Telangana High Court
S.Sai Prasad, Hyderabad., vs P.Sridevi, Anantapur Anr, Rep Pp., on 26 October, 2022
Author: G. Radha Rani
Bench: G. Radha Rani
1
Dr.GRR,J
Crl.RC No.2533 of 2017
THE HONOURABLE Dr. JUSTICE G. RADHA RANI
CRIMINAL REVISION CASE No.2533 of 2017
ORDER:
This criminal revision case is filed by the petitioner-appellant-accused aggrieved by the judgment in Crl.A.No.786 of 2016 dated 01.09.2017 on the file of Additional Metropolitan Sessions Judge for Trial of Communal Offence Cases cum VII Additional Metropolitan Sessions Judge, Hyderabad, confirming the judgment dated 11.08.2016 passed in CC No.233 of 2013 by the XVI Special Magistrate, Hyderabad.
2. The parties are hereinafter referred as per their array before the trial court.
3. The facts of the case in brief are that the accused was a family friend of the complainant. The complainant extended a hand loan of Rs.10,00,000/- to the accused on 26.01.2011 at the residence of the complainant. The complainant gave the said amount to the accused through cheque bearing No.904339 dated 24.01.2011 drawn on ING Vysya Bank Limited for Rs.10,00,000/-. The accused executed a promissory note in favour of the complainant promising to repay the same within a short period. After several demands, the accused issued a cheque bearing No.913106 dated 28.01.2013 for Rs.10,00,000/- drawn on ICICI Bank, Secunderabad branch. When the 2 Dr.GRR,J Crl.RC No.2533 of 2017 complainant presented the said cheque, the cheque was returned dishonoured for the reason "account closed" vide cheque return memo dated 01.08.2013. On 03.08.2013, the complainant got issued a legal notice to the accused calling upon him to pay the cheque amount. The accused had received the said notice, but failed to pay the cheque amount nor gave any reply notice to the complainant. Hence, the complainant filed the complaint.
4. The case was tried by the XVI Special Magistrate, Hyderabad vide CC No.233 of 2013 (old CC No.521 of 2013 on the file of VI Additional Chief Metropolitan Magistrate). On behalf of the complainant, PWs.1 to 3 were examined and Exs.P1 to P11 were marked. No evidence was adduced by the accused.
5. The trial court, after considering the oral and documentary evidence on record, found the accused guilty for the offence under Sections 138 of the Negotiable Instruments Act (in short 'NI Act') and convicted and sentenced him to pay fine of Rs.15,00,000/- i.e. one and half of the cheque amount and directed the same to be paid as compensation to the complainant within two months from the date of the judgment on 11.08.2016.
6. Aggrieved by the same, the accused preferred an appeal. The appeal was heard by the Additional Metropolitan Sessions Judge for Trial of Communal Offence Cases cum VII Additional Metropolitan Sessions Judge, 3 Dr.GRR,J Crl.RC No.2533 of 2017 Hyderabad vide Crl.A.No.786 of 2016. The appellate court on re- appreciation of the evidence confirmed the conviction and sentence passed against the accused and dismissed the appeal.
7. Aggrieved further, the appellant-accused preferred this revision contending that the courts below failed to appreciate the stand taken by the petitioner-accused that the subject cheque and the promissory note were kept as security with one G.V. Raghava Reddy. The courts below ought to have observed that G.V. Raghava Reddy was the actual lender of the amount who was behind the transaction in dispute. Mere admission of signature on the disputed cheque would not tantamount to execution of the cheque. The appellate court erred in holding that the petitioner-accused failed to probabilise his defence either by examining the said G.V. Raghava Reddy or by producing any material or by eliciting through the cross-examination of PW.1 or through the documents filed by the complainant. The appellate court ought to have observed that the petitioner-accused rebutted the presumption under Section 118 (a) and 139 of NI Act. The appellate court failed to appreciate that it was not the amount which was in dispute but it was the person who actually lent the amount. The courts below erroneously held that the accused did not prove that the notice was not really served on him and that he was not responsible for such non-service. The stand of the accused was that he was not served with statutory notice but the case of the 4 Dr.GRR,J Crl.RC No.2533 of 2017 complainant was that she sent the statutory notice to the accused through registered post with acknowledgment due. The postal acknowledgment card relied on by the complainant would disclose that the notice was served on a lady, by name, Balamma. The complainant, neither in her complaint nor through her evidence, explained as to who Balamma was and how it could be deemed that notice was served on the accused. It was categorically admitted by the respondent-complainant that the address on the postal acknowledgment card was erroneous, it was written as 'B' instead of '3'. It was not the case of the complainant that the notice was actually served on the petitioner-accused. Section 27 of the General Clauses Act would have no application to the case. The benefit thereof should be given to the accused not to the complainant. The courts below erroneously held that notice was sent on correct address, admitting at the same time that there was a defect in regard to the house number of the petitioner-accused. The observations made by the courts below were irreconcilable, striking against each other. The courts below ought to have held that the service of notice was not in confirmity with the mandatory requirements contemplated under Section 138
(b) of the NI Act. The burden would lie on the complainant to establish as to who Balamma was and under what circumstances the notice was actually served on her.
