Andhra HC (Pre-Telangana)
Polisetty Seetharamanjaneyulu And ... vs Public Prosecutor, High Court Of A.P. on 29 July, 2005
Equivalent citations: 2005(2)ALD(CRI)537, 2005CRILJ4297, 2005 CRI. L. J. 4297, 2006 (1) ALL LJ NOC 72, 2006 (1) AJHAR (NOC) 244 (AP), 2006 (1) AKAR (NOC) 9 (AP), (2006) 1 CIVILCOURTC 425, (2006) 1 RECCRIR 369, (2006) 1 ICC 776, (2006) 1 ALLCRILR 579, (2006) 2 CIVLJ 154, 2005 (3) ANDHLT(CRI) 378 AP, (2005) 3 ANDHLT(CRI) 378, 2005 (2) ALD(CRL) 537
ORDER P. Swaroop Reddy, J.
1. This revision case is filed against the judgment of the learned 1st Additional Sessions Judge, Ongole in Crl. A.No. 198 of 2002, in which the" learned Judge confirmed the conviction of the present petitioners, imposed by the learned IIIrd Additional Judicial Magistrate of First Class, Ongole in C.C. No. 76 of 2001 for an offence under Section 138 of the Negotiable Instruments Act. The learned Magistrate convicted A-l company and A-2 and A-3, its partners, for the offence under Section 138 of the Negotiable Instruments Act and sentenced A-2 and A-3 to simple imprisonment for six months each and directed to pay compensation of Rs. 5.00 lakh (Rs. Five Lakhs) each, in default to undergo simple imprisonment for three months each. The learned Magistrate also sentenced A-l to pay fine of Rs. 500.00 in default to undergo simple imprisonment for three months.
2. The case arose out of a private complaint filed by the complainant, the present second respondent, under Section 138 of the Negotiable Instruments Act. The allegation is that the complainant is a partner of A-l firm, which does Tobacco business. A-l to A-3 had regular business dealings with the complainant since 8-9 years. The complainant used to supply tobacco to the accused; the accused used to pay the value of the tobacco supplied to them by way of cheque. A-2 and A-3 used to sign the cheques and invoices. On 18-9-2000 the complainant supplied tobacco weighing 81,144 kgs. at the rate of Rs. 18.50 per kg. worth Rs. 15,01,164.00 at Throvagunta godown of the accused. At the time of receipt of the stock, A-2, one of the partners of the company signed the invoice dated 18-9-2000 with a promise to pay the amount within one month, A-3. with the knowledge of A-2, got issued a cheque on 13-10-2000 for Rs. 15,00,000.00, drawn on Vysya Bank, Guntur towards discharge of legally enforceable debt due under the invoice dated 18-9-2000, being the value of 81,144 kgs. of tobacco supplied, when the complainant presented the cheque for realization, on four occasions, it was dishonored for want of funds. The complainant got issued statutory lawyer's notice on 7-2-2001. to the accused calling upon them to pay the due to the complainant. The accused managed to get the notice returned.
3. The accused denied the offence.
4. On behalf of the prosecution P.Ws. 1 to 3 were examined and Exs. P-l to P-57 were marked.
5. The accused in their statement under Section 313, Cr. P.C. simply denied the incriminating material appearing against them in the complaint and evidence and got marked Exs. D-l to D-4, certain invoices signed by P.W. 1.
6. The learned Magistrate formulated the following six questions for consideration :
i) Whether P.W. 1 is having locus standi to institute the complaint on behalf of the complainant firm or not?
ii) Whether the complainant could be. Able to establish the cheque in question Ex. P-47 said to have been issued by A-3 for discharge of legally enforceable debt or liability?
iii) Whether the complainant could be able to establish the transaction in between the complainant firm and accused?
iv) Whether the partnership deed dated 10-12-1997 (Ex. P-31) is valid or it is fabricated as alleged by the accused or the mistake crept in Ex. P-31 regarding the dates are (sic) any affect to the case of the complainant?
v) Whether the complaint is barred by virtue of under Section 62 of the Partnership Act, 1932?
vi) Whether the statutory notice (Ex. P-50) is strictly prescribed under Section 138(b) and (c) of the Negotiable Instruments Act?
and held that the case against the accused is proved. The learned Sessions Judge confirmed the same.
