Karnataka High Court
M.S. Srikara Rao S/O Late Seshagiri Rao vs H.C. Prakash S/O Chinnegowda on 15 November, 2012
Equivalent citations: 2013 ACD 657 (KAR), (2013) 124 ALLINDCAS 867 (KAR), 2013 (1) AIR KANT HCR 502, AIR 2013 (NOC) (SUPP) 400 (KAR.), (2013) 1 KANT LJ 283, (2013) 3 ALLCRILR 828, (2013) 1 NIJ 275, (2013) 3 ICC 345, (2013) 1 CURCRIR 201, (2013) 1 BANKCAS 160
Author: A.N.Venugopala Gowda
Bench: A.N. Venugopala Gowda
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
®
DATED THIS THE 15th DAY OF NOVEMBER, 2012
BEFORE
THE HON'BLE MR. JUSTICE A.N. VENUGOPALA GOWDA
CRIMINAL REVISION PETITION NO.356/2011
BETWEEN:
M.S. Srikara Rao,
S/o. late Seshagiri Rao,
Aged about 51 years,
Resident of Haluthota,
Bettadakolalu Village,
Bilalkoppa Post, Koppa Taluk,
Chikmagalur District.
... PETITIONER
(By Sri M.S. Raghavendra Prasad, Adv.)
AND:
H.C. Prakash,
S/o. Chinnegowda,
Aged about 51 years,
Resident of Melinaheggade,
Jayapura Post, Koppa Taluk,
Chikmagalur District.
... RESPONDENT
(By Sri Dinesh Kumar K. Rao for
Sri R.B. Deshpande, Adv.)
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This Crl.R.P. is filed under S.397 r/w 401 Cr.P.C.,
praying to set aside the order dated 10.12.2010 passed by
the Prl. Sessions Judge, Chikmagalur in Crl.A.No.109/2009
and Crl.R.P.No.143/2009 and order dated 12.06.2009
passed by the Civil Judge (Jr.Dn.) and JMFC., Koppa in
C.C.No.446/2008.
This Crl.R.P. coming on for final hearing this day, the
Court made the following:
ORDER
The material facts not in dispute are that, the respondent-complainant (for convenience hereinafter referred to as 'the complainant') had filed C.C.No. 286/2004, in the Court of JMFC, Koppa against the petitioner-accused (for convenience hereinafter referred to as 'the accused'), under S.138 of Negotiable Instruments Act, 1881 (for short 'the Act'), in relation to bounced cheque for `12,00,000/-, which had been issued by the accused. By a Judgment dated 15.2.2007, the accused was convicted and sentenced to pay fine of `24,00,000/- to the complainant. Assailing the said Judgment, the accused filed Crl.A.No.20/2007 in the Sessions Court at Chikmagalur. During the pendency of the said appeal, an 3 endeavour having been made to resolve the dispute between the parties, an agreement having been reached, the parties entered into a compromise. The appellant- accused agreed to pay a sum of `12,00,000/-, as against the fine amount of `24,00,000/-. Out of the agreed amount, the accused paid by cash `4,00,000/-, to the complainant and assured to pay the balance amount of `8,00,000/-, in installments. Towards payment of the said balance amount, the accused issued four post dated cheques bearing Nos.0706011, 0706012, 0706013 and 0706014, drawn on Chikmagalur-Kodagu Grameena Bank, Agalagandi branch. The complainant presented for encashment, the cheque bearing No.0706012, dated 12.3.2008, for `2,50,000/-, which bears signature of the accused. The bank returned the cheque on 12.3.2008, with an endorsement 'payment stopped by the drawer'. The complainant issued a notice on 8.4.2008, calling upon the accused to pay the cheque amount within 15 days. Notice sent by RPAD with the description 'M.N.Srikara Rao' S/o Late Sheshagiri Rao, Agriculturist, r/o Haluthota, 4 Bethadakolalu, Koppa Taluk was returned for the reason, 'an initial of the addressee differs'. However, notice sent by certificate of posting with the same description, to the same address, was not returned. Since, payment was not made, a private complaint was filed, under S.138 of the Act, before the JMFC at Koppa. Cognizance was taken. Case was registered and process was issued. The accused denied having received notice from the complainant regarding dishonour of cheque and also the liability to pay the cheque amount. It was inter alia contended that, there being no cause of action, i.e., for not giving and/or serving notice contemplated under S.138(b) of the Act, the complaint is not maintainable. The complainant examined himself as PW-1 and Exs.P1 to P6 was marked. Ex.P1 is the cheque and Ex.P1(a) is the signature of the accused on the cheque. Ex.P2 is the cheque return endorsement of the Bank. Ex.P3 is copy of the legal notice dated 8.4.2008. Ex.P4 is the RPAD receipt. Ex.P5 is acknowledgment for certificate of posting of the notice/Ex.P3. Ex.P6 is another copy of the said notice and 5 Ex.P6(a) is the returned RPAD envelope. PW-1 was not cross-examined. The accused examined himself as DW-1.
