Allahabad High Court
Kishore Lal Chugh vs State Of U.P.And Another on 28 January, 2020
Equivalent citations: AIRONLINE 2020 ALL 2430, AIRONLINE 2020 ALL 2381
Author: Naheed Ara Moonis
Bench: Naheed Ara Moonis
HIGH COURT OF JUDICATURE AT ALLAHABAD ?In Chamber Case :- APPLICATION U/S 482 No. - 6783 of 2009 Applicant :- Kishore Lal Chugh Opposite Party :- State Of U.P.And Another Counsel for Applicant :- Amit Daga Counsel for Opposite Party :- Govt. Advocate,Nipun Singh,Vikrant Rana Hon'ble Naheed Ara Moonis,J.
Heard the learned counsel for the applicant Sri Amit Daga and the learned counsel Sri Vikrant Rana appearing on behalf of the respondent no.2 and the learned A.G.A. for the State.
The instant petition has been filed with the prayer to quash the entire proceedings of criminal complaint Case No. 173/9 of 2007, under Section 138 of Negotiable Instrument Act, police station Kotwali, district Muzaffar Nagar whereby the applicant has been summoned to face trial vide order dted 2.6.2007 passed by the Chief Judicial Magistrate, Muzaffar Nagar.
The prosecution case in a short conspectus is that the opposite party no. 2 has filed a complaint against the applicant on 26.4.2007, under Section 138 of Negotiable Instrument Act (hereinafter referred to as the Act). The respondent no. 2 came in contact with the applicant and entered into partnership on 11.2.2000 in Muzaffar Nagar and executed a joint venture agreement on 17.4.2000. The partnership business was in the name and style of "Priyanka Aryan Constructions". In 2002 due to ill intention the applicant started cheating to defraud the opposite party no. 2 and hence the complainant filed a case No. 6 of 2003 before the court of Civil Judge (Senior Division), Thane, Mumbai. After filing of the suit the applicant persuaded the complainant to enter into outside the court settlement whereby the applicant agreed to pay Rs. 45,00,000/- in terms of compromise. The applicant issued two cheques one of Rs. 10,000,00/- dated 29.1.2007 bearing cheque no. 299853 and another cheque of Rs. 35,000,00/- dated 6.2.2007 bearing cheque no. 29960 of Abhuday Cooperative Bank Ltd. Branch Vashi, Navi Mumbai and was assuring that it will be encashed. When the opposite party no. 2 deposited the aforesaid cheque of Rs 10,000,00/- dated 29.1.2007 in his local account at Canara Bank, Roorki Road, Muzaffar Nagar on 3.1.2007, the said cheque was returned on 9.2.2007 by the Bank with the endorsement of "insufficient of fund", it was returned without any payment along with bank memo of Canara Bank dated 14.2.2007, which was received by the opposite party no.2 on 26.2.2007.
On coming to know about the dishonour of cheque the complainant sent a registered notice with A.D. through his counsel on 9.3.2007, which was received by the applicant the receipt whereof was received by the opposite party no. 2. Despite service of notice to the applicant when neither the amount of money mentioned in the cheque was returned nor any reply given on receipt of the notice, hence the cause of action arose to file a complaint against the applicant under Section 138 of Negotiable Instrument Act. While filing the complaint the photo state of the cheque dated 29.1.2007 in respect of Rs. 10,00,000/-, photo copy of the return memo of the Bank, Vashi Branch, registered notice to the applicant dated 9.3.2007, photo state copy of the registered receipt dated 9.3.2007 and other papers were filed. On the basis of which a case was registered against the applicant under Section 138 of Negotiable Instrument Act as case No. 173/9 of 2007. The statement of the complainant/opposite party no.2 under Section 200 Cr.P.C. was recorded on the same day and the witness, namely, Rakesh Kumar Arora under Section 202 Cr.P.C. on 5.5.2009 was recorded. After going through the material on record both oral and documentary the learned Magistrate proceeded to pass the order on 2.6.2007 that prima facie offence is made out against the applicant under Section 138 of Negotiable Instrument Act and summoned the applicant to face the trial.