5
Dr.GRR,J Crl.RC No.2533 of 2017
8. Heard learned counsel for the petitioner and the learned counsel for the 1st respondent-complainant.
9. Sections 138 and 139 of the Negotiable Instruments Act reads as under:
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.-- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to 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;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said 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 the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the 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.
Explanation.--For the purposes of this section, "debt or other liability"
means a legally enforceable debt or other liability.
139. Presumption in favour of holder.--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability."6
Dr.GRR,J Crl.RC No.2533 of 2017
10. The trial court, on considering the evidence of PW.1 that she lent an amount of Rs.10,00,000/- to the accused through cheque bearing No.904339 and the accused deposited the same into his account and encashed it and executed Ex.P.6 promissory note wherein it was clearly mentioned that he received the amount of Rs.10,00,000/- though cheque bearing No.904339 dated 24.01.2011 of ING Vysya Bank and he did not deny the execution of promissory note in favour of the complainant and the bank statements of the complainant marked under Exs.P8 and P11 would show that the cheque bearing No.904339 for Rs.10,00,000/- was issued to the accused and that the accused received the said cheque and encashed the same by depositing the same into his account, the pay-in-slip marked as Ex.P9 would show that the accused deposited the said cheque into his account, held that the complainant proved that she lent Rs.10,00,000/- to the accused and the same was received by the accused.
11. The defence taken by the accused that the cheque in question was not handed over to the complainant but to a third party, by name, G.V. Raghava Reddy was also considered by the trial court. The trial court observed that the accused failed to explain as to why he issued blank cheque to G.V. Raghava Reddy and why he had not issued a notice calling the said G.V. Raghava Reddy to return the cheqeue and failed to take any steps in that direction, observed that the accused took a false defence. 7
Dr.GRR,J Crl.RC No.2533 of 2017
12. The accused had not denied his signature on the cheque. When the signature was admitted reverse onus would lie upon the accused under Section 139 of the NI Act to rebut the presumption. But, the accused failed to raise probable defence which would create a doubt about the existence of a legally enforceable debt or liability. The accused failed to adduce any evidence that he issued blank cheque and pro note to G.V. Raghava Reddy towards security either by examining G.V. Raghava Reddy or by producing any material or by eliciting through the cross-examination of PW.1 or through the documents filed by the complainant. Hence, the lower appellate court also came to the conclusion that there was no hesitation to hold that the accused failed to rebut the presumption under Section 118-a and 139 of the NI Act. This Court does not find any material illegality or impropriety in the observations of the courts below that the accused issued the cheque towards discharge of legally enforceable debt or liability.
13. The second contention raised by the accused was with regard to the service of notice. He contended that notice was not sent on his correct address, there was a defect with regard to house number, the postal acknowledgment card also would disclose that the notice was served on one Balamma, but not on the accused. The burden would lie upon the complainant to explain as to who Balamma was and under what circumstances, the notice was served on her and there was non-compliance of 8 Dr.GRR,J Crl.RC No.2533 of 2017 Section 138 (b) of the NI Act. The trial court in this regard observed that Ex.P.6 is the promissory note executed by the accused. In Ex.P.6, the accused mentioned his house number as 2-2-647/3/3/1, Sai Brundavan Residency. In the legal notice - Ex.P3, the house number was typed as 2-2-647/3/B/1 instead of 2-2-647/3/3/1 but the apartment name was correctly mentioned as Sai Brundavan Residency. In the postal receipt, the house number was correctly mentioned as 3-3-1 of Sai Brundavan Residency which would show that in the registered postal cover through which legal notice was sent, the house number might have correctly written as 2-2- 647/3/3/1, because the postal receipt would be prepared or typed on seeing the address on the registered postal cover which would make it clear that notice was sent to correct address i.e. House No.2-2-647/3/3/1, Sai Brundavan Residency. There might not be any problem for the postman to deliver the cover at the address of the accused by seeing his name and apartment on the cover and opined that the legal notice was sent to the correct address.
14. In this aspect, the lower appellate court also observed that:
"A perusal of the postal acknowledgment, Ex.P.5, shows that the house number was mentioned as H.No.2-2-647/3/B/1, but on a naked eye it shows that no.3 is written as 'B'. Ex.P4 postal receipt also shows the house number as 3/3/1, but in the legal notice, Ex.P.3 the house number was mentioned as 2-2-647/3/B/1. On this aspect, the accused failed to produce any material that it was a false endorsement, in fact he did not examine the said Balamma."9
Dr.GRR,J Crl.RC No.2533 of 2017
15. The learned counsel for the petitioner - accused relied upon the judgment of the High Court of Delhi in R.L. Varma & Sons (HUF) v. P.C. Sharma1, wherein it was held that:
"22. Legal presumption of service of notice can only arise in case the notice is correctly addressed. If the notice is incorrectly addressed no legal presumption can arise. In the present case, the complainant had annexed the letterhead of the petitioner containing the address mentioned in the statutory notice but specifically mentioning there in the correspondence address as that of New Friends Colony.