2. The learned Trial Judge, noticing the admissions of the accused/DW-1, that he was convicted in C.C. No.286/2004 and was ordered to pay fine/compensation of `24,00,000/- to the complainant; the appeal filed thereagainst; the issuance of cheque Ex.P1 to the complainant and also his liability to pay the amount in terms of the compromise entered into the criminal appeal, held that the cheque/Ex.P1 was issued to the complainant in order to discharge the legal liability. The contention that the demand notice Ex.P3/P6 was not given/served was repelled. The cheque amount having not been paid, the accused was found guilty. Accused was convicted for the offence under S.138 of the Act and was sentenced to undergo imprisonment for a period of 6 months and pay fine of `5,000/- and in default of payment of fine amount, to undergo simple imprisonment for a period of one month.
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3. Assailing the said Judgment, the accused filed Crl.A.No.109/2009, in the Sessions Court at Chikmagalur. The complainant filed Crl.R.P.No.143/2009, to modify the sentence and direct payment of double the cheque amount as the compensation. Learned Sessions Judge having considered the rival contentions and examined the record of the case, after reappreciation of the evidence, by a common Judgment, dismissed the appeal filed by the accused and allowed in part, the revision petition filed by the complainant. Apart from the sentence of imprisonment and fine imposed by the Trial Court, the accused was ordered to pay compensation of `3,00,000/- to the complaint, in default, was directed to undergo imprisonment for a further period of 6 months. However, the imprisonment under the default clause was ordered to run concurrently.
4. As the signature (Ex.P1(a)) in the cheque (Ex.P1) is admitted to be that of the accused, the presumption envisaged under S.118 of the Act can be legally inferred, 7 that the cheque was made or drawn for consideration on the date which the cheque bears. S.139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. In the case of Rangappa Vs. Sri Mohan, (2010) 11 SCC 441, Apex Court has held that the presumption mandated by S.139 includes a presumption that there exists a legally enforceable debt or liability, which being a rebuttable one, it is open to the accused to raise a defence, wherein, the existence of a legally enforceable debt or liability can be contested.
5. In the aforenoticed factual background and the admissions of the accused/DW-1, in my opinion, the accused has failed to rebut the statutory presumption. The cheque was returned by the Bank along with Ex.P2, for the reason, 'payment stopped by the drawer'. In the case of M.M.T.C Ltd., Vs. Medchl Chemicals and Pharma (P) Ltd., (2002) 1 SCC 234, Apex Court has held that, 'if the accused shows that in his account there was sufficient fund 8 to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer's Bank and that the stop-payment notice had been issued because of some other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then the offence under S.138 would not be made out'. However, it was made clear that the burden of so proving would be on the accused. In the instant case, the accused has failed to produce any proof that there was sufficient fund in his account for the bank to clear the amount in the cheque/Ex.P1, at the time of its presentation. Accused has not stated the reason, for instructing his bank to stop payment of the cheque. In the circumstances, the one and the only inference which can be drawn is that, 'the stop payment instruction' issued by the accused was on account of 'insufficient fund' in his bank account and not for any other valid cause. Thus, the statutory presumption under S.139 of the Act has not been rebutted by the accused.
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6. Taking into consideration the factual scenario and the record of the case, the sole contention urged for consideration by Sri M.S.Raghavendra Prasad, learned advocate, appearing for the petitioner is that, the basic requirement of initiation of proceeding is service of notice and there being incorrect description of the addressee on the notice and also on the postal envelopes, i.e., 'an initial' being different, as is evident from Exs.P3 and P6(a), there being no service of the statutory notice, in view of the conditions incorporated in clauses (b) and (c) of the proviso to S.138 of the Act having not been fulfilled, the complaint, which has no cause of action, ought to have been dismissed as not maintainable. He submitted that the impugned Judgments are illegal and interference is warranted.