Hence this petition.
The learned counsel for the applicant has submitted that the initiation of the present proceeding on the basis of the complaint filed by the opposite party no.2 is an abuse of the process of law as there is no strict compliance of provision of Section 138 of Negotiable Instrument Act. It is alleged that the complainant had sent legal notice through his counsel to the accused/applicant on 9.3.2007 but no date of refusal of the said notice is mentioned either in the complaint or in the statement of the complainant recorded under Section 200 Cr.P.C. The perusal of the registered A. D., which has been annexed as a documentary evidence shows that the notice was received on 17.4.2007 though the said notice was ever received by the applicant as it does not bear his signature and even if it is assumed that the notice was received on 22.3.2007 and was served upon the applicant on 17.4.2007 no cause of action will accrue to the complainant to file a complaint under Section 138 of Negotiable Instrument Act on 26.4.2007. The complaint has been filed by the opposite party no. 2 is pre mature as according to the Sub Clause 2 of Section 138 of Negotiable Instrument Act the period of 15 days begins to run on the day next to the day of the service of notice while in the present case the period of 15 days will start from 18.4.2007 and will complete on 2.5.2007, as such the complaint filed on 26.4.2007 is pre mature. The complaint has been filed pre mature flouting the mandatory provisions of the Act the entire proceeding is vitiated in law.
Lastly, it has been contended that the cheque was never issued by the applicant at any point of time in the name of the opposite party no. 2 and when the applicant came to know about the presentation of the stolen cheques the applicant had lodged a complaint in the office of Commissioner of Police, C.B.D. Navi Mumbai on 26.2.2007 and also intimated the same to the bank. The said cheques do not bear the signature of the applicant. The signatures on the cheque were forged by the opposite party no. 2. Moreover, there was no enforceable liability due upon the applicant to issue the cheque in question and as the date of service of notice has not been mentioned in the complaint and on this account alone the proceeding was stayed by order dated 27.3.2009.
To prop up the submissions the learned counsel for the applicant has relied upon the decision of the Full Bench of Gujrat High Court in the case of Patel Dinesh Kumar Shivram Somdas Vs. Patel Keshavlal Mohan Lal and another reported in 2002 Volume 44 ACC 480 wherein it has been held that the period of 15 days envisaged by Section 138-C of Negotiable Instrument Act, 1881 will begin to run on the day next to the day on which the service of notice has been effectuated and the complainant's appeal was dismissed as the complaint was held pre mature. In another case the question was whether the compliant was within the period of 30 days from the date of accrual of cause of action. M/s Saketh India Limited and others Vs. M/s. India Securities Limited decided on 10.3.1999. In the said case also held that the period of one month for filing complaint will be reckoned from the date immediately following the day on which the period of 15 days from the date of receipt of the notice by the drawer expires.
The unreported decision of this court in Criminal Misc. Application 482 No. 3900 of 2013 (Rahul Srivastava Vs. State) decided on 16.12.2015 in which there was no mention of date of service of notice upon the accused persons and the complaint was filed before the expiry of 15 days and there was no averment regarding service of notice in the complaint and as such the petition was allowed as the mandatory requirement with regard to service of notice as required under Clause B of Section 138 of Negotiable Instrument Act has not been followed, hence the entire proceeding was quashed.
In Sarav Investment & Financial Consultancy Private Limited and another Vs. Llyods Register of Shipping Indian Office Staff Provident Fund and another, reported in 2007 (14) SCC 753, the Hon'ble Apex Court has held that service of notice is a part of cause of action hence communication to the drawer of cheque about dishonouring of cheque and calling upon him to pay the amount within 15 days from the date of service of notice is imperative and the date on which the notice was sought to be served the complaint was premature and on the above facts the complaint did not fulfil the requirement of law. It was held that no presumption can be raised in regard to the service of notice, which has not been effected in terms of the Statue on that count the appeal was allowed and the proceeding was quashed.
