Criminal Appeal No.21 of 2003

21st October, 2004

Petitioner Counsel: Mr. M. S. SONAK , Mr. D. PANGAM
Respondent Counsel: Mr. NITIN SARDESSAI

Cases Cited:
M/s. Madan and Co. Vs. Wazir Jaivir Chand, (1989)1 SCC 264 [Para 9]
Satish Jayantilal Shah Vs. Pankaj Mashruwala, 1996 Cri.L.J. 3099 [Para 10]
K. Bhaskaran Vs. Sankaran Vaidhyan Balan, 1999(4) ALL MR 452 (S.C.)=(1999)7 SCC 510 [Para 11,14,15,16]
Aparna Agencies, Hyderabad Vs. P. Sudhakar Rao, 1999(4) ALL MR (JOURNAL) 11 [Para 12]
Basant Singh Vs. Roman Catholic Mission, AIR 2002 SC 3557 [Para 13]
Shri. Vijayanand Venktesh Naik Vs. Shri. Thomas Rodrigues, Cri. Appeal No.26/2002, Dt.04/07/2003 [Para 14]
Dalmia Cement Ltd. Vs. Galaxy Traders and Agencies Ltd., 2001(1) ALL MR 846 (S.C.)=(2001)6 SCC 463 [Para 15,16]
Shanku Concretes Pvt. Ltd. Vs. State of Gujarat, (2000)3 Crimes 602 [Para 17]
Kochayippa Vs. Suprasidhan, 2002(3) ALL MR (JOURNAL) 31 [Para 20]

JUDGMENT

JUDGMENT :- This is complainant's appeal against acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881 (Act, for short) by Judgment/Order dated 21st September, 2002 of the learned Judicial Magistrate, First Class, Vasco-da-Gama, in Criminal Case No.163/N/2000/D.

2. There is no dispute that the complainant-Credit Society had advanced a loan of Rs.1,50,000/- to the accused. On or about 9th October, 2000, the accused issued a cheque to the complainant in the sum of Rs.90,000/- drawn on Bank of India, Headland Sada Branch, Vasco-da-Gama. When the said cheque was presented to the Goa State Co-operative Bank Ltd., the same was returned with endorsement "Funds insufficient". The complainant claims to have sent a registered letter dated 23rd October, 2000, informing the accused that the said cheque was returned with the said remark and calling upon the accused to make the payment of Rs.90,000/- within a period of 15 days from the receipt of the said notice.

3. As the said notice was not complied with, the complainant filed a complaint on or about 21st November, 2000, and thereafter, in the course of the trial, the complainant examined their Secretary and produced necessary documents including the said cheque, notice, etc.

4. The learned Judicial Magistrate, First Class, has acquitted the accused on two counts. The first is on the basis that the A. D. card produced by the complainant it could be said that the accused had received the said notice. The second is that what was due and payable by the accused to the complainant as on the date of issuance of the said cheque on 30th September, 2000, was Rs.86,089/- and, therefore, there was no existing liability on the part of the accused to pay Rs.90,000/- being the amount of the cheque issued to the said complainant.

5. Admittedly, the learned Judicial Magistrate, First Class, has concluded that the notice issued was addressed to the accused at her business address, an address which was given by the accused when she obtained the said loan as well as the address where the accused was served with the summons sent to the accused in the said criminal case. It is also an admitted position that the said Secretary who was examined on behalf of the complainant admitted in his evidence that the signature on the A. D. card did not tally with the signature of the accused. On facts, the learned Judicial Magistrate, First Class, concluded that it could not be said that the accused had received the said notice, and therefore, was not liable for an offence under Section 138 of the Act. The learned Judicial Magistrate, First Class also came to the conclusion that the presumption which was otherwise available in favour of the complainant, was rebutted.

6. This first finding of the learned Judicial Magistrate, First Class has been challenged by Mr. M. S. Sonak, learned Counsel of the Appellant by placing reliance on various authorities. It is the submission of Mr. Sonak, learned Counsel that the said Secretary who was examined on behalf of the complainant had at no stage stated that the said signature on the said A. D. card was not that of the accused and that it would be open for any accused to scribble anything on a A. D. card and then turn around and say that the signature was not of the accused. It is his submission that as long as the said registered article was delivered at the business address of the accused, the provisions of Section 138 of the Act r/w. the presumption available to the complainant, would be satisfied.

7. On the other hand, Mr. Nitin Sardessai, learned Counsel of the Respondent/Accused has submitted that in order to rebut the said presumption it was not necessary for the accused to have stepped into the witness box and the said presumption could also be rebutted from the evidence led on behalf of the complainant. Mr. Sardessai, learned Counsel has submitted that once it was accepted on behalf of the complainant that the signature was not that of the accused, it was for the complainant to have proved, by examining the postman, that the postal article was in fact received by the accused.

