Karnataka High Court
Sri M Prakash vs Sri Murugarajendra Co-Operative Bank ... on 14 August, 2012
Author: A.N.Venugopala Gowda
Bench: A.N. Venugopala Gowda
1
®
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 14th DAY OF AUGUST, 2012
BEFORE
THE HON'BLE MR. JUSTICE A.N. VENUGOPALA GOWDA
CRIMINAL REVISION PETITION NO.1294/2010
BETWEEN:
Sri M. Prakash,
S/o. Sri M. Mahantappa,
Aged about 42 years,
Residing at NO.919/71A,
5th Main, KEB Extension,
Davanagere - 577 002.
... PETITIONER
(By Sri N.Shankaranarayana Bhat, Adv.)
AND:
Sri Murugarajendra
Co-Operative Bank Ltd.,
B.T. Galli,
Davanagere - 577 001,
Davanagere District.
Represented by its Manager
Sri S.P. Veerabhadrappa,
S/o. Puttarudrappa,
Aged about 44 years.
... RESPONDENT
(By Sri Mahesh R Uppin, Adv.)
2
This Crl.R.P. is filed under S.397 r/w 401 Cr.P.C.
praying to set aside the judgment dated 4.1.2010 passed
by the Prl. Civil Judge (Sr.Dn.) & CJM, Davanagere in
C.C.No.429/2009 and that of the judgment dated
18.8.2010 passed by the II Addl. Sessions Judge,
Davanagere in Crl.A.No.19/2010 and allow the above
Crl.R.P.
This Crl.R.P. coming on for hearing this day, the
Court made the following:
ORDER
The petitioner, on 15.9.2005, handed over a cheque for `3,00,000/-, to the respondent, towards the debt due by Sri Shivakumar and Smt Amrutha, who had availed a loan from the respondent, by deposit of title deeds. On 28.7.2005, the said cheque was presented for payment. It was returned unpaid by the banker of the petitioner on the ground of 'insufficient funds'. Respondent sent an intimation dated 15.9.2005 to pay the amount within 7 days, in terms of an affidavit executed by the petitioner.
2. The said cheque was again presented before the bank on 1.10.2005 and was dishonoured on the ground 'funds insufficient'. Respondent served a notice dated 3 6.10.2005, calling upon petitioner to pay the cheque amount within 15 days from the date of receipt thereof. Since, no payment was received, a complaint under S.200 Cr.P.C., was filed, to punish the petitioner for the offences under Ss.138 and 142 of the Negotiable Instruments Act, 1881 ('the Act' for short). Cognizance was taken and petitioner was summoned to face the trial. Petitioner pleaded not guilty. For the complainant, PW-1 was examined and Ex.P.1 to P.10 were marked. PW-1 was not cross examined. Accused was examined under S.313 Cr.P.C. There is no defence evidence. Considering the arguments addressed for the complainant and the written submission of the accused, learned Magistrate found the accused guilty of the offence under S.138 of the Act and sentenced the accused to pay fine of `30,000/- and compensation of `3,00,000/- and in default, to undergo simple imprisonment for a period of 6 months.
3. Criminal Appeal filed, contending that in view of issuance of intimation dated 15.9.2005 by the 4 complainant, the subsequent demand notice dated 6.10.2005 (Ex.P.6) is not a valid notice and that the complainant has no cause of action to file the complaint. The contention was not accepted and the appeal was dismissed. Feeling aggrieved, the accused has filed this Criminal Revision Petition.
4. Sri Shankaranarayana Bhat, learned advocate, contended that both the Courts below grossly erred in passing the impugned judgments holding the petitioner guilty of the offence under S.138 of the Act, since, the complaint stood barred under the proviso to S.138 of the Act. He submitted that the complainant did not take action on the basis of an intimation dated 15.9.2005, issued seeking payment of the amount and hence, the complaint filed based on demand notice Ex.P.6, issued with regard to the same transaction is barred. Reliance was placed on the decisions in the cases of (1) Sadanandan Bhadran Vs. Madhavan Sunil Kumar, (1998 Cri.L.J. 4066) and (2) Tameeshwar Vaishnav Vs. Ramvishal Gupta, (AIR 2010 SC 5 1209). He submitted that, though the payee was free to present the cheque repeatedly within its validity period, once a demand is made and payment is not received within the prescribed period, the payee has to avail the cause of action which arose on the basis of the demand made and file the complaint, if any and that the dishonour of cheque on each re-presentation would not give raise to a fresh cause of action. He submitted that both the Courts below have committed a material error and illegality and hence, interference in the matter is warranted.