In Rahisuddin Saifi Vs. State of U.P. and another in Criminal Misc. Application 482 No. 33953 of 2013, in that case the disputed cheque was not encashed as the account holder i.e. the applicant has stopped payment is the contingency, which is not contemplated under Section 138 of the Act, therefore, criminal proceeding initiated by the opposite party no.2 in that case was quashed by the Hon'ble Court vide order dated 22.1.2020.
To sum up his argument the learned counsel for the applicant has again submitted that the alleged legal notice dated 9.3.2007 was served upon the applicant on 17.4.2007 and reply to the notice whatsoever dated 26.3.2007 was never given by the applicant and only to fill up the lacuna the opposite party no. 2 has managed the fabricated paper to bring on record that earlier a notice was sent to the applicant just only in order to show that the complaint has not been filed pre mature, hence order taking cognizance against the applicant deserves to be quashed.
Per contra learned counsel appearing on behalf of the complainant has contended that the applicant has not come with clean hands before this court. The applicant has played fraud not only with the complainant but with the court and obtained interim order dated 31.3.2009. In pursuance of the compromise to settle the dispute out of court in the civil proceeding the applicant had issued one cheque dated 29.4.2007 of Rs. 10,000,00/- and another of Rs. 35,000,00/- dated 6.2.2007, the details of which have already been mentioned in the complaint which were dishonoured by the bank on 9.2.2007 and returned to the complainant on 26.2.2007 along with bank memo dated 9.2.2007 for which the legal notice was given to the applicant on 9.3.2007 through counsel, which was duly served upon him. The reply to the said notice was given by the applicant on 26.3.2007. The applicant had also informed that the notice dated 9.3.2007 and 22.3.2007 has been received of which reply given by him on 26.3.2007 has also been appended as Annexures 4 and 5 to the counter affidavit of which bald reply has been given in the rejoinder affidavit filed by the applicant before this court. The notice has duly been served but in order to show that the complaint filed was premature has shown that notice was served upon the applicant on 17.4.2007 whereas the correct copy of the receipt clearly shows that the notice was not served upon him on 17.4.2007. The endorsement on the A.D. is 9.3.2007, which was received by the applicant. On account of the fraud played by the applicant in manipulating date of receipt a Misc. Case U/s. 430 Cr.P.C. has been filed against him. There is no violation of any provisions of the Act either in respect of service of notice or in respect of filing of complaint. The learned Magistrate has rightly summoned the applicant to face the trial as the cheque issued by the applicant was returned with the endorsement "insufficient fund" for which a complaint was filed against the applicant in which the court below has exercised his discretionary power well within his jurisdiction and summoned him to face the trial. The applicant is habitual criminal who was convicted under Section 138 Negotiable Instrument Act on 8.2.2007 by the court of Judicial Magistrate Fast Track Court, Nasik for three months simple imprisonment which was affirmed by the appellate court.
To substantiate the argument the learned counsel for the opposite party no. 2 has placed reliance on plethora of judgement, which are delineated herein under;
In C.C. Alavi Haji Vs. Palapetty Muhammed and another, 2007 (6) SCC 555, it has been held that it is not necessary to make averment in the complaint that the service of notice was evaded by the accused or that the accused had role to play for the return of the notice un-served. The requirement of issuing notice in terms of Section 138 proviso (b) stands complied with when the notice is sent in the manner by registered post by correctly addressing the drawer of the cheque. The notice was issued to the applicant, which was sent to his address by registered post with acknowledgement due. The complaint cannot be rejected on the ground of no proper service of notice. The contrary argument of the counsel for the applicant is not tenable that the notice was never received by the applicant rather it would draw a presumption that the applicant is avoiding to escape from legal consequence of Section 138 of the Act. Absence of averment in the complaint about service of notice upon accused also would not be proper to quash the complaint on the ground of absence of said averment in the complaint.
