Andhra HC (Pre-Telangana)
A. Sudershan vs Mannen (Shabir) And Anr. on 19 February, 1997
Equivalent citations: 1997(1)ALD(CRI)795, 1997(1)ALT(CRI)785, [1996]86COMPCAS435(AP)
Author: B.S. Raikote
Bench: B.S. Raikote
JUDGMENT B.S. Raikote, J.
1. This appeal is preferred against the judgment and order of acquittal recorded by the First Additional Metropolitan Sessions Judge, Hyderabad, dated November 30, 1994, in Criminal Appeal No. 52, of 1994. By this order the learned Sessions Judge reversed the judgment and order of conviction recorded by the XVIIth Metropolitan Magistrate, Hyderabad, by his judgment and order dated January 21, 1994, in C.C. No. 24 of 1991. Learned counsel for the appellant/complainant contended that the impugned judgment and order of the appellate court is illegal and without jurisdiction and it is contrary to law and the facts of the case. On the other hand, learned counsel for the respondent supported the impugned judgment and order.
2. In order to appreciate the rival contentions it is necessary to note a few facts of the case. The sole respondent-accused issued a cheque dated September 8, 1990, for an amount of Rs. 50,000 in favour of the complainant towards the purchase of iron scrap from the complainant. The said cheque was presented on September 10, 1990, but it was returned with the endorsement of the bank on the same date as "not arranged for" which is marked as exhibit P-2. The said cheque was again re-presented on October 8, 1990, but it was again returned on the same date with endorsement of the bank "effects not cleared, please present again" which is marked as exhibit P-3. Thereafter, the complainant gave a notice dated October 11, 1990, vide exhibit P-4 to the respondent by registered post. But the said registered post was returned. The postman noted on the envelope that the party was continuously absent for seven days and returned the cover, which is marked as exhibit P-5. Thereafter, the complainant waited for fifteen days up to November 7, 1990. But the respondent did not make the payment of the amount under cheque. After one month thereafter, i.e., on December 4, 1990, the complainant filed the case before the court. The complainant examined himself as P.W. 1. His son was also examined as P.W. 2. P.W. 3 is the branch manager of the State Bank of Hyderabad, Malakpet Branch. On the basis of the entire appreciation of the evidence on record, the trial court convicted the accused of an offence punishable under section 138 of the Negotiable Instruments Act and accordingly convicted him to undergo rigorous imprisonment for a period of six months and to pay a fine of Rs. 1,000, in default of payment of fine to undergo simple imprisonment for a period of two months. Being aggrieved by the said judgment and order the accused preferred an appeal before the First Additional Metropolitan Sessions judge, Hyderabad, who by his impugned order acquitted the accused of the offences. It is in these circumstances the complainant has come up in appeal, as I have already stated above.
3. Learned counsel for the appellant contended that the appellate court was in error in acquitting the accused solely on the ground that there was no sufficient notice to the accused in terms of section 138, clauses (b) and (c) of the Negotiable Instruments Act. He further submitted that so far as the complainant is concerned he has issued a notice as per section 138(b) and in case the notice is returned unserved the said notice shall be taken as sufficient notice for the purpose of clause (b) and within fifteen days thereafter, the accused shall make payment and in case of non-payment, the offence is automatically constituted under section 138 of the Negotiable Instruments Act. In support of his contention he relied upon the judgment of the High Court of Madras in S. Prasanna v. Vijayalakshmi [1993] 76 Comp Cas 522; [1992] Crl. LJ 1233; [1993] 1 Crimes 679. On the basis of this judgment he submitted that such notice returned with a postal endorsement as "not found" shall be taken as a constructive notice to the accused. On the other hand counsel appearing for the respondent contended that in the instant case no notice is served under clause (b) of section 138 of the Act and as such no offence would be constituted under that clause. Therefore, payment of the amount within fifteen days as contemplated under section 138(c) would not arise. In support of his argument he cited another judgment of the learned single judge of the High Court of Madras in R. M. Sundaram v. C. M. Ramraj [1993] 3 Crimes 175 (Mad). In view of this kind of legal controversy raised by learned counsel on both sides the following point arises for my consideration :
"Whether the notice returned with postal endorsement 'not found for seven continuous days' amounts to service of notice for the purpose of section 138 (clauses (b) and (c)) of the Negotiable Instruments Act."
4. In order to prove the service of notice on the accused the complainant examined himself as P.W. 1. He stated in his evidence that he issued a notice, vide exhibit B-4 by registered post and the same has been returned. The postal envelop is marked as exhibit B-5. On exhibit P-5, the postal endorsement is to the effect that "party continuously seven days absent". Except the evidence of P.W. 1 there is no other evidence regarding the service of notice on the accused. P.W. 1 did not state in his evidence that the accused was evading the service of notice. Having regard to these circumstances, I have to see whether there is service of notice on the accused in terms of section 138, clauses (b) and (c) of the Negotiable Instruments Act, which read as under :
"(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 fifteen 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."