8. Section 138(b) of the Act, inter alia, provides that the payee or the holder in due course of the cheuqe, as the case may be, is required to make a demand for the payment of money by giving a notice in writing, to the drawer of the cheque, within 30 days from the receipt of the amount (sic - memo) from the Bank regarding the return of the cheque, as unpaid. Section 27 of the General Clauses Act, 1897, deals with meaning of service by post and provides that where any Central Act or Regulation made after the commencement of this Act authorities or requires any document to be served by post, whether the expression "serve" or either of the expression "give" or "send" or any other expression is used, them, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying 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.

9. In the case of M/s. Madan and Co. Vs. Wazir Jaivir Chand ((1989)1 SCC 264) the Apex Court was dealing with a notice despatched by registered post and in this context, the Supreme Court stated that all that a landlord can do to comply with this provision is to post an acknowledgement due or otherwise (sic) containing the tenant's correct address and once he does this and the letter is delivered to the post office, he has no control over it. It is then presumed to have been delivered to the addressee under Section 27 of the General Clauses Act. Under the rules of the post office, the letter is to be delivered to the addressee or a person authorised by him. Such a person may either accept the letter or decline to accept it. In either case, there is no difficulty, for the acceptance or refusal can be treated as a service on, and receipt by, the addressee. The difficulty is where the postman calls at the address mentioned and is unable to contact the addressee or a person authorised to receive the letter. All that he can then do is to return it to the sender. The Indian Post Office Rules do not prescribe any detailed procedure regarding the delivery of such registered letters. When the postman is unable to deliver it on his first visit, the general practice is for the postman to attempt to deliver it on the next one or two days also before returning it to the sender. However, he has neither the power nor the time to make enquires regarding the whereabouts of the addressee; he is not expected to detain the letter until the addressee chooses to return and accept it; and he is not authorised to affix the letter on the premises because of the assessee's absence. His responsibilities cannot, therefore, be equated to those of a process server entrusted with the responsibilities of serving the summons of a court under Order V of the CPC. The Hon'ble Supreme Court further proceeded to observe that they had to choose the more reasonable, effective, quitable and practical interpretation and that would be to read the word "served" as "sent by post", correctly and properly addressed to the tenant, and the word "receipt" as the tender of the letter by the postal peon at the address mentioned in the letter. No other interpretation, would fit the situation as it was simply not possible for a landlord to ensure that a registered letter sent by him gets served on, or is received by, the tenant.

10. In the case of Satish Jayantilal Shah Vs. Pankaj Mashruwala and another (1996 Cri.L.J. 3099) the Court was dealing with the service of legal notice as contemplated under sub clause (b) to the proviso of Section 138 of the Act. The contention raised was that the notice did not bear the signature of the applicant and it was found that the signature on the A. D. differed from the cheque in question. The Court noticed that the question was whether it was received or reached at the address mentioned and that the correctness of the address as mentioned in the cause title of the notice as well as on the acknowledgement was not in dispute. The Court, therefore, concluded that since the despatch of notice by registered post was not under challenge a presumption that notice/letter had reached and delivered to the addressee could be raised under Section 116 of the Indian Evidence Act. Since the address was correct and the letter posted by ordinary course reaches to the addressee the Court had no hesitation in raising presumption that the notice in question did reach to the addressee and had been delivered to the addressee or any authorised person on his behalf and, therefore, the contention was rejected.

11. In the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan and another ((1999)7 SCC 510) : [1999(4) ALL MR 452 (S.C.)] the Apex Court was considering whether a cause of action would arise in a case where the notice was returned with endorsement as "unclaimed" and the Apex Court observed that on the part of the payee he has to make a demand by giving a notice in writing. If that was the only requirement to complete the offence on the failure of the drawer to pay the cheque amount within 15 days from the date of "giving", the travails of the prosecution would have been very much lessened but the legislature says that failure on the part of the drawer to pay the amount should be within 15 days "of the receipt". It is, therefore, clear that "giving notice" in the context is not the same as receipt of notice. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the notice to the drawer at the correct address. The Court then referred to the Black's Law Dictionary and observed that 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. Referring to a notice which is unclaimed the Apex Court proceeded to refer to Section 27 of the General Clauses Act, 1897 and observed further that no doubt Section 138 of the Act does not require that the notice should be given only by "post". Nonetheless the principle incorporated in Section 27 can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was really not served and that he was not responsible for such non-service. Any other interpretation can be proved to 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.