7. Sri Dinesh Kumar K. Rao, learned advocate, appearing for the respondent, on the other hand, by placing reliance on the decision in the case of Gujarat Electricity Board and another Vs. Atmaram Sungomal 10 Poshani, (1989) 2 SCC 602, supported the view taken in the matter by the Courts below. He submitted that the notice given by the complainant was evaded by the accused with dishonest intention. He further submitted that the Courts below have noticed the material aspects of the case and there being a correct view taken, no interference is warranted.
8. Perused the record. In view of the rival contentions, the point to be decided is:
Whether the cause of action to prosecute has not arisen at all, as the notice sent by the complainant to the accused was returned with an endorsement, 'the addressee's initial differs' ?
9. The conditions pertaining to the notice to be given to the drawer of a returned/bounced cheque have been formulated and incorporated in clauses (b) and (c) of the proviso to S.138 of the Act. In the instant case, the complainant, after the cheque was returned on 12.3.2008, with an endorsement 'payment stopped by the drawer', gave the notice (Ex.P3/P6) by RPAD on 8.4.2008. The 11 addressee was shown as 'Sri M.N.Srikara Rao', S/o Late Sheshagiri Rao, Agriculturist, R/o Haluthota, Bethadakolalu Village, Belalukoppa Post, Koppa-Taluk, Chickmagalur District. The initial of the person ought to have been shown as 'M.S' instead of 'M.N'. In all other aspects, admittedly, there is correct description/residential address of the accused. The postman returned the RPAD envelope with an endorsement 'the addressee's initial differs'.
10. In the case of Madan & Co., Vs. Wazir Jaivir Chand, (1989) 1 SCC 264, in the matter of service of statutory notice by a landlord of the premises on the tenant, through registered post only, required by a rent statute, keeping in view the S.27 of the General Clauses Act, 1897, it has been held as follows:
"6. We are of opinion that the conclusion arrived at by the courts below is correct and should be upheld. It is true that the proviso to clause (i) of Section 11(1) and the proviso to Section 12(3) are intended for the protection of the tenant. Nevertheless it will be easy to see that too strict and literal a compliance of their language would be impractical and unworkable. The proviso insist that before any amount 12 of rent can be said to be in arrears, a notice has to be served through post. All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgement due or otherwise) containing the tenant's correct address. Once he does this and the letter is delivered to the post office, he has no control over it. It is then presumed to have been delivered to the addressee under Section 27 of the General Clauses Act. Under the rules of the post office, the letter is to be delivered to the addressee or a person authorised by him. Such a person may either accept the letter or decline to accept it. In either case, there is no difficulty, for the acceptance or refusal can be treated as a service on, and receipt by, the addressee. The difficulty is where the postman calls at the address mentioned and is unable to contact the addressee or a person authorised to receive the letter. All that he can then do is to return it to the sender. The Indian Post Office Rules do not prescribe any detailed procedure regarding the delivery of such registered letters. When the postman is unable to deliver it on his first visit, the general practice is for the postman to attempt to deliver it on the next one or two days also before returning it to the sender. However, he has neither the power nor the time to make enquiries regarding the whereabouts of the addressee; he is not expected to detain the letter until the addressee chooses to return and accept it; and he is not authorised to affix the letter on the premises because of the assessee's absence. His responsibilities cannot, therefore, be 13 equated to those of a process server entrusted with the responsibilities of serving the summons of a court under Order V of the CPC. The statutory provision has to be interpreted in the context of this difficulty and in the light of the very limited role that the post office can play in such a task. If we interpret provision as requiring that the letter must have been actually delivered to the addressee, we would be virtually rendering it a dead letter. The letter cannot be served where, as in this case, the tenant is away from the premises for some considerable time. Also, an addressee can easily avoid receiving the letter addressed to him without specifically refusing to receive it. He can so manipulate matters that it gets returned to the sender with vague endorsements such as "not found", "not in station", "addressee has left" and so on. It is suggested that a landlord, knowing that the tenant is away from station for some reasons, could go through the motions of posting a letter to him which he knows will not be served. Such a possibility cannot be excluded. But, as against this, if a registered letter addressed to a person at his residential address does not get served in the normal course and is returned, it can only be attributed to the addressee's own conduct. If he is staying in the premises, there is no reason why it should not be served on him. If he is compelled to be away for some time, all that he has to do is to leave necessary instructions with the postal authorities either to detain the letters addressed to him for some time until he 14 returns or to forward them to the address where he has gone or to deliver them to some other person authorised by him. In this situation, we have to choose the more reasonable, effective, equitable and practical interpretation and that would be to read the word "served" as "sent by post", correctly and properly addressed to the tenant, and the word "receipt" as the tender of the letter by the postal peon at the address mentioned in the letter. No other interpretation, we think, will fit the situation as it is simply not possible for a landlord to ensure that a registered letter sent by him gets served on, or is received by, the tenant."