Now, the contention of the learned counsel for the petitioners is that.:
P.W. 1 has no locus standi to file the complaint;
There is no material to show that the cheque was issued towards legally enforceable liability;
That the complainant firm was not properly registered as such the complaint is not maintainable? and The statutory notice as contemplated under Section 138(b)(c) of the Negotiable Instruments Act is not at all served?
7. The learned counsel, has strongly pressed about the statutory notice not being served.
8. Now, the point for consideration is whether there are any grounds for allowing the revision case.
9. It is a case where there is not much dispute about A-3 issuing the cheque Ex. P-47, in favour of the complainant and A-2 signing the invoice Ex. P-46. though an attempt was made to say that as the accused and the complainant were having very close business relations, a blank cheque, Ex. P-47 was taken by the complainant.
10. With regard to the question whether P.W. 1 has no locus standi to file the complaint, the consistent finding of both the Courts below has been that P.W. 1 is the managing partner of the firm, as revealed from Ex. P-31. The accused tried to rely on Ex. P-42, the Income-tax Return to show that another partner has filed the same and on Exs. D- l to D-4 which show that P.W. 1 is the proprietor, to contend that P.W. 1 was not the Managing partner and he has no locus standi to file the complaint. Like both the Courts below, I am not inclined to accept the contention of the petitioners that P.W. 1 has no locus standi to file the complaint as there is no documentary evidence to show the same. Even assuming that he was not the managing partner also, he is definitely a partner and there is no impediment for him to file the complaint. However, my finding is that he was the Managing Partner only.
11. With regard to the question whether the cheque was not issued towards a legally enforceable debt, this plea appears to be only a formal one. There is sufficient material on to show that tobacco was supplied and necessary invoices were signed by A-3. The accused suggested to P.W. 1 that on account of faith in the complainant, blank cheques were collected, which is denied. P.W. 1 has stated that all the transactions that took place between them and the accused are shown in the account book maintained by them, he has given all the details with regard to the ledgers and invoices. According to him, they delivered the tobacco in their Throvagunta branch from 9-9-2000 to 13-9-2000. but the invoice was raised on 18-9-2000. A-2 put his signature on the Invoice. Ex. P-46 on behalf of A-1 firm. There are no suggestions to P.W. 1 saying that the goods are not supplied. The accused in their statement under Section 313, Cr. P.C., have also not stated anything saying that the goods were, not supplied. Thus, this question is also answered against the petitioners.
12. Coming to the question whether the complainant-firm was not properly registered and the complaint is not maintainable, Ex. P-54 shows that the firm was registered on 25-1-2001; as such the firm is not properly registered and cannot maintain the corn-plaint, is not tenable.
13. Now I will consider the main question as to whether there was proper service of notice on the appellant as required under law?
14. Paragraphs (e) and (f) of the complaint are extracted below :
"(e) Complainant got issued a statutory notice to the accused .dated 7-2-2001 to the addresses of their business place as well as the house calling upon them to pay the debt of Rs. 15,00,000.00 (Rs. Fifteen Lakhs only) 'due to the complainant within 15 days of receipt of the said notice. Accused voluntarily avoided receiving the notices sent to business place as well as house address. The notice sent to business place was returned on 12-2-2001 and the notice sent to house address was returned on 16-2-2001.
(f) Despite of sending statutory notice to the correct address of the accused, they managed to return the notices. The registered notices having been sent to correct addresses of the accused. They are deemed to have been served upon the accused. Hence all the accused are held liable for offence under Section 138 of N.I. Act. Hence the complaint."
