Kerala High Court
Aniyan Thomas Chacko vs Thevarvelil Bankers on 16 August, 2006
Author: R. Basant
Bench: R.Basant
IN THE HIGH COURT OF KERALA AT ERNAKULAM
Crl Rev Pet No. 2824 of 2006()
1. ANIYAN THOMAS CHACKO,
... Petitioner
Vs
1. THEVARVELIL BANKERS,
... Respondent
2. STATE OF KERALA, REPRESENTED BY
For Petitioner :SRI.MVS.NAMBOOTHIRY
For Respondent : No Appearance
The Hon'ble MR. Justice R.BASANT
Dated :16/08/2006
O R D E R
R. BASANT, J.
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Crl.R.P.No. 2824 of 2006
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Dated this the 16th day of August, 2006
O R D E R
Can the cause of action under Section 142(b) of the N.I. Act be said to commence from the date on which a defective notice, against which specific objection is taken by the payee of the cheque, is received? Will the clock of limitation start ticking on the lapse of 15 days from the date of receipt of such notice? These are the crucial questions that arise for consideration in this revision petition directed against a concurrent verdict of guilty, conviction and sentence.
2. To the skeletal fact first. The signature in the cheque is admitted. Handing over of the cheque is also admitted. Transactions between the parties is not disputed. The cheque is for an amount of Rs.50,000/- It bears the date 10.6.2002. The cheque was admittedly dishonoured on the ground of insufficiency of funds. It was initially dishonoured in June, 2002. A notice of demand, Ext.D4, was issued on 29.6.2002. Ext.P8 reply was given to Ext.D4 notice. In Ext.P8 a Crl.R.P.No. 2824 of 2006 2 contention was raised that no such cheque was issued at all. The complainant then realised that a very crucial mistake had crept into the notice, Ext.D4, sent by him. The cheque was actually drawn on the State Bank of Travancore. But in the notice sent by the counsel, Ext.D4, there was a crucial, grave and vital error in describing the cheque as one issued by the Indian Overseas Bank, Pathanamthitta. The complainant was faced with a dilemma. He could proceed with the prosecution and request the court to ignore the error committed in the name of the bank on which the cheque was drawn. In the alternative he could disregard the notice, Ext.D4, the same being crucially and vitally defective and present the cheque again for encashment. The complainant appears to have been advised to follow the latter course. He presented the cheque again. It was dishonoured again on the ground of insufficiency of funds. Ext.P5 notice of demand was thereupon issued. This notice was duly received and acknowledged by the accused. It did not evoke any response. The complainant, in these circumstances, came to court with a complaint under Section 138 of the N.I. Act after scrupulously following the statutory time table. The complainant examined himself as PW1 and proved Exts.P1 to Crl.R.P.No. 2824 of 2006 3 P10.
3. The accused in Ext.P8 reply took up a defence of total denial. When he received Ext.P5 notice, he did not respond at all. But in the course of the trial the petitioner/accused took up a contention that the amount due under Ext.P2 cheque has already been paid and discharged under Exts.D5 and D6 receipts. Ext.D5 is a receipt for Rs.30,000/- dt.4.11.2000. Ext.D6 is another receipt dt. 20.7.2001 for Rs.20,000/- According to the accused, the amount due under Ext.P2 cheque - Rs.50,000/- - had already been paid and discharged under Exts.D5 and D6. The accused took up a further contention that Ext.P2 cheque was not issued for the due discharge of any legally enforcible debt/liability. It was issued as a blank signed cheque when the parties entered into the transaction as security for due repayment. Though the amount was repaid under Exts.D5 and D6, the complainant did not return the blank signed cheque. This in short is the contention raised. No oral evidence was adduced by the accused. Exts.D1 to D6 were marked.
4. I have already referred to Exts.D4 to D6. Exts.D1 to 3 are demands made earlier by the complainant calling upon the petitioner to pay Crl.R.P.No. 2824 of 2006 4 the amounts outstanding as per the transactions. The accused did of course raise the further crucial contention that the prosecution is barred by limitation in as much as the complaint was not filed within 45 days of the date of service of Ext.D4 notice.
5. The courts below, in these circumstances, concurrently came to the conclusion that the complainant has succeeded in establishing all ingredients of the offence punishable under Section 138 of the N.I. Act. Accordingly they proceeded to pass the impugned concurrent judgments.