24. Section 138 of the Negotiable Instruments Act mandates the issuance of the statutory notice as a pre-condition to filing of a complaint. The cause of action to file a complaint under section 138 of the Negotiable Instruments Act arises only on issuance and service of statutory notice and failure of the accused to comply with the statutory notice. In the absence of service of statutory notice the cause of action would not accrue. Service of statutory notice would also include legal presumption of service if circumstances so warrant."
16. He also relied upon the judgment of the High Court of Jammu and Kashmir in Engineering Control v. Banday Infratech Pvt. Ltd.2, wherein it was held that:
"10. 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 1 2019 LawSuit (Del) 1894 2 2022 LawSuit (J&K) 519 10 Dr.GRR,J Crl.RC No.2533 of 2017 notice. It is only upon the 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 of 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 Section138 of the NI Act.
12. The aforesaid observations were relied upon by the Supreme Court in the case of C. C. Alavi Haji (supra). However, it was observed by the Supreme Court that when the notice is sent by registered post by correctly addressing to 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.
13. In Harman Electronics Private Limited and another vs. National Panaso India Private Ltd, 2009 1 SCC 720, the Supreme Court has, while deliberating the 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."
[14] 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."
11
Dr.GRR,J Crl.RC No.2533 of 2017
17. The evidence on record would disclose that except for the No.3 at one place, the house number is typed as 'B' and that too in the legal notice marked under Ex.P3. The trial court rightly observed that the postal cover and the postal receipt marked under Ex.P4 would show the correct address and the registered postal cover which contained the legal notice bore the correct address basing on which the postal receipt was prepared and typed. Hence, it can be safely presumed that mentioning of letter 'B' in place of number '3' is a typographical mistake written due to oversight and the accused cannot take advantage of it in contending that the notice was not served upon him.
18. The trial court also observed that as the court summons were returned as not claimed, a Non Bailable Warrant was issued against the accused on the said date and within four days i.e. on 06.01.2014 the accused appeared before the court and filed the petition for recalling the NBW and hence, observed that it would make clear that the accused had knowledge about the court summons sent to his address and he wantonly did not receive it and that the legal notice and summons were correctly addressed and accused wantonly avoided to receive them.
12
Dr.GRR,J Crl.RC No.2533 of 2017
19. The trial court also observed that the accused was an advocate residing in Sai Brundavan Residency and that the rest of the address was correctly typed and there might not be any problem for the postman to deliver the cover to his address by seeing his name and apartment name on the cover, rightly invoked the provisions of Section 27 of the General Clauses Act.
20. As per Section 3 of the Indian Post Office Act, 1898 the meaning of "in course of transmission by post" and "delivery" is defined as:
3. Meanings of "in course of transmission by post" and "delivery".--
For the purposes of this Act,--
(a) a postal article shall be deemed to be in course of transmission by the post from the time of its being delivered to a post office to the time of its being delivered to the addressee or of its being returned to the sender or otherwise disposed of under Chapter VII;
(b) the delivery of a postal article of any description to a postman or other person authorized to receive postal articles of that description for the post shall be deemed to be a delivery to a post office; and
(c) the delivery of a postal article at the house or office of the addressee, or to the addressee or his servant or agent or other person considered to be authorized to receive the article according to the usual manner of delivering postal articles to the addressee, shall be deemed to be delivery to the addressee."
21. In the instant case, as the postal cover containing the legal notice appears to have been sent to the correct address of the accused, the burden would lie upon the accused to rebut the presumption challenging the factum of non-service of notice. As he failed to examine the said Balamma or the postman to show that the notice was not served upon him, both the courts 13 Dr.GRR,J Crl.RC No.2533 of 2017 below had rightly invoked the provisions of Section 27 of General Clauses Act, presuming that the notice was sent to the correct address and it was a deemed service on the accused and the complainant complied the provisions of Section 138 (b) of NI Act. This Court does not find any illegality or impropriety in the observations of the courts below in coming to such a conclusion and holding the accused guilty for the offence under Section 138 of NI Act. The sentence imposed is also appropriate, as such, this court does not find any reason to interfere with the same.
22. In the result, the Criminal Revision Case is dismissed confirming the judgment dated 01.09.2017 passed in Crl.A. No.786 of 2016 by the Additional Metropolitan Sessions Judge for Trial of Communal Offence Cases cum VII Additional Metropolitan Sessions Judge, Hyderabad, wherein the appellate court confirmed the judgment dated 11.08.2016 passed in CC No.233 of 2013 by the XVI Special Magistrate, Hyderabad.
Miscellaneous Petitions pending, if any, shall stand closed.
_____________________ Dr. G. RADHA RANI, J October 26, 2022 KTL