As per which notices were sent and the accused managed to return the same. The evidence of P.W. 1 is that the notices were sent to the business, as well as the house address of the accused. Office copy of the lawyer notice is marked as Ex. P-50. The registered lawyer notices were returned on the ground, not available in the station. Un-served registered covers being Exs. P-51 and 52. P.W. 1 has also stated that the accused managed and got the two registered covers returned with false endorsement. In the cross-examination of P.W. 1 nothing is elicited to show that the evidence that the accused managed to get the notices returned is incorrect. It is not even suggested to P.W. 1 that such evidence is false. In Section 313, Cr. P.C. statement also nothing is stated, though a specific question was put about the notice, nor any evidence is adduced on behalf of the accused to show that the allegation in the complaint is incorrect. Thus, in the complaint, there is averment about the accused managing to get the notices returned, P.W. 1 in his evidence has stated similarly and in his cross-examination nothing is elicited; nothing is even suggested and there is no evidence or plea on behalf of the accused about non-service of notice. The endorsement on Ex. P-51 shows that for four days i.e., on 12, 13, 14 and 15-2-2001, the postman has tried, on which days he has recorded absent and on 16-2-2001, he has endorsed not available returned to sender. Thus for five consecutive days, the postman has tried to serve the notice. The accused never took any plea either by way of suggestion to P.W. 1 or in their examination under Section 313, Cr. P.C. or by examining any witness saying that they were not in the station during those days or they were sent to incorrect address, or the return endrosement was wrongly made and notices were wrongly returned. As per R. 143 of Post Office Manual, notice has to be returned after seven days; but in this case, only after five days notices were returned. I am not inclined to give much weight to this omission on the part of the postman to wait for two more days. These facts establish that Ex. P-50 notice was sent the same was returned. The complainant has alleged that the accused managed to get the notice returned, the accused never denied the same by suggesting to P.W. 1 in his evidence nor by examining any witnesses on their behalf.
15. The question is what is the position in such circumstances.
16. The learned counsel for the petitioners relied on a decision of the Hon'ble Supreme Court in V. Raja Kumari v. R. Subbarama Naidu, 2005 (1) Andh LD (Cri) 119 : 2005 Cri LJ 127 (SC). In that case, the complainant got issued legal notice on 9-8-1997 through his advocate to the correct address of the accused. In the complaint, it was stated that the notice was returned with an endorsement that the door of the house of the accused was locked. The learned Magistrate recorded the sworn statement of the complainant and basing on that opined that Section 138 of the Act, contemplates mandatory notice and in that case notice was not served on the accused and mere sending of notice by the complainant to the accused cannot be taken into consideration and dismissed the complaint. The complainant filed revision in the High Court and the High Court held that the procedure followed by the Magistrate is incorrect; that the complainant complied with the requirement of law by sending the registered legal notice, non-service of notice is not a ground for rejecting the complainant, even before it is numbered, what is the effect of non-service, when the door of the house of the accused was closed, has to be considered after trial.
17. Before the Hon'ble Apex Court it was contended by the learned counsel for the accused that the basic requirement for initiation of the proceedings is service of notice, if the complainant does not show that that notice has been served, it has to be thrown out: at the threshold and the learned Magistrate was right. In support of his contention, the learned counsel relied on a decision in Shakti Travel and Tours v. State of Bihar, contending that when the complainant did not assert that the demand notice has been served, the complaint was not maintainable. It was contended on behalf of the complainant that the complainant indicated in the complaint that the accused managed to get an endorsement about the house being locked, that was an incorrect endorsement and the High Court rightly held that the effect of the endorsement has to be considered during trial.
18. The Hon'ble Supreme Court observed that, from the available facts in the case of Shakti Travels, 2001 AIR SCW 2307 (supra), there was no mention in the complaint about the service of notice and that in the case on hand; there was assertion about incorrect endorsement, regarding locking of the house the effect of such endorsement has to be adjudged during trial.
19. Thus, that was a case where the complaint was rejected at the threshold, even before the summons was issued to the accused, unlike the present case where the trial is completed.
20. In the above decision, the Hon'ble Supreme Court observed that the important point that has to be decided is whether cause of action has arisen at all, as the notice sent by the complainant to the accused was returned with the endorsement "house being locked."
"If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by-different strategies and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that the Court should not adopt an interpretation, which helps a dishonest evader, and clips an honest payee, as that would defeat the very legislative measure."
Thus the Hon'ble Supreme Court cautioned that the Court should not adopt an interpretation which helps dishonest evader, and clips an honest payee.