6. Called upon to explain the nature of challenge which the petitioner wants to mount against the impugned concurrent judgments, the learned counsel for the petitioner raises three specific contentions. First of all it is contended that the prosecution is barred by limitation in as much as the complaint has not been filed within 45 days of the date on which Ext.D4 notice of demand was served on the petitioner. Secondly it is contended that the courts below erred grossly in turning down the plea of the accused that the liability under Ext.P2 cheque has been discharged under Exts.D5 and D6 receipts. Thirdly and finally it is contended that the sentence imposed is excessive.
Crl.R.P.No. 2824 of 2006 5
7. The most important contention raised is the one regarding limitation. Reliance was placed on the decisions of the Supreme Court in Sadanandan Bhadran v. Madhavan Sunil Kumar (AIR 1998 SC 3043), SIL Import, U.S.A. v. Exim Aides Silk Exporters (1999 (2) KLT 275 (SC), Dalmia Cement (Bharat) Ltd. v. Galaxy Traders & Agencies Ltd. & ors. (2001) 6 SCC 463), Krishna Exports & ors v. Raju Das (2004) 13 SCC 498) and Prem Chand Vijay Kumar v. Yashpal Singh and anr. (2005 SCC (Cri) 1153).
8. There was a controversy in Kerala as to whether successive presentations of the cheque and successive acts of dishonour by bank on identical grounds would give the drawer of the cheque plurality of causes of action to launch prosecutions. That controversy appears to have been settled in Kerala as per the decision in S.K.D. Lakshmanan Firewords Industries and another v. K.V. Sivaramakrishnan and another (1995 Crl.L.J. 1384). A Full Bench of this court held that successive presentations will give successive causes of action for the drawer of the cheque, but plurality of prosecutions will be unsustainable in the light of Crl.R.P.No. 2824 of 2006 6 Section 300 Cr.P.C. The Supreme Court in Sadanandan Bhadran's case (supra), after adverting to the said decision, did not accept the dictum therein and held that when notice of demand is issued by the payee to the drawer of the cheque after dishonour of the cheque and the drawer receives such notice, the clock of limitation will start ticking and the complaint must be filed within 45 days of such receipt of the notice of demand. Thereafter no fresh cause of action for prosecution under Section 138 of the N.I. Act can arise from the very same cheque, it was held. The position was so laid down by the Supreme Court in Sadanandan Bhadran's case. Later in SIL Import, Dalamia Cement, Krishna Exports and Prem Chand Vijaya Kumar (supra) the same position was accepted by the Supreme Court. Academic discussion is afoot as to which view advances the purpose of Section 138 of the N.I. Act better.
9. Be that as it may, the position appears to be well settled now that successive presentations cannot give rise to successive causes of action, if a notice of demand as contemplated under Section 138 N.I. Act has actually been issued and received. Under Article 141 of the Constitution, a different view cannot be taken by any court. Howsoever weighty the Crl.R.P.No. 2824 of 2006 7 academic disagreement be, the decision must be followed. But the fact situation in the instant case calls for a more careful scrutiny in so far as application of the dictum of the Supreme Court in the above cases is concerned.
10. Can the cause of action be said to have commenced by service of Ext.D4 notice? That is the crucial question to be considered in this case. Ext.D4 notice, according to me, cannot be held to be a valid notice under Section 138 priviso (b) of the N.I. Act in as much as no demand for the amount payable under Ext.P2 cheque is specifically made in Ext.D4. A demand is made. There is reference in the notice of demand to the cheque number, name of the bank, the amount and the date of the cheque. But the name of the bank is shown incorrectly, evidently because of an error committed by the counsel, who issued the notice. When such a grave error is committed by the counsel, is the accused bound to stand by that notice and pursue action under Section 138 or can he realising the fundamental defect in the notice present the cheque again and institute a proper prosecution? This is the crucial question to be considered.
