2007 ALL MR (Cri) 231
IN THE HIGH COURT OF JUDICATURE AT BOMBAY(PANAJI BENCH)
N.A. BRITTO, J.
Mr. Gabriel Peter D'souza S/O. Estainslau D'souza Vs. Mrs. Cirila Rosa Maria Pinto
Criminal Revision Application No.39 of 2005
27th September, 2006
Petitioner Counsel: Mr. D. J. PANGAM
Respondent Counsel: Mr. A. F. DINIZ
(A) Negotiable Instruments Act (1881) S.138 - Dishonour of cheque - Demand notice - Service of notice - Notice returned with endorsement "unclaimed" - Presumption of service of notice available to the complainant and it is for the accused to rebut the said presumption.
Once a postal article is returned with endorsement "unclaimed" it presupposes that the postman has made an endeavour not only to deliver the said article at the given address but has also given notice of arrival of the postal article as per the relevant provision of postal manual in that regard and only after the expiry of seven days of the said article remaining unclaimed that he has returned the same as unclaimed, and, in such a situation the presumption of service was certainly available to the complainant and it was for the accused to have rebutted the said presumption. General Clauses Act (1887), S.27. [Para 6]
(B) Negotiable Instruments Act (1881) S.138 - Criminal P.C. (1973), S.397 - Revision - Dishonour of cheque - Time barred cheque - Accused cannot be heard for the first time in revision that the subject cheque was given towards a debt which was time barred. (Para 7)
(C) Civil P.C. (1908), O.21, R.54 - Attachment of immovable property - Conditions for - It is necessary for the attachment to be effective, strict compliance with conditions is very much necessary - If the mandatory conditions are not complied with, there is no attachment in the eyes of law. AIR 1954 Bom. 251 - Rel. on. (Para 15)
(D) Negotiable Instruments Act (1881) S.138 - Dishonour of cheque - Scope and applicability of S.138 - Cheque issued by accused after intimation to Bank not to honour the cheque - Cheque dishonoured on ground of insufficient funds - S.138 is attracted - Accused would be liable u/s.138 of Negotiable Instruments Act. 2003(2) ALL MR 750 (S.C.) - Rel. on. (Para 5)
K. Bhaskaran Vs. Sankaran Vaidyan Balan, 1999 ALL MR (Cri) 1845 (S.C.)=(1999)8 SCC 608 [Para 6]
Chandrakant Ganpat Sovitkar Vs. State of Maharashtra, 2001 Vol.103(1) Bom.L.R. 369 [Para 8,15]
Ramanujulu Naidu Vs. Gajaraja Ammal, AIR (37)1950 Madras 146 [Para 14]
Tarsem Singh Vs. Sukhminder Singh, 1998(2) ALL MR 528 (S.C.)=(1998)3 SCC 471 [Para 14]
A.T.K.P.L.M. Muthiah Chetti Vs. Palaniappa Chetti, AIR 1928 PC 139 [Para 15]
Mahadev Vasudeo Vs. Janaksingh Saigal, AIR 1954 Bom. 251 [Para 15]
Goa Plast Pvt. Ltd. Vs. Shri. Chico Ursula D'Souza, 2003(2) ALL MR 750 (S.C.)=2004(2) SCC 235 [Para 15]
K.S.L. and Industries Ltd. Vs. Mannalal Khandelwal and Vijaya Agarwal, 2005 ALL MR (Cri) 1105=(2005)1 Bom.C.R. (Cri.) 520 [Para 17]
Pradeep Sangodkar Vs. State of Goa, W. P. No.281/2006, Dt.24-8-2006 [Para 17]
JUDGMENT :- In this revision petition, the accused questions the correctness of the Judgment dated 14-9-2005 of the learned Sessions Judge, Panaji, upholding the conviction and sentence imposed upon the accused under Section 138 of the Negotiable Instruments Act, 1881(Act, for short) by Judgment dated 19-8-2004 of the learned J.M.F.C., Mapusa.