21. Further, in paragraph 11, the Hon'ble Supreme Court observed that :
"In Maxwell's Interpretation of Statutes, the learned author has emphasised that "provisions relating, to giving of notice often receive liberal interpretation" (vide P. 99 of the 12th Edition). The context envisaged in Section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the Legislature, The words in Clause (b) of the proviso to Section 138 of the Act show that the payee has the statutory obligation to "make a demand" by giving notice. The thrust in the clause is on the need to "make a demand." It is only the mode for making such demand, which the Legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is dispatched his part is over and the next depends on what the sendee does."
22. In paragraph 12 of the judgment, relying on Harcharan Singh v. Shivrani, and Jagdish Singh v. Natthu Singh, , it is observed that "it is well settled that a notice refused to be accepted by the addressee can be presumed to have been served on him."
23. In paragraph 13 of the judgment, the Hon'ble Supreme Court referring to Section 27 of the General Clauses Act, 1897, where the meaning of "service" is considered, which is in favour of the sender of the notice and observed that:
"Service shall be deemed to be effected by properly addressing, preparing and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
24. In paragraph 14, the Hon'ble Supreme Court observed :
"in case where a sender has dispatched the notice by post with the correct address written on it, it can be deemed to have been served on the sendee unless he proves that it was hot really served and that he was not responsible for such non-service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice."
Thus the Hon'ble Supreme Court burdened the sendee also to prove that, it. was not really served and that he was not responsible for such non-service. 25. The Hon'ble Supreme Court also referred to a decision in State of M.P. v. Hiralal, wherein it was held :
"In view of the office report, it would be clear that the respondents obviously managed to have the notice returned with postal remark "not available in the house," "house locked" and "shop closed" respectively. In that view, it must be deemed that the notices have been served on the respondents."
26. In paragraph 18 of the judgment, the Hon'ble Supreme Court referred to the following observation : "In Clause (c) of the proviso the drawer of the cheque is given fifteen days from the date of receipt of said notice for making payment. This affords clear indication that 'giving notice' in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment. The payee has to perform the. former process by sending the notice to the drawer in his correct address, if receipt or even tender of notice is indispensable for giving the notice in the context envisaged in Clause (b) an evader would successfully keep the postal article at bay at least till the period of fifteen days expires. Law shall not help the wrong doer to take advantage of his tactics. Hence the realistic interpretation for the expression 'giving notice' in the present context is that, if the payee has dispatched notice in the correct address of drawer reasonably ahead of the expiry of fifteen days, it can be regarded that he made the demand by giving notice within the statutory period. Any other interpretation is likely to frustrate the purpose for providing such a notice" made in Madhu v. Omega Pipes Ltd., 1994 (1) Andh LT (Cri) 603 (Ker).
27. Finally the Hon'ble Supreme Court held that the burden is on the complainant to show that the accused has managed to get incorrect postal endorsement made. Where material is brought to show that there was false endorsement about the non-availability of the noticee, the inference that has to be drawn has to be adjudged on the background facts of each case.
28. The learned counsel for the petitioners relied on the observation of the Hon'ble Supreme Court that the burden is on the complainant to show that, the accused has managed to get an incorrect postal endorsement made and that it is mandatory that the notice being served.
29. The learned counsel for the respondent contends that most of the observations of the Hon'ble Supreme Court in the above decision are, in fact, in favour of the respondent.
30. The learned counsel for the petitioners relied on a decision of our High Court in A. Sudershan v. Manneri (Shabir), 1997 (2) Crimes 707, wherein it was held that when the notice was sent under Section 138(b)(c) of the Negotiable Instruments Act and when it is returned with endorsement that the sendee is not available for seven continuous days, there cannot be a presumption of service of notice. In that case, P.W. 1, who gave evidence with regard to service did not state in his evidence that the accused was evading service of notice. In that decision also, a reference to Section 27 of the General Clauses Act, 1897 is made. However, ultimately, it was held that there is remote possibility for presuming that the notice is served in case it is returned unserved after seven days.
31. In another decision in Ramanna v. T. Jayaprakash, 1998 (2) Crimes 179, relied on by the learned counsel for the petitioners, it was held that "in the absence of a statement in the complaint that notice was served on a particular date, mere production of postal, certificate disclosing positive dispatch of notice to the accused, is insufficient to infer service and, that too, on a particular date. In that case there was no statement by the complainant that a notice was sent and returned, as the accused managed to get it returned, ultimately the prosecution was quashed.