The Hon'ble Supreme Court in the case of Ajeet Seeds Limited Vs. K. Gopal Krishnaiah, (2014) 12 SCC 685 has observed that while explaining the nature of presumption under Section 114 of the Evidence Act and Section 27 of General Clauses Act has pointed out that the two presumptions are to be employed while considering the question of service of notice under Section 138 of the Act and in that case also the case of (C.C. Alvi Haji) (Supra) has been relied upon and it was thus observed that the High Court clearly erred in quashing the complaint on the ground that there was no recital in the complaint that the notice under Section 138 of the Act was served upon the accused. The High Court also erred on quashing the complaint on the ground that there was no proof either that the notice was served or it was returned un-served or un-claimed that is a matter of evidence. The Hon'ble Apex Court while further relying upon the decision in the case of Vinod Shivappa 2006 (3) SCC Crl. 114 where the Hon'ble Apex Court has held that service of notice is a matter of evidence and proof and it would be pre mature at the stage of issuance of the process of moving the High Court for quashing of the proceeding under Section 482 Cr.P.C., hence the Apex Court in the present case of Ajeet Seeds Limited (Supra) restored the complaint filed against the accused persons.
The learned counsel has further relied upon the decision of Lafarge Aggregates and Concrete India Private Limited Vs. Sukarsh Azad and another, 2014 (13) SCC 779 with respect to the object of Sections 138 and 142 of the Act and has relied upon paragraph 8 of the judgment;
"The object of bringing Sections 138 to 142 of the Negotiable Instruments Act on statute appears to be to inculcate faith in the efficacy of banking operations and credibility in transacting business of negotiable instruments. Despite several remedy, Section 138 of the Act is intended to prevent dishonesty on the part of the drawer of negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a bank and induces the payee or holder in due course to act upon it. Therefore, once a cheque is drawn by a person of an account maintained by him for payment of any amount or discharge of liability or debt or is returned by a bank with endorsement like (I) refer to drawer (ii) exceeds arrangements and (iii) instruction for stop payment and like other usual endorsement, it amounts to dishonour within the meaning of Section 138 of the Act. Therefore, even after issuance of notice if the payee or holder does not make the payment within the stipulated period, the statutory presumption would be of dishonest intention exposing to criminal liability".
Similarly in Laxmi Dyechem Vs. State of Gujarat and others, (2012) 13 SCC 375 has elaborately dealt with respect to the contingencies required to constitute of an offence under Section 138 of the Act in respect of dishonour of cheque. The first contingency "either because of the amount of money standing to the credit of that account is insufficient to honour the cheque" is a genus and dishonour for reasons such ?as account closed?, ?payment stopped?, ?referred to the drawer? "the signatures do not match or image is not found are only species of that genus. The liability to pay the amount when the registered notice was sent and acknowledged by the applicant, the applicant cannot be absolved.
It has been held in the aforesaid case that the legal position is that presumption in favour of the holder of a cheque under Section 139 of the Act has been held by the N.I. Act as also by this Court to be a rebuttable presumption to be discharged by the accused/drawee of the cheque which may be discharged even at the threshold where the Magistrate examines a case at the stage of taking cognizance as to whether a prima facie case has been made out or not against the drawer of the cheque.
In the case of Rangappa Vs. Sri Mohan (2010) 11 SCC 441 held that failure of the drawer of the cheque to put up a probable defence for rebutting the presumption that arises under Section 139 would justify conviction even when the drawer (appellant) may have alleged that the cheque in question had been lost and was being misused by the complainant.
In the case of HMT Watches Limited Vs. M.A. Abida and another, (2015) 11 SCC 776 while considering the various aspect of the scope of the power to be exercised under Section 482 Cr.P.C. the Hon'ble Apex Court has reminded that where the disputed questions of fact are involved only trial court can determine the disputed questions of fact. At this stage it cannot be said that no offence is made out punishable under Section 138 of the Act. In the said case the trial court was directed to proceed with the trial in the complaint case.