3. The case of the complainant was that the accused had entered into an agreement dated 29-3-1997 for the development of a property allotted to her by Order dated 26-3-1995 of the learned Civil Judge, Senior Division, Panaji, surveyed under S.No.19/2 and in terms of the said agreement the accused had paid to the complainant Rs.1,25,000/- and was liable to pay to her Rs.18,75,000/-, to be paid in five instalments. The last instalment was to be paid on 30-9-1997. The complainant (sic - accused?), however, did not honour the said agreement and after the five cheques bounced, issued a cheque dated 19-4-2000 in the sum of Rs.13,00,000/- and when the complainant presented the said cheque the said cheque was returned with remark "payment stopped by drawer" dated 11-7-2000. The complainant therefore served a notice upon the accused dated 24-7-2000 by registered A.D. but the said notice was returned unclaimed and as the notice was not complied with, the complainant filed the complaint.
5. On the other hand, the case of the accused, as reflected in his statement recorded under Section 313 of the Code of Criminal Procedure, 1973 (Code, for short), was that he had not issued the cheque for Rs.13,00,000/- on 19-4-2000 but a blank cheque was issued in December, 1997. The accused stated that after signing of the said agreement there was an execution petition filed against the complainant by one Pinto (Pantaleao Pinto) and that the accused had paid "the auction of Rs.2,11,000/-" and got the property of the complainant on auction on 9-1-1988 which was after the agreement and in view of the said auction he became the exclusive owner of the property and therefore he was not owing any legally enforceable debt to the complainant. The accused also stated that the cheque in question was given to the complainant in December, 1997 with an understanding that she wanted to discuss about the balance amount and the complainant had stated that she would commit suicide and he had written to the Bank to stop payment. The accused also stated that he had lost his cheque book and some of the cheques issued were blank and he asked the Bank to stop the payment. The accused examined two witnesses in his defence namely Satish Falari/DW-1 who stated that in view of the letter issued by the accused dated 22-1-1999 the payment was stopped and also stated that the account was dormant since 1-1-1999 and even if the letter was not issued to stop the payment of the cheque, the cheque would not have been realized as there was no balance in the account. The accused also examined Pantaleao Pinto/DW2 who, inter alia, stated that he had filed a civil suit for the recovery of amount of Rs.81,893.10 against the complainant which was decreed ex-parte and that after the property was sought to be attached an auction was to be held, the accused made an application and deposited the sum of Rs.2,10,000/- with interest and since the accused paid the money, the execution was withdrawn by him.
6. There are three submissions made on behalf of the applicant/accused. The first is as regards non service of the statutory notice. It is submitted by Mr. D. Pangam, the learned Counsel on behalf of the accused that the notice was addressed on an incomplete address of the accused and therefore no presumption of service could have been drawn against the accused. He submits that the address did not have house number of the accused. On the other hand, Mr. A. F. Diniz, the learned Counsel on behalf of the complainant has submitted that as regards service of notice there are concurrent findings of fact arrived at by both the Courts below and therefore no case for interference has been made out. I am inclined to accept the submission of the learned Counsel Mr. Diniz. The learned trial Court has observed that the statutory notice was addressed to the accused at Limavaddo, Tivim, Bardez, Goa which is the address given by the accused in his letter addressed to the Bank dated 22-1-1999. The learned trial Court has further observed that the notice was returned with a remark as "unclaimed" and that the said remark was sufficient to draw the presumption arising under Section 27 of the General Clauses Act, 1887. It appears before the learned Sessions Judge what was sought to be argued was that the surname of the accused was wrongly mentioned on the said statutory notice. The learned Sessions Judge dealt with this aspect in para 23 of the Judgment with reference to the case of K. Bhaskaran Vs. Sankaran Vaidyan Balan ((1999)8 SCC 608 : [1999(4) ALL MR 452 (S.C.) : 1999 ALL MR (Cri) 1845 (S.C.)]) wherein the Apex Court has held that the principles incorporated in Section 27 of the General Clauses Act can be imported in a case when the sender has dispatched the notice by post with the correct address written on it and then it can be deemed to have been served on the sender unless the sender proves that it was not really served and that he was not responsible for such non service. The learned Sessions Judge noted that in the case at hand, the notice was dispatched at the same address which was stated in the agreement between the parties, which was produced at Exh.PW1/E, and therefore it could not be inferred that the notice was not dispatched at the correct address merely because the surname of the accused was spelt as De Souza instead of D'Souza more so when there was nothing on record to indicate that another person by name of the accused was also residing at the said address and therefore the accused had failed to rebut the presumption under Section 27 of the said Act. The statutory notice does not have the house number of the accused but has the name of the ward and the village in which the accused was residing, besides the name of the taluka as well. In the complaint filed by the complainant the address of the accused is given with reference to the house number. It is seen that in the agreement and in most other documents produced on behalf of the accused, the accused did not even give the address with reference to the ward (Limavaddo) but gave his address only with reference to village (Tivim), Bardez, Goa. It is certainly not the case of the accused that he had given incomplete address in the said documents. In other words, the address which the accused gave in the said documents could be presumed to have been an address at which the accused could have been reached to. Once a postal article is returned with endorsement "unclaimed" it presupposes that the postman has made an endeavour not only to deliver the said article at the given address but has also given notice of arrival of the postal article as per the relevant provision of postal manual in that regard and only after the expiry of seven days of the said article remaining unclaimed that he has returned the same as unclaimed, and, in such a situation the presumption of service was certainly available to the complainant and it was for the accused to have rebutted the said presumption which the accused had failed to rebut. The conclusion arrived at by both the Courts below, therefore could not be faulted.