32. In another decision of our High Court in Yadalapalli Satyam v. K. Seetharamanjaneyulu, 2005 (1) Andh LD (Cri) 473 : 2005 Cri LJ 2489 (AP), relied on by the petitioners it was held that return of notice with postal endorsement not available is not sufficient, unless there is proof that there was service of notice or that the endorsement was managed by the accused, it cannot be said that there was valid service." That was a case where there was no evidence on behalf of the complainant to show that the accused managed to get the notice returned. On the other hand, the accused examined the Village Administrative Officer, as D.W. 1 to show that he was absent during that period.
33. The learned counsel for the respondent-complainant relied on a decision of our High Court in Aparna Agencies v. P. Sudhakar Rao, 1999 (5) Andh LD 16 : 2000 Cri LJ 1005 wherein It was held "in cases where a notice was sent to correct address by registered post, when it was returned with an endorsement addressee out of station, door locked for seven days, it is sufficient to hold deemed service in view of the presumption under Section 27 of General Clauses Act, 1897."
34. The learned counsel for the respondent-complainant as allegedly referred also relied upon the decision of the Supreme Court in V. Raja Kumari, 2005 Cri LJ 127 (supra), which is cited by the learned counsel for the appellants.
35. The learned counsel for the petitioners very strongly relied on the observation of the Hon'ble Supreme Court in Raja Kumari's case, 2005 Cri LJ 127 (supra) where the Hon'ble Supreme Court held that the burden is on the complainant to show that the accused managed to get the incorrect endorsement made.
36. In the present case, as already held, in the complaint, it is averred that the accused managed to get the notice returned. P.W. 1 also deposed to the same effect. It is not even suggested to P.W. 1 saying that such an allegation is incorrect. The accused in their examination under Section 313, Cr. P.C., for question Nos. 8 and 12 answered as under :
Q. No. 8 : P.W. 1 further stated on 72-2001 he got issued a lawyer's notice to you intimating the fact of the cheque and calling upon you to pay the amount due under the cheque. He addressed notice to your house address as well as business address. Office copy of lawyer's notice is Ex. P-50. Two registered lawyer's notices were returned on the ground that; the addressee is not available in the station and left. He further stated that you accused managed and got returned the two registered covers with false endorsements. He further stated that you accused intentionally got issued a cheque without having "sufficient funds." What do you say?
The accused have simply stated "FALSE."
Question No. 12 Do you wish to state anything, the accused have stated that they have not committed the offence.
37. The accused never stated that the notice was sent to a wrong address; they have not got managed to return the notice or that they were out of station during that period. It is also not suggested to P.W. I that the notices were sent to wrong address or that they were out of station during that. period. Thus, I feel that the complainant has sufficiently proved that the accused got managed to return the notice and that is sufficient, compliance of Section 138(b)(c) of the Negotiable Instruments Act.
38. I feel that the equilibrium shall be always in favour of the complainant. The requirements under Section 138(b)(c) of the Negotiable Instruments Act are in the nature of only formality of making demand and the interpretation with regard to service shall be always in favour of the complainant, as observed by the Hon'ble Supreme Court that "a trickster and dishonest evader would always try to take advantage of the situation of the alleged non-service that he knows by successfully evading, he would get rid of the liability" and as further observed by the Hon'ble Supreme Court "the Court should not adopt an interpretation, which helps a dishonest evader and clips an honest payee, as that would defeat the very legislative measure."
39. Thus in view of the latest decision of the Hon'ble Supreme Court in Raj Kumari's case, 2005 Cri LJ 127 (supra), where the legal position is elaborately discussed and as the facts of the present case are very closely applicable to the circumstances referred in the above decision, 1 hold that there is compliance of the provisions of Section 138(b)(c) of the Negotiable Instruments Act, as there is sufficient material on behalf of the complainant and the accused have not even taken minimum steps to refute the same.
40. In these circumstances, I hold that there are no grounds to interfere with the findings recorded by the learned trial Judge, as confirmed by the learned Appellate Judge and allow the revision case.
41. Accordingly the revision case is dismissed.