11. According to me, Ext.D4 notice, which evoked Ext.P8 reply, Crl.R.P.No. 2824 of 2006 8 clearly shows that the petitioner wanted to take up the vital defect in the notice as the ground to claim exculpation from liability. He has stated specifically that such a cheque as described in the notice (drawn on Indian Overseas Bank, Pathanamthitta branch bearing the number 089583 for Rs.50,000/-) has not been issued by him to the complainant. I am not on the question whether the complainant, could still have successfully contended before the courts that Ext.D4 notice, notwithstanding the error in the description of the name of the bank, must be reckoned as a valid notice. In an appropriate case where such an error/inadequacy in the notice, though fundamental and crucial, does not result in any prejudice to the accused, it may be open to a court to hold that notwithstanding the error in the notice the same can be reckoned as a valid notice of demand. But it will be improper, according to me, to compel the complainant to pursue the prosecution further when such a vital defect was committed by his counsel in respect of the cheque in the notice of demand. He had time available with him, i.e. six months from the date of the cheque - within which he could present the cheque again and make a proper notice of demand if the dishonour was repeated by the bank. In such a situation, I Crl.R.P.No. 2824 of 2006 9 am of opinion that it will be unfair, unjust and unreasonable to insist that the complainant must pursue the prosecution on the basis of the fundamentally and vitally defective notice issued by his counsel. Different would be the situation if the indictee did not raise any objection and accepted the notice as a sufficient and satisfactory one, Ext.P8 reply specifically shows that the accused was capitalizing on the error committed by the counsel in Ext.D4 notice. That being so, the complainant cannot be found fault with for not taking a risk in respect of the prosecution based on Ext.D4 notice of demand, against which vital contentions were raised in Ext.P8 reply notice.
12. A similar situation not on all fours, but identical, appears to have been considered by the Supreme Court in Dalmia Cements (supra). That was a case where, according to the complainant, a proper notice of demand was issued consequent to the dishonour of the cheque. The indictee contended that an envelop was received, but it did not contain any notice of demand as insisted by Section 138 of the N.I. Act. The complainant was left with a difficult choice. He could either have asserted that it was not blank paper which was sent by him, but a proper notice. He Crl.R.P.No. 2824 of 2006 10 may have succeeded. He may not have succeeded. The Supreme Court fairly did not hold that the complainant was obliged to continue with the prosecution on the basis of that notice of demand against which vital and crucial objection was raised by the indictee. Therefore the Supreme Court held that notwithstanding the contention of the complainant that a proper notice of demand was issued, that notice of demand, which was contended to be not a notice of demand for the reason that it was only a blank paper, could be ignored by the complainant and he could present the cheque again and launch another prosecution. The situation appears to be almost similar in the instant case also. The complainant could still have stood his ground and contended that the defect is not fundamental in as much as there is no other transaction between the contestants. He may have succeeded. He may not have succeeded. But the complainant did not want to take that risk. He therefore opted to present the cheque again and issue a fresh notice of demand.
13. According to me, it would be unfair, imprudent and unreasonable to compel the complainant to reckon Ext.D4 as a proper notice of demand when the indictee, the petitioner herein, raised a very specific contention Crl.R.P.No. 2824 of 2006 11 that the notice was not proper and that no such cheque had been issued by him to the complainant. That would be compelling the complainant to take a most unreasonable risk, especially when the accused is entitled to the benefit of doubt, which may be claimed by him on the ground that he was confused as to the identity of the cheque, regarding which the notice was issued.
14. I am, in these circumstances, of the opinion that the fundamentally defective and erroneous notice, Ext.D4, against which vital objection was raised by the accused in Ext.P8 reply, will not set the clock of limitation ticking. The notice being a defective and unsustainable notice as contended by the accused and as accepted by the complainant, the cause of action cannot be said to commence with such a notice. Any contra interpretation, I am afraid, will run counter to the scheme of Section 138 of the N.I. Act and would defeat the purpose which law seeks to achieve. It is now trite, and hence it is not necessary to advert to specific precedents, that even a penal provision must receive a purposive construction and not a literal and over technical interpretation. The purpose which the statute has to achieve cannot be lost sight of by the adjudicator and the interpreter. So Crl.R.P.No. 2824 of 2006 12 reckoned, I am certainly of the view that Ext.D4 does not in any way set the clock of limitation ticking and the prosecution launched on the basis of the subsequent notice of demand, Ext.P5, is perfectly valid, legal and sustainable. The challenge raised on this ground therefore fails.
15. The counsel reiterates the contention that the cheque was not issued for the due discharge of any legally enforcible debt/liability. According to him, a blank signed cheque was handed over as security. According to him, the liability stood discharged under Exts.D5 and D6.
