stipulated period after dishonor of a cheque is one of the necessary conditions for making out the offence under Section 138 of the NIA Act.
8. The Supreme Court in the case of D. Vinod Shivappa vs. Nanda Belliappa, reported in (2006) 6 SCC 456, has elaborately dealt with a situation 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. The Court further observed that 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. The Court went on to observe that a person who can dodge the postman for about a Page 8 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 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 a notice to him within a period of 30 days from the date of receipt of information from the bank regarding return of the cheque as unpaid.
9. The aforesaid observations were relied upon by the Supreme Court in the case of C. C. Alavi Haji vs. Palapetty Muhammed and Anr., reported in (2007) 6 SCC 555. However, it was observed by the Supreme Court that when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. What the Supreme Court has emphasized is that the notice should have been sent on the correct address of drawer of the cheque. It is only then it can be said that notice has been received by the drawer of the cheque.
10. In Harman Electronics Private Limited and another vs. National Panasonic India Private Ltd, reported in (2009) 1 SCC 720, the Supreme Court has, while deliberating on the aforesaid Page 9 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 issue, observed as under:
"13. It is one thing to say that sending of a notice is one of the ingredients for maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the ingredients thereof are required to be proved. What would constitute an offence is stated in the main provision. The proviso appended thereto, however, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken. If the ingredients for constitution of the offence laid down in provisos (a), (b) and (c) appended to Section 138 of the Negotiable Instruments Act are intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action for filing a complaint. As it is only on receipt of the notice that the accused at his own peril may refuse to pay the amount. Clauses (b) and (c) of the proviso to Section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would."
It was further observed by the Court that for constitution of an offence under Section 138 of the Act, the notice must be received by the accused. The Court went on to observe that it may be deemed to have been received in certain situations. An inference of having received the notice by a drawer of a cheque can be raised only if the notice has been dispatched to his correct address. Such an inference cannot be drawn if the notice has been sent on the incorrect address of the drawer of the cheque. Page 10 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023
11. The Hon'ble Supreme Court in the case of N. Harihara Krishnan Vs. J. Thomas, reported in (2018) 13 SCC 663, while holding that provisions of CrPC should give way to section 142 of N.I. Act in the taking cognizance of offence under section 138 of N.I.Act, also examined the scheme of the N.I. Act and explained the ingredients to be necessary to be fulfilled for "cause of action"
to lodge prosecution. The relevant observations are as under :
" 23. The scheme of the prosecution in punishing under Section 138 of THE ACT is different from the scheme of the Crpc. Section 138 creates an offence and prescribes punishment. No procedure for the investigation of the offence is contemplated. The prosecution is initiated on the basis of a written complaint made by the payee of a cheque. Obviously such complaints must contain the factual allegations constituting each of the ingredients of the offence under Section 138 . Those ingredients are: (1) that a person drew a cheque on an account maintained by him with the banker; (2) that such a cheque when presented to the bank is returned by the bank unpaid; (3) that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier; (4) that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; and (5) such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. It is obvious from the scheme of Section 138 that each one of the ingredients flows from a document which evidences the Page 11 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 existence of such an ingredient. The only other ingredient which is required to be proved to establish the commission of an offence under Section 138 is that inspite of the demand notice referred to above, the drawer of the cheque failed to make the payment within a period of 15 days from the date of the receipt of the demand. A fact which the complainant can only assert but not prove, the burden would essentially be on the drawer of the cheque to prove that he had in fact made the payment pursuant to the demand.
24. By the nature of the offence under Section 138 of THE ACT, the first ingredient constituting the offence is the fact that a person drew a cheque. The identity of the drawer of the cheque is necessarily required to be known to the complainant (payee) and needs investigation and would not normally be in dispute unless the person who is alleged to have drawn a cheque disputes that very fact. The other facts required to be proved for securing the punishment of the person who drew a cheque that eventually got dishonoured is that the payee of the cheque did in fact comply with each one of the steps contemplated under Section 138 of THE ACT before initiating prosecution. Because it is already held by this Court that failure to comply with any one of the steps contemplated under section 138 would not provide " cause of action for prosecution". Therefore, in the context of a prosecution under Section 138, the concept of taking cognizance of the offence but not the offender is not appropriate. Unless the complaint contains all the necessary factual allegations constituting each of the ingredients of the offence under Section 138, the Court cannot take cognizance of the offence. Disclosure of the name of the person drawing the cheque is one of the factual allegations which a complaint is required to contain. Otherwise in the absence of any authority of law to investigate the offence under Section 138, there would be no person against whom a Court can proceed. There cannot be a prosecution without an accused. The offence under Section 138 is person specific. Therefore, the Parliament declared under Section 142 that the provisions dealing with taking cognizance Page 12 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 contained in the CrPC should give way to the procedure prescribed under Section 142. Hence the opening of non- obstante clause under Section 142. It must also be remembered that Section 142 does not either contemplate a report to the police or authorise the Court taking cognizance to direct the police to investigate into the complaint."
12. In the instance case, it has come on record that the notice was initially dispatched by registered post A.D., on the address which is the Government office where the accused seems to be doing service. As per the postal department report, cover with had returned back with an endorsement "during distribution of post accused not available". In examination in chief, the complainant has admitted that service of legal notice could not be effected. However, the fact remains that no question has been raised with regard to incorrect address by the accused in cross examination. On the other hand, on the same address court summons have been duly served upon accused who has remained present before the Magistrate in response to the court's summons. In such circumstances, considering the legal proposition as laid down in the case of C.C. Alavi ( supra), I am of the view that the learned Magistrate committed error in dismissing the complaint on the ground of non compliance of section 138(b) of the N.I.Act. The notice being sent by RPAD / UPC on the correct address of the Page 13 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 accused raises presumption in favor of the complainant and in absence of any contrary fact being brought on record, the said presumption stands unrebutted.
13. So far as reliance placed by learned Advocate for the respondent -accused on the decision of this Court in the case of Dashratbhai Trikambhai Patel ( supra) is concerned, it was mainly concerned on the issue of non compliance of section 138(b) of the N.I. Act where the complainant had failed to specify the amount in the legal notice, which was treated vague and capable of two interpretations. It is in this background of facts, this Court held that service of notice is trite and imperative in character for maintaining complaint.
14. For foregoing reasons, the impugned order passed by the learned Magistrate lays down an incorrect proposition of law, in the facts of the case. Now, on merits of the case , the court notices that the accused has raised probable defense of no debt outstanding and the security cheque lying with the father of the complainant being misused by the complainant. From the record of the present appeal it has transpired that the learned advocate Page 14 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023 R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023 representing the appellant had expired and notice was sent to the Appellant which has been duly served. The Appellant has chosen not to engage a lawyer or to appear before this court to conduct the present appeal. Considering the age of the matter, this court has called upon the learned advocate for respondent and has proceeded to decide the matter finally. It appears that the disputed amount on the cheque involved is Rs. 20,000 : 00. In such circumstances, considering the smallness of the amount and the appellant having not appeared, the present Appeal is not entertained and hence rejected.
The Appeals stands disposed as rejected. Bailable warrant stands discharged. Record and proceedings be sent back forthwith to the concerned Court.
(NISHA M. THAKORE,J) Y.N. VYAS Page 15 of 15 Downloaded on : Fri Jun 16 20:35:28 IST 2023