(Emphasis supplied)
11. In the case of C.C. Alavi Haji Vs. Palapetty Muhammed and another, (2007) 6 SCC 555, on the matter pertaining to the question of service of notice in terms of Clause (b) of proviso of S.138 of the Act, Apex Court has held as follows:
"10. It is, thus, trite to say that where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the GC Act would be attracted; the requirement of Clause (b) of proviso to Section 138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in Clause (c) of the said proviso for payment by the drawer of the cheque.15
Nevertheless, it would be without prejudice to the right of the drawer to show that he had no knowledge that the notice was brought to his address.
**** **** ****
14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a 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. (Vide Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647 ; State of M.P. v. Hiralal, (1996) 7 SCC 523 and V. Raja Kumari v. P. Subbarama Naidu, (2004) 8 SCC 774. It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by 16 the accused or that the accused had a role to play in the return of the notice unserved.
15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the court to draw presumption or inference either under Section 27 of the GC Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, 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. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque.
It is well settled that at the time of taking cognizance of the complaint under Section 138 of the Act, the court is required to be prima facie satisfied that a case under the said section is made out and the aforenoted mandatory statutory procedural requirements have been complied with. It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In our opinion, this interpretation of the provision would effectuate the object and purpose for which proviso to Section 138 was 17 enacted, namely, to avoid unnecessary hardship to an honest drawer of a cheque and to provide him an opportunity to make amends."
(Emphasis supplied)
12. The postal endorsement Ex.P6(a) makes it clear that the addressee - accused has avoided to receive the letter addressed to him without specifically refusing to receive it. There is a scheming act on the part of the accused, to avoid the service of Ex.P6. Because of his act in pointing out the difference in the initial 'M.S.' instead of 'M.N.', the notice given and sent was returned, which can be attributed to the accused's own conduct. The address shown on the postal communications, concededly, is the correct residential address of the accused. Hence, it is for the accused to prove that the postman did not tender to him the registered envelope containing Ex.P6. On account of the scheming act of avoidance by the addressee i.e., the accused, the postman has returned the RPAD envelope containing Ex.P6 to the complainant.
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13. Undeniably, the cheque Ex.P1 was issued by the accused in a judicial proceeding i.e., in Crl.A.No.20/2007, for discharge of his legal liability. The cheque when presented for encashment was returned for the reason 'payment stopped by the drawer'. The accused has failed to prove, that on the date when the cheque Ex.P1 was presented for encashment, there was sufficient fund in his bank account for the clearance. The accused has failed to rebut the presumptions under Ss.118 and 139 of the Act. The accused in the circumstances of the case has to be termed as 'an un-scrupulous drawer', who never intended to honour the cheque issued by him, that too, in a judicial proceeding, to avoid his imprisonment, as he had been found guilty and had been sentenced in C.C.No.286/2004.
14. The accused, who claimed that he did not receive the notice sent by post, could within 15 days of receipt of the summons from the JMFC in respect of the complaint, under S.138 of the Act, if were to be a honest drawer, could have made the payment of the cheque amount and 19 submitted to the Magistrate, that he could not make the payment within 15 days, since the notice envisaged under S.138(b) was not given or was not served on him. Upon the payment, he had the opportunity to seek rejection of the complaint. The accused, who did not pay the cheque amount within 15 days of receipt of the summons from the Court, along with the copy of the complaint under S.138 of the Act, cannot contend that there was no service of notice as required under S.138 of the Act, by ignoring the statutory presumption to the contrary under S.27 of the General Clauses Act. The ratio of law with regard to question of service of notice, laid down in the cases of Madan & Co. and C.C. Alavi Haji (supra), squarely applies to the instant case. Hence, the only contention urged for the accused by his learned counsel being devoid of merit, thus, stands negated.
In the result, the petition is dismissed. The amount, if any, in deposit, be released in favour of the complainant. The accused is granted time till 31st December 2012, to 20 deposit the balance compensation amount, in the Trial Court. In case of default, the bail bond and surety furnished by the accused shall stand cancelled and the accused shall surrender before the Trial Court to serve out sentence.
Sd/-
JUDGE Ksj/-