Thus in view of the catena of the decisions of the Apex Court and also passed by this court in Smt. Reena Tripathi Vs. State of U.P. reported in 2014, Volume 8 A.D.J. 349 wherein it has been held that after service of notice if the amount of disputed cheques is not paid the cause of action accrued to the complainant to file the complaint against the drawer of the cheque. The interim order dated 31.3.2009 passed in favour of the applicant staying the proceeding of the summoning order dated 2.6.2007 is liable to be vacated and the petition be dismissed.
I have considered the rival submissions of the learned counsel at the Bar, the disputed question of fact cannot be dealt with in exercise of power under Section 482 Cr.P.C. in view of the catena of decisions of the Hon'ble Apex Court; the denial of the applicant that the cheque has not been issued by him and his cheque was lost and in respect of which Bank has also been informed; that the complaint is pre mature, the mandatory requirement of service of notice is lacking; the complaint was filed pre mature are all disputed questions of fact, which can only be gone into during the course of trial. The complaint was filed along with the oral and documentary evidence, which have already been referred to in the preceding paragraph, prima facie constitutes offence against the applicant. While returning the cheque it has been clearly endorsed by the bank "insufficient fund" also comes within the definition of Section 138 of the Act and on this count alone it can be said that the applicant had issued the cheque knowingly to defeat the claim of the complainant when the applicant's account was insufficient to honour the cheque, the endorsement of 'insufficient of fund' itself shows that the bank was prevented to honour the cheque whether it was with respect to debt or liability for discharge, will only be examined by the trial court.
In view of the statutory presumption, which is rebuttal presumption under Section 139 of the Act by the drawee of the cheque. The language used in Section 138 of the Act is based upon five components, namely;
(1) Drawing the cheque;
(2) Presentation of the cheque to the Bank;
(3) Returning of the cheque unpaid by the drawer;
(4) Given notice in writing to the drawer of the cheque demanding payment of the amount;
(5) Failure of the drawer to make payment within 15 days of receipt of the notice.
The cheque dated 29.1.2007 of Rs. 10,00,000/- given by the applicant was deposited by the complainant on 31.1.2007 in his bank at Canara Bank, Roorki Road, Muzaffar Nagar, which was returned by the bank with the endorsement of "insufficient fund" on 9.2.2007 along with memo dated 14.2.2007, which was received by the complainant on 26.2.2007, hence a notice was given with respect to the dishonour of cheque by the complainant through registered post on 9.3.2007, which was received at the address of the applicant and even after expiry of 15 days when the required amount mentioned in the cheque was not returned nor any reply was given, hence the complaint was filed on 26.4.2007 by the opposite party no. 2. Merely not mentioning the date of receipt of notice or service of notice by the complainant is a disputed question of fact, which shall be considered by the trial court.
In view of the Section 27 of the General Clauses Act it is not necessary to mention in the complaint that service of notice was evaded by the accused or that the accused has stated about the notice to be un-served when the notice was sent by registered post at the address of the applicant, the mandatory requirement of issue of notice under Clause (b) of proviso to Section 138 of the Act stands complied with, therefore, the cognizance of the complaint under Section 138 of the Act has been taken as the court was satisfied prima facie that the case is made out under that section and that the procedural requirement has been complied with. To rebut presumption about the service of notice or that the address was incorrect or the filing of complaint prior to the expiry of notice period that would be considered by the trial court at the appropriate stage.
Thus in view of the above prolix discussion the prayer for quashing the proceeding is refused. The application is bereft of any merit accordingly dismissed.
Since the proceeding is pending since 2007, the court below is directed to proceed with the case expeditiously in accordance with law on its own merit.
The office is directed to communicate this order to the court below through FAX for information and necessary compliance.
Order Date :- 28.1.2020 Shahnawaz