5. Sri Mahesh R. Uppin, learned advocate, on the other hand, contended that the communication sent by the payee of the cheque on 15.9.2005 is not a demand notice, but is only an intimation to drawer of the cheque with regard to the return of the cheque and he being notified to act in terms of the affidavit (Ex.P1) submitted by him, when the cheque in question was issued. He submitted that, in view of the request made by petitioner, the cheque was presented for the second time, within its validity 6 period and the same having been returned as per Exs. P.4 and P.5, a demand notice vide Ex.P.6 was issued and in view of non-payment of cheque amount, complaint vide Ex.P.10 was filed. He relied upon the decision of the Apex Court in the case of Rahul Builders Vs. Arihant Fertilizers and Chemicals and another ((2008) 2 SCC 321)) and further submitted that the return of the cheque Ex. P.3 issued by the petitioner for 'insufficient funds' being not in dispute, the complaint having been filed within the period of limitation, in view of the evidence of PW.1 supported by Exs.P.1 to P.9, which has remained un-rebutted, presumption under S.139 of the Act is attracted and hence, the learned Magistrate is justified in holding the accused guilty. Learned counsel submitted that the Appellate Court has rightly found that the intimation dated 15.9.2005 as having been issued in the course of bank's day-to-day transaction and the same being not a demand made as contemplated under S.138 of the Act, the Appellate Court is justified in holding that the said communication was not intended to be a notice as 7 stipulated under S.138 of the Act. He submitted that, having regard to the above, no interference with the impugned Judgments is warranted.
6. Perused the record. In view of the rival contentions, the issue for consideration is, Whether the intimation dated 15.9.2005 was issued by the payee, within 30 days from the date of receipt of intimation from the Bank regarding dishonour of the cheque or was it sent after the period of 30 days and can the same be construed as a demand notice to pay the dishonoured cheque amount?
7. By reason of S.138 of the Act, the issuer of a cheque would commit an offence, if, the cheque when presented for payment is dishonoured. The proviso, restricts the application of the main provision, by laying down the conditions which are required to be complied with, before any order taking cognizance can be passed. The conditions which are required to be complied with are: 8
(1) That the cheque must be presented within a period of 6 months from the date on which it is drawn;
(2) On the cheque being returned unpaid by the Banker, a notice has to be issued within 30 days from the date of receipt of information by the payee from the Bank regarding the cheque being unpaid;
(3) In the event, the drawer of the cheque fails to make the payment of the cheque amount within 15 days from the receipt thereon, the complaint is filed within the period prescribed under S. 142 of the Act.
8. In the case of Uniplas India Ltd., and another Vs. State (Government of NCT of Delhi) and another, reported in (2001) 6 SCC 8, the material facts are that, cheque was earlier presented by the payee and then it was dishonoured by the Bank and thereafter a notice was issued to the drawer on 1.12.1995, but, the payee did not file a complaint within one month of the expiry of 15 days after the said notice. The cheque was re-presented and was dishonoured by the Bank on 23.2.1996. Notice was sent on 2.3.1996 to pay the amount. As the amount was not paid within the statutory period, complaint was filed on 11.4.1996. The accused raised objection to the 9 maintainability of the complaint, on the ground that, a previous notice sent by the payee of the cheque, after it was once bounced, was enough to knock off the prosecution based on a second presentation and second bouncing of the cheque. The contention did not receive acceptance, either in the Trial Court or in the High Court. The accused, in his endeavour to secure a discharge from the case on the said ground, approached the Apex Court, by contending that the cheque was earlier presented by the payee and then it was dishonoured by the Bank and thereafter a notice was issued to the drawer on 1.12.1995, but, the payee did not file a complaint within one month of the expiry of 15 days after the said notice and hence he cannot create one more cause of action by presenting the cheque once again. In support of the contention, decision in the case of Sadandan Bhadran (supra) was relied upon. Apex Court, after noticing the fact that the notice dated 1.12.1995 was issued only after expiry of 15 days from receipt of the intimation from the Bank regarding the dishonour and in view of clause (b) of the proviso to S.138 10 of the Act, has held that the notice having not been served within 15 days from the date of the first dishonour of the cheque, no cause of action arose and since, the payee is not prevented from presenting the cheque once again within the permitted period and make use of such presentation and subsequent dishonour for a cause of action to be founded for launching the complaint as in the case before it. The ratio of the decision squarely applies to the instant case.