7. The second submission made by the learned Counsel Mr. Pangam is that the agreement between the parties was executed on 29-3-1997 and the subject cheque which is dated 19-4-2000 was issued for payment of a time barred debt. This submission is made with reference to the explanation under Section 138 of the Act and has been made for the first time in this revision before this Court, and in my view the same cannot be allowed to be so taken when it is the very case of the accused that he had given the said cheque in December, 1997. Moreover, the complainant had herself stated that as per the agreement five cheques were issued by the accused towards the five instalments by which the accused was required to pay Rs.18,75,000/-. The complainant had also stated that after the said five cheques had bounced, the accused had made various payments of the balance amount in instalment of Rs.5000/-, Rs.10,000/- etc. and there was another meeting thereafter between the complainant and the accused in the year 1999 and the subject cheque dated 19-4-2000 was brought by her Advocate Shri. Monteiro and given to her. The subsequent payments made by the accused to the complainant in the sum of about Rs.6,00,000/- were not disputed by the accused in the cross-examination of the complainant and the subject cheque of Rs.13,00,000/- dated 19-4-2000 was apparently given towards the balance amount which the complainant had to receive pursuant to the said agreement dated 29-3-1997. Payments made extend the period of limitation. In such a situation, the accused cannot be heard for the first time in this revision that the subject cheque was given towards a debt which was time barred.
8. The third submission made by Mr. Pangam is with reference to Section 22 of the Indian Contract Act. It provides that when both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. It is the submission of Mr. Pangam that when the agreement dated 29-3-1997 was executed by the complainant and the accused the property subject matter of the said agreement was under attachment, the same having been attached by Order dated 24-7-1996 of the learned Civil Judge, Senior Division and therefore could not have been the subject matter of the agreement between the parties. The learned Counsel Mr. Pangam has further submitted that the said property which was under attachment by virtue of Order dated 24-7-1996 was subsequently purchased by the accused as can be seen from the Sale Certificate dated 13-12-2002 issued by the learned Civil Judge, Senior Division at Mapusa in Execution Application No.58/91/A. In reply, Mr. Diniz, the learned Counsel on behalf of the respondent has submitted that there was no attachment in law of the said property as on the date of execution of the agreement dated 29-3-1997, as there was no compliance with the mandatory requirements of O.21, R.54, C.P.C. and therefore the said attachment could not have come in the way of the complainant and the accused in entering into the said agreement. Learned Counsel Mr. Diniz has also submitted that the said Sale Certificate was fraudulently obtained by the accused after the Execution Proceedings were closed by the Decree Holder who had initiated the same. In support of his submission, Mr. Diniz has placed reliance on a Judgment of this Court in Chandrakant Ganpat Sovitkar Vs. State of Maharashtra (2001 Vol.103(1) Bom.L.R. 369).