16. The contention that a blank signed cheque was handed over by an account holder to another must inherently arouse dissatisfaction and reservation in the mind of the court. The laudable commercial morality which the Legislature seeks to usher in by introduction of Section 138 of the N.I. Act will be frustrated and stultified if such a defence were meekly swallowed by any court. The account holders are expected to deal with their cheques carefully, cautiously and reasonably. They are not expected to deal with their cheques playfully, casually and without diligence. Such a defence - that the cheque was handed over as a blank signed cheque and as security - may still not be impossible or impermissible in a prosecution Crl.R.P.No. 2824 of 2006 13 under Section 138 of the Act. But certainly the burden must rest squarely and heavily on the indictee who wants to attribute to himself such an improbable and artificial conduct to claim exculpation from liability. Has the accused discharged that burden? This is the question to be considered now.
17. It is crucial to note that in Ext.P8 reply the accused does not raise such a contention at all. If the present version of the petitioner were accepted, he knew for certain when he received Ext.D4 that the reference in Ext.D4 was to Ext.P2 cheque. Significantly and surprisingly this theory that the cheque was handed over as security - as a blank signed cheque - is not mentioned in Ext.P8 reply at all. Later, when Ext.P5 notice of demand was received again, it surprisingly did not evoke any response though it was admittedly duly received and acknowledged by the accused. The silence and the inaction of the petitioner on receipt of Ext.P5 and his omission to raise the contentions now raised in Ext.P8 reply are, according to me, of vital and crucial significance when a court tries to evaluate the acceptability of the contention adopting the yardstick of a prudent man as insisted by Section 3 of the Evidence Act.
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18. The improbabilities do not end there also. Significantly except to produce Exts.D1 to D6 no oral evidence is adduced by the accused. He has not called for the records of the complainant to show that there was only one transaction and Ext.P2 as well as Exts. D5 and D6 relate to that one and only transaction. He did not produce his own accounts if any. The complainant admitted Exts.D1 and D6, but contended that they do not relate to Ext.P2 cheque. It is of significance to note that both Exts. D5 and D6 are anterior in point of time and they are not subsequent to Ext.P2 cheque.
19. The plea of discharge is certainly an onerous plea even under the civil law. The burden must normally be held to be on that litigant who pleads discharge. In the wake of the various incongruent circumstances which I have referred to already, I am of the opinion that the courts below did not commit any error warranting or justifying interference by invocation of the revisional jurisdiction in rejecting the said plea of discharge urged with the help of Exts.D5 and D6.
20. Failure of consideration is the plea raised. The presumption under Section 139 of the N.I. Act stares at the petitioner. Existence of a valid consideration - that the cheque was issued for the due discharge of a Crl.R.P.No. 2824 of 2006 15 legally enforcible debt/liability - is to be presumed. If the plea is that the liability has subsequently been discharged, the burden is one which the accused should take on his shoulders under Section 139 of the Act in his attempt to "prove the contrary". That burden remains undischarged. The plea of discharge cannot, in these circumstances, deliver any advantage to the petitioner.
20. Finally it is contended that the sentence imposed is excessive. The petitioner now faces a sentence of imprisonment till rising of court and to pay the actual cheque amount of Rs.50,000/- as compensation. There is also a default sentence of S.I. for three months.
21. Leniency and indulgence to a fault have already been shown to the petitioner. The complainant has been compelled fight two rounds of legal battle by now and to wait from 2002 for the redressal of his grievances. Only the actual cheque amount of Rs.50,000/- has been directed to be paid. No further leniency is, in these circumstances, called for. The challenge on this aspect must also, in these circumstances, fail.
22. Counsel for the petitioner prays that the petitioner may be granted some further time to make the payment of compensation and avoid Crl.R.P.No. 2824 of 2006 16 the default sentence. I am not satisfied that any further leniency needs or deserves to be shown. However it can be directed that the petitioner shall appear before the trial court on 30.10.2006 to serve the impugned sentence. Till then the sentence shall not be executed. If the petitioner does not so appear, the learned Magistrate shall thereafter take necessary steps to execute the impugned sentence.
7. This revision petition is hence dismissed with the above observations/directions.
(R. BASANT) Judge tm