9. In the case of S.L.Constructions Vs. Alapati Srinivasa Rao, (2009) 1 SCC 500, the factual matrix involved is, the appellants had entered into some business transaction with respondent No.1 and appellants had issued a cheque on or about 22.6.2003. It was contended that the cheque was issued by way of security. The said cheque was presented in the Bank on 23.6.2003 and it was returned unpaid by the banker of the appellant, on the ground of insufficient funds and a notice was sent on or about 8.7.2008, which was not served upon the 11 appellants. The said cheque was again presented on 30.8.2003 and was again dishonoured and another notice was sent calling upon the drawer to pay the amount. There being no response, the cheque was presented for the 3rd time before the bank on 11.12.2003, which having been dishonoured, another notice was sent and served on 17.12.2003. Since, no payment was received to the said notice, a complaint was filed on 23.1.2004. Seeking quashing of the complaint, a Criminal Petition under S.482 Cr.P.C., was filed, by relying upon decision in the case of Sadandan Bhadran (supra), on the ground that the cheque could not have been presented after the issue of notice, since no cause of action survived. Finding that the two notices sent earlier upon the dishonouring of the cheque on both the occasions having not been served, it was held that the complainant cannot be said to have committed any illegality in presenting the cheque for the third time and issuing the notice upon the defaulter. While dismissing the petition, it was held as follows:
12
"'22. As the issuance of cheque, non-payment thereof on presentation, issuance of a valid notice calling upon the drawer of the cheque to pay the amount in question and the appellants failure to pay to the complainant the amount in question within a period of 15 days from the date of receipt of a copy of the said notice served upon them, a cause of action arose for filing a complaint petition, in our opinion, the High Court cannot be said to have committed any error in passing the impugned judgment".
10. In the case of Rahul Builders (supra), Apex Court, in an identical fact situation has held as follows:
"10. Service of a notice, it is trite, is imperative in character for maintaining a complaint. It creates a legal fiction. Operation of Section 138 of the Act is limited by the proviso. When the proviso applies, the main section would not. Unless a notice is served in conformity with proviso (b) appended to Section 138 of the Act, the complaint petition would not be maintainable. Parliament while enacting the said provision consciously imposed certain conditions. One of the conditions was service of a notice making demand of the payment of the amount of cheque as is evident from the use of the phraseology "payment of the said amount of money". Such a notice has to be issued within a period of 30 (sic 15) days from the date of receipt of information from the 13 bank in regard to the return of the cheque as unpaid. The statute envisages application of the penal provisions. A penal provision should be construed strictly; the condition precedent wherefor is service of notice. It is one thing to say that the demand may not only represent the unpaid amount under cheque but also other incidental expenses like costs and interests, but the same would not mean that the notice would be vague and capable of two interpretations. An omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law. Respondent 1 was not called upon to pay the amount which was payable under the cheque issued by it. The amount which it was called upon to pay was the outstanding amounts of bills i.e., Rs.8,72,409/-. The noticee was to respond to the said demand. Pursuant thereto, it was to offer the entire sum of Rs.8,72,409/-. No demand was made upon it to pay the said sum of Rs.1,00,000/- which was tendered to the complainant by cheque dated 30.4.2000. What was, therefore, demanded was the entire sum and not a part of it."
The ratio of the decision squarely applies to the instant case.