12. In the case of Aparna Agencies, Hyderabad Vs. P. Sudhakar Rao and another (1999(4) ALL MR (JOURNAL) 11) the Andhra Pradesh High Court referring to Section 27 of the General Clauses Act, 1897 and while dealing with a case under Section 138 of the Act observed that the language of Section 27 was plain and immediately three requirements were to be fulfilled for presuming deemed service namely :- (1) properly addressing, (2) pre-paying, and (3) posting of registered post. The High Court observed that if the registered cover did not return back it is a situation which was not at all contemplated either by Section 27 of the General Clauses Act or Section 11 of the Indian Evidence Act. The Court further observed that service shall be deemed to have been effected by (1) properly addressing, (2) pre-paying, and (3) posting of registered post and once the said requirements were complied with the raising of presumption of deemed service were made out.

13. In the case of Basant Singh and another Vs. Roman Catholic Mission (AIR 2002 SC 3557) the Apex Court again dealing with Section 27 of the General Clauses Act in relation to Order 5, proviso to sub-rule (2) of R.19-A, C.P.C. observed that once it is proved that summons were sent by registered post to a correct and given address, the defendant's own conduct becomes important. The Apex Court observed that the presumption both under Section 27 of the General Clauses Act, 1897 as well as O.5, proviso to sub-rule (2) of R.19-A, C.P.C. were rebuttable and it was always open to the defendants to rebut the presumption by leading convincing and cogent evidence. In the context of the facts of that case, the Apex Court observed that the defendants could have examined the postman who might have been a material witness and whose evidence might have had a material bearing for proper adjudication but had failed to discharge the onus passed upon them.

14. On the other hand, on behalf of the Accused, reliance has been placed on an unreported decision of this Court dated 4th July, 2003, in Criminal Appeal No.26 of 2002 in the case of Shri. Vijayanand Venktesh Naik Vs. Shri. Thomas Rodrigues and another. In this case, this Court observed that if the prosecution at the very threshold fails to establish that a notice has been duly received by the accused, the prosecution so launched is bound to fail. Apparently, it was a case where the A. D. card had a signature of one Amonkar and not the accused Thomas Rodrigues. However, it is seen that there is no reference in that case either to Section 27 of the General Clauses Act, 1897 or to the Judgment of the Supreme Court in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan and another (supra).DATE : 21ST OCTOBER, 2004.

15. In the case of Dalmia Cement Ltd. Vs. Galaxy Traders and Agencies Ltd. ((2001)6 SCC 463) : [2001(1) ALL MR 846 (S.C)] the Apex Court referred to the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan and another (supra) and again observed that Section 27 of the General Clauses Act deals with the presumption of service of a letter sent by post. The despatcher of a notice, had, therefore, a right to insist upon and claim the benefit of such a presumption. But as the presumption is a rebuttable one, he has two options before him. One is to concede to the stand of the sendee that as a matter of fact he did not receive the notice and the other is to contest the sendee's stand and take the risk for proving that he, in fact received the notice. It is open to the despatcher to adopt either of the option; if he opts for the former, he can afford to take appropriate steps for the effective service of notice upon the addressee. Such a course appears to have been adopted by the appellant Company in this case and the complaint filed, admittedly, within limitation from the date of the notice of service conceded to have been served upon the respondents. It may be noted that in this case, the accused by their letter dated 13-06-1998, had intimated to the complainant that they had in fact received empty envelopes without any contents and requested the appellant to mail the contents and as a abundant caution the cheque was presented again and after its dishonour another statutory notice was issued to the accused which was received by the accused on 27-07-1998.