5. From clause (b) of the said Act it is clear that the payee or the holder in due course shall make a demand for payment of the amount mentioned in the cheque that bounced "by giving a notice, in writing, to the drawer of the cheque". Under clause (c) if the drawer of the cheque fails to make the payment within fifteen days of the "receipt of the said notice" he would commit the offence. Thus, from the combined reading of clauses (b) and (c) of section 138 of the Negotiable Instruments Act, it is clear that unless a notice in writing is received by the drawer of such a cheque the offence would not be constituted. Therefore, the receipt of notice is absolutely necessary as a precondition for constituting such an offence. The act of giving a notice contemplated by section 138 of the Negotiable Instruments Act means actually serving the notice in terms of section 27 of the General Clauses Act, 1897. In other words even if there is any ambiguity regarding what constitutes service of notice under section 138 of the Negotiable Instruments Act, section 27 of the General Clauses Act, 1897, has clarified the position of law. I am extracting section 27 of the General Clauses Act, 1897, for immediate reference as under :
"27. Meaning of service by post. - Where any Central Act or regulation made after the commencement of this Act authorises or requires any document to be served by post whether the expression 'serve' or either of the expressions 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying 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."
6. From the reading of the above section it is clear that where any document under a Central Act is required to be served by post, such a service shall be effected by delivering the same in the ordinary course of post. It further makes it clear that unless a different intention appears as per any Act or regulation, such a service shall be deemed to be effected by properly addressing prepaying and posting by registered post. In other words, if such a document is sent by registered post and if it does not return back it is deemed to have been served. But such a presumption is a rebuttable presumption and it is always open to the addressee to prove that in fact he did not receive such a registered post. It is only having regard to this kind of presumption found under section 27 of the General Clauses Act, 1897, and also similar presumption found under section 114 of the Indian Evidence Act, the courts in India have presumed the service of such a notice or document when such a registered post is not returned back. Such a presumption is raised even in case the registered post is returned with the postal share "refused" in view of the fact that such a refusal presumes knowledge of the addressee and presumably knowing the contents he has wantonly refused it. This Hon'ble Court in Mahboob Bi v. Alvala Lachmiah, , has further held that unless the endorsement on the envelope "refused" is proved in the manner in which it is capable of proof no presumption of service can be raised. The High Court of Madhya Bharat in a decision in Tekchand v. Gulab Chand, AIR 1957 Madhya Bharat 151, has opined in the same way. However, the High Court of Madhya Pradesh in Budha v. Bedariya, , has held that it is for the contestant to summon the postman and rebut the presumption. But, the instant case is not the one of refusal of such a registered notice. It is a case in which the notice returned because the addressee was not available for seven continuous days. Such situations are not uncommon due to such persons going outstation to attend their domestic work. Therefore, only because a person is not found in his house by the postman for seven continuous days there cannot be a presumption of the service of notice. It definitely causes a great hardship to the accused if the offences are made to constitute only on the basis of such a presumption. In case of a postal share of refusal there is a presumption that the addressee by indirectly knowing the contents of the registered letter or notice has purposely refused it, however, it is a rebuttable presumption and to draw a similar presumption against an innocent person who is not found in his house for seven continuous days would be unreasonable. In fact, the High Court of Madras in Ramaswamy v. Tahsildar, , while considering the service of notice under the Tamil Nadu Land Encroachment Act, went to an extent of holding that mere endorsement that service of notice was refused by the parties cannot be said to be a sufficient service under section 7 of the Tamil Nadu Land Encroachment Act. In a decision in B. M. Sundaram v. C. M. Ramraj [1993] 3 Crimes 175 (Mad) the same High Court, while considering the effect of clauses (b) and (c) of section 138 of the Negotiable Instruments Act, held as under :
"7. Sub-section (b) of section 138 of the Act requires the payee or the holder in due course of the cheque to issue a notice to the drawer of the cheque within fifteen days of the receipt of the information by him from the bank regarding the return of the cheque as unpaid.
8. Sub-section (c) thereof further provides that the drawer has to comply with the demand within fifteen days of the receipt of the said notice. Only if the demand is not complied with within the time so specified, the cause of action accrues for lodging of a complaint within a period of one month, as contemplated by sub-section (b) of section 142 of the Act. For determining the period of one month, the actual receipt of the notice, as contemplated under sub-section (c) of section 138 is necessary and without such information, limitation, provided for the launching of prosecution under sub-section (b) of section 142 cannot at all be determined.
9. Sub-section (c) of section 138 does not at all contemplate any constructive notice. If constructive notice has been contemplated under the said sub-section by the Legislature, sufficient phraseology would have been utilised for such a purpose. The language used therein, namely 'receipt of the said notice', unambiguously points out to actual receipt of notice. 10. In the case on hand, notice issued had not been actually served, but it had been returned with a postal endorsement as 'not found'. Such being the case, it cannot at all be stated that the provisions of sub-section (c) of the said section had been duly complied with and the non-compliance of the said provision is sufficient enough for the prosecution to be thrown out, lock, stock and barrel, as contended by learned counsel for the petitioner-accused.