14
11. In the case of Tameeshwar Vaishnav (supra), the facts are, the cheque bearing No.0864961 for `40,000/- was dishonoured on the ground of insufficient funds on 16.3.2006. Another cheque bearing No.0864962 for `40,000/- was dishonoured on 22.3.2006 on the ground of insufficient funds. Consequently, the payee issued notices as contemplated under Cl.(b) of the proviso to S.138 of the Act asking the drawer to make payment of the cheque amount within 15 days. The notice was served on the drawer and the payee did not take any steps to file the complaint within the period prescribed in S.142. On the other hand, the payee sent a second notice to the drawer of the cheque in respect of two cheques, on 7.6.2006 and finding no response, he filed complaints before the learned Magistrate, on which process was issued, after recording statement of the complainant. Against the order issuing process, the accused filed Criminal Revision Petitions, which were dismissed by the learned District Judge and when questioned in Criminal Miscellaneous Petitions filed under S.482 Cr.P.C., was upheld. The accused filed Special 15 Leave Petitions, contending that the learned Magistrate has erred in taking cognizance of the complaints since the same stood barred under the provisions of proviso to S.138 of the Act, inasmuch as, the complainant did not take any action on the basis of first notice issued on 30.3.2006 and a second notice in regard to self-same cheque was barred under the proviso to S.138 of the Act. After hearing learned counsel on both sides, the point raised for the decision was, whether after the notice issued under Cl.(b) of S.138 of the Act is received by the drawer of the cheque, payee or holder of the cheque, who does not take action on the basis of such notice within the period prescribed under S.138 of the Act, is entitled to send a fresh notice in respect of the same cheque and, therefore, proceed to file a complaint under S.138 of the Act?
After noticing that the first notice was served on the payee on 14.6.2006 and the complaints were filed on 10.7.2006, it was held that the complaints were filed 16 beyond the period of limitation and the learned Magistrate erred in taking cognizance of the complaints filed on the basis of the second notice issued on 7.6.2006.
12. On careful scrutiny of the decision in Tameeshwar Vaishnav (supra), it would appear that the facts on the basis of which the said decision was rendered, noticed supra, are different. In the instant case, notice contemplated under Cl.(b) of proviso to S.138 of the Act was not issued and the cheque having been re-presented within the period of its validity and the cheque having been bounced, notice contemplated under Cl.(b) of S.138 of the Act was issued on 6.10.2005 and the complaint was filed on 28.10.2005 i.e., within the period of limitation. Hence, the decision in Tameeshwar Vaishnav has no application to the case on hand.
13. The cheque - Ex.P.3 is dated 30.7.2005. In terms of S.138 of the Act, it could have been presented within 6 months thereafter viz., 30.1.2006. Indisputably, the cheque was presented for the 2nd time on 1.10.2005. 17 i.e., within the validity period. The cheque was returned on 1.10.2005 with endorsement 'funds insufficient'. Demand notice, Ex.P.6 was sent on 6.10.2005 and was served on the petitioner on 8.10.2005. Cheque amount was not paid within 15 days period from the date of receipt of Ex.P.6. Cause of action having arisen, the complaint was filed on 28.10.2005.
14. As the issuance of the cheque is not in dispute, the presumption envisaged in S.118 of the Act can be legally inferred that the cheque was made and drawn for consideration on the date which the cheque bears. S.139 of the Act enjoins the Court to presume that the holder of the cheque received it for discharge of any debt or liability. Indisputedly, cheque was issued by the petitioner towards discharge of loan liability of Sri Shivakumar and Smt Amrutha. The cheque was returned for 'want of sufficient funds' in the account of the petitioner. Demand notice was issued and payment having not been made, complaint was filed. The burden of proof being on the accused, the same 18 having not been discharged, both the Courts below are justified in holding the petitioner guilty of the offence under S.138 of the Act and in sentencing him.
The petition being devoid of merit is dismissed. The bail bonds are cancelled and the petitioner shall surrender before the learned Magistrate to serve the remaining part of the sentence imposed on him.
Sd/-
JUDGE Ksj/-