16. The submission made on behalf of the accused that the ratio of K. Bhaskaran's case will not be attracted to the case at hand cannot be accepted. This is a case where the notice was sent at the business address of the accused and was received at the business address of the accused, about which there is no dispute. If the presumption available under Section 27 of the General Clauses Act, 1897 can be imported in a case where the notice is returned as "unclaimed" it can with equal force if not more be imported in a case where the postal article is received at the business address of the accused irrespective of whether it was received by the accused himself or herself or by some other member of his or her family. No doubt, the presumption under Section 27 of the General Clauses Act, 1897 is a rebuttable presumption but the said presumption cannot be rebutted by an accused only by denying the receipt of the notice in the statement under Section 313 of the Code of Criminal Procedure, 1973. Certainly, something more than that is required to be done on the part of the accused to rebut the said presumption. As rightly observed by the Apex Court in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan and another (supra) 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. It also cannot be ruled out that a cunning accused person may just scribble something on the A. D. card and not his real signature with a view to take a plea that such a notice was not received by the accused and this also could not be ruled out in the case at hand. As observed by the Supreme Court in the case of Dalmia Cement Ltd. Vs. Galaxy Traders and Agencies Ltd. (supra) efforts to defeat the objectives of law by resorting to innovative measures and methods are to be discouraged, lest it may affect the commercial and mercantile activities in a smooth and healthy manner, ultimately affecting the economy of the country. The laws relating to the Act which, therefore, require to be interpreted in the light of the object intended to be achieved by it despite there being deviation in the general law and the procedure provided for the redressal of the grievance of the litigants. The presumption available under Section 27 of the General clauses Act or for that matter under Section 114(f) of the Indian Evidence Act, 1872 is available to both Civil as well as Criminal proceedings. It was for the accused to rebut the said presumption either through the evidence led by the complainant or by leading evidence. In this case, accused has failed to rebut the said presumption available in favour of the complainant under Section 27 of the General Clauses Act, 1897. This being the position in my view, the learned Judicial Magistrate, First Class, committed a gross error in holding that the presumption in favour of the complainant was rebutted by the accused by establishing that she had not received the said notice. The admission on behalf of the complainant that the signature on the A. D. card did not tally with the signature of the accused was not sufficient to displace the said statutory presumption.

17. On the second count, the learned Judicial Magistrate, First Class, came to the conclusion that the liability of the accused as on 30th September, 2000, was only Rs.86,089/- and not Rs.90,000/-, being the value of the cheque which was issued in favour of the complainant. The learned Judicial Magistrate, First Class, relied on the case of Shanku Concretes Pvt. Ltd. and others Vs. State of Gujarat ((2000)3 Crimes 602) and held that since the cheque issued was not in discharge of the existing debt or liability, the provisions of Section 138 of the Negotiable Instruments Act, 1881 would not be attracted.

18. Section 138, inter alia, provides that 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 outstanding 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 provisions of this Act, be punished with imprisonment for a term ... etc. In other words, Section 138 provides for issuance of a cheque towards debt or other liability in whole or in part. On behalf of Complainant in this case two statements were produced, one of which showed that the total amount availed by the accused was Rs.1,50,000/- and which also showed that the total amount overdue by the accused as on 30th September, 2000, was Rs.86,089/- and the other which showed that the balance in the account of the accused as on 30th September, 2000 was Rs.1,92,350/-. In fact, it was argued before the learned Judicial Magistrate, First Class that the balance due and payable by the accused as per Exh.PW1/E was Rs.1,92,350/-. However, it appears that the learned Judicial Magistrate, First Class, totally overlooked the said submission made before him and considered only the submission which was made with reference to Exh.PW1/D-3 that the overdue amount as on 30th September, 2000, was Rs.86,089/-. From the evidence produced on behalf of the complainant both oral and documentary, it was abundantly clear that the accused owed to the Bank on 30th September, 2000, a total sum of Rs.1,92,350/- and the cheque which was issued for Rs.90,000/- was for an amount which was much less that the amount due.

19. It is the submission of Mr. Nitin Sardessai, learned Counsel of the Respondent/Accused that there is no perversity in the second finding given by the learned Judicial Magistrate, First Class. In my view, there is absolute perversity in the said finding because the learned Judicial Magistrate, First Class, has overlooked the fact that on the date of issuing the cheque, the accused had owed to the complainant Bank a total sum of Rs.1,92,350/- which was much more than the amount of the cheque of Rs.90,000/- only and being so, the said cheque was issued only towards the part of the liability which the accused had towards the repayment of the loan taken by the accused. This finding deserves to be upset as perverse.

20. Mr. M. S. Sonak, learned Counsel has placed reliance on the case of Kochayippa Vs. Suprasidhan (2002(3) ALL MR (JOURNAL) 31). It has been held in this case that a perusal of the provisions of Section 138 shows that the amount mentioned in the cheque need not be the same as the amount of consideration that actually passed. The words "in whole or in part" of any debt or other liability assumes significance in this context. Even if the cheque is for a lesser amount than the actual amount of consideration, still a cause of action would be available to the payee under Section 138 of the Negotiable Instruments Act. If that is so the question of a cheque for a larger amount than what is actually received by the accused also would make no difference provided the entire amount so mentioned is necessary to discharge the debt or legal liability.

21. In conclusion, it may be observed that the finding given by the learned Judicial Magistrate, First Class on both counts deserves to be set aside as erroneous and perverse. Consequently, it must be held that the complainant had proved its case beyond reasonable doubt against the accused. The accused, is, therefore, hereby held guilty under Section 138 of the Negotiable Instruments Act, 1881.

Appeal allowed.