Assuming for arguments that the provisions of sub-section c) of the said section contemplates constructive notice, even then it cannot be stated that in the case on hand, there is a plausibility to come to the conclusion of the existence of such a constructive notice. It is not as if the notice has been returned as 'refused to receive' and in such an eventuality, one can attribute knowledge on the part of the person responsible for the refusal of such a notice. In the case of a postal acknowledgment as 'not found', which is exactly the situation in the case on hand, it cannot be stated that there could have been any sort of wilful evasion of such a notice, inasmuch as issuance of such a notice could not be put to the knowledge of the person to whom it was intended.
12. Looking at the case from any angle, it cannot be stated that the respondent/complainant, C. M. Ramraj had complied with the provisions of sub-section (c) of section 138 of the Act and consequently, he has to face the music of dismal failure of his complaint being thrown out."
8. The same also is the law declared by the Hon'ble High Court of Madras in the later decision in B. Adhikari v. Ponraj [1996] Cri. LJ 180; [1999] 96 Comp Cas 431 in which it is held that due to non-service of notice with a postal endorsement that no such address is available the offence is not constituted and as such a person cannot be convicted for the offences under section 138, clauses (b) and (c) of the Negotiable Instruments Act, by observing that (page 434) :
"6. Be that as it may, it is seen that no notice was served upon the revision petitioner as contemplated under sub-clauses (b) and (c) of section 138 of the Negotiable Instruments Act, which would mean that no demand has been made within fifteen days from the date of dishonour of the cheque in question. This would postulate the fact that the mandate inbuilt in section 138 to comply with a certain act so as to carve out the cause of action in filing the complaint has not been identified, whatever may be the reasons or explanation pertaining to the circumstances prevailing then given by the learned appellate judge. For the mere reasoning of failure in compliance with the mandate in-built in the above section of law, I am at every difficulty to countenance the finding recorded by the learned appellate judge and for the said reason, I am of the firm view that the conviction and sentence recorded against the revision petitioner cannot be Sustained."
9. However, learned counsel for the complainant relied upon another judgment of the learned single judge of the same court reported as S. Prasanna v. Vijayalakshmi [1993] 76 Comp Cas 522; [1993] 1 Crimes 679 (Mad). But, according to me, the facts of the said case are distinguishable. Having regard to the facts of that case the court held that (page 529) :
"..... the accused deliberately evaded receipt of registered notice. This would amount to his knowledge that such a notice was sent by the complainant and the deliberate refusal of the same. That would clearly amount to constructive service of notice. The very purpose of the Act cannot be thwarted by simply refusing the notice. I am clear that deliberate evasion of receipt of registered notice would amount to constructive service of notice and so I do not accept this contention."
10. Similar also was a case in Sosamma v. Rajendran [1993] 1 KLT 629 [1994] 80 Comp Cas 503 in which the notice was returned with postal shara "unclaimed". Taking this shara "unclaimed" as refusal the court found that there is a deemed service of notice. Thus, the facts of she last two cases are the cases in which the court proceeded to hold a constructive notice since there was an attempt on the part of the accused to refuse such a notice issued by the complainant. But the case on hand is not one of that type. It is a case in which notice is returned with a postal shara that the addressee was not found in his house for seven days and having regard to these circumstances, in my opinion it is not a case of constructive notice in any sense of the term. Therefore, I am constrained to hold in this case that due to the non-service of notice on the accused in terms of clauses (b) and (c) of section 138 of the Negotiable Instruments Act an offence under that section is not constituted and the complaint is liable to be dismissed and the court below has rightly dismissed the same.
11. There is always a possibility that an accused may manage to see that an endorsement is so made by the postal authorities that he was not in his house for the seven days and thereby frustrate the object of section 138 of the Negotiable Instruments Act, in the sense that, if subsequently a fresh notice is taken by the complainant to the accused and if such a notice would be in all probability beyond fifteen days from the date of receipt of information by the complainant from the bank, regarding the return of the cheque such a notice would not be within fifteen days as contemplated by clause (b) of section 138 of the Negotiable Instruments Act and on this count it would be an invalid notice. Therefore, by returning the registered notice once by stage managing with the postal authorities the object of the Act may be frustrated. Therefore, it is necessary to add an Explanation to clause (b) of section 138 of the Negotiable Instruments Act by providing that "a notice sent after the return of the earlier notice, within fifteen days of such return, the later notice/notices shall be deemed to be within fifteen days from the date of the receipt of information by the complainant from the bank regarding the return of the cheque as unpaid". Similar situations have already come to my notice by this time in a number of other cases as well. Therefore, it is for Parliament but not the court to amend the law suitably so as to plug this kind of malpractice.
12. For the reasons stated above, I do not find any merit in this appeal and accordingly the same is dismissed.