10. The said Execution Proceedings show that one Pantaleao Pinto had obtained an ex-parte decree on 9-7-1991 against the complainant in the sum of Rs.81,893.10 and had filed Execution Application No.58/1991 against the complainant. The said Execution Application, although was filed on 7-12-1991, the complainant as J.D. was not served with notice of the said Execution Application till 24-7-1996 when the said Decree Holder obtained a prohibitory order against the complainant in terms of O.21, R.54 C.P.C. after an application was filed on behalf of the Decree Holder on the same day. The learned Civil Judge, Senior Division on the application filed on behalf of the Decree Holder on 24-7-1996 had ordered the attachment of the entire property known as Mainabhat situated at Arpora surveyed under 19/2 and had further ordered that the property be kept in custody of the complainant pending further orders. It is undisputed that the said Order dated 24-7-1996 made under O.21, R.54 C.P.C. was not served either on the complainant or her husband Agnelo Bomparto D'Douza or the accused who was presumably in possession of the said property at the relevant time. The complainant became the exclusive owner of the said property surveyed under S. No.19/2 pursuant to the Order dated 15-3-1995, as stated in one of the clauses of the agreement dated 26-3-1997. The records and proceedings of the said Execution Application show that the notice of the prohibitory Order dated 24-7-1996 was displayed in the Office of the Mamlatdar and the Office of the Court of Civil Judge, Senior Division at Mapusa but as already noted it was not served either on the complainant or her husband or the accused nor proclaimed at some place on or adjacent to the property which was ordered to be attached by beat of drum or other customary mode nor a copy of the said Order was affixed on a conspicuous part of the property. In other words, the first part of Sub-Rule 2 of Rule 54, O.21, C.P.C. was not complied with.
11. Not only the complainant was not given the custody of the property as required by Order dated 24-7-1996, the complainant was also not served with the said prohibitory order. The complainant was served with notice of the said Execution Application in terms of O.5, R.20(IA), C.P.C. to appear on 2-9-1996 on which date, on behalf of the Decree Holder, an application was filed to hold public auction of the undivided half share of the property Mainabhat surveyed under No.19/2 of village Arpora. Thereafter, the complainant filed an application on 31-3-1997 seeking time of three months to pay the decretal amount and it also appears that certain cheques towards the payment were issued to the said Decree Holder but as the cheques could not be honoured, on 21-10-1997 the Decree Holder prayed for auction to be advertised and which was held on 15-12-1997 in which one Raymond Fernandes was adjudged as the highest bidder. The said Raymond Fernandes on the same day deposited 25% of the amount of the bid price i.e. Rs.52,500/-.
12. On 22-12-1997, the accused, as third party in the said Execution Proceedings filed an application for stay of the Execution Proceedings and for setting aside the auction held on 15-12-1997 and by Order of the same date, the accused was required to deposit an amount equivalent to 5% of the auction price and further Execution Proceedings were stayed and the proceedings were fixed on 7-1-1998. On 26-12-1997 when the auction purchaser Raymond Fernandes offered to pay the balance amount of Rs.1,57,500/-, the same was not accepted. On 9-1-1998 the accused as third party deposited a sum of Rs.2,10,000/- which was handed over to the Decree Holder, Pantaleao Pinto, and thereafter the said auction purchaser was paid Rs.11,000/- which was earlier deposited on 5-1-1998 by the accused, as third party, and, on 16-1-1998 the auction purchaser withdrew 25% of the amount deposited by him on 15-12-1997 i.e. Rs.52,500/- and on 12-11-1998 Execution Application was dismissed as withdrawn at the instance of the Decree Holder.
13. The statement of the accused was recorded by the trial Court on 19-8-2002 and in answer to Question No.6 the accused stated that he had got the property of the complainant on auction on 9-1-1998 after he paid an auction price of Rs.2,11,000/- and that in the light of the said auction he had become the exclusive owner of the property. Admittedly, the accused did not have the Sale Certificate in his hands on that date nor on 23-8-2002 when the defence evidence was initially closed after examination of DW-1. The accused filed an application only on 11-11-2002 to obtain Sale Certificate in the said Execution Proceedings, which were dismissed as withdrawn and the learned Civil Judge, Senior Division was pleased to issue the said certificate on 11-12-2002 (but dated 13-12-2002) which the accused produced along with an application, dated 31-7-2004. The records and proceedings do not show that an auction was held on 9-1-1998 as stated by the accused in his statement under Section 313 of the Code or as stated on the Sale Certificate dated 13-12-2002. It is therefore obvious that the Sale Certificate which has been issued to the accused after the Execution Proceedings were closed and without notice to any of the parties in the said Execution Proceedings appears to be a product of fraud. In any event, it may be observed that the accused who had to pay a balance amount of Rs.13,00,000/- as per the said agreement dated 29-3-1997 between the complainant and the accused could not have got the property by paying a sum of Rs.2,21,000/- to the Decree Holder Pantaleao Pinto in the said Execution Proceedings. It appears that the said highest bidder also did not pursue the Execution Proceedings after 16-1-1998 and before the proceedings were closed on 12-11-1998.
14. Reverting to the third submission of the learned Counsel on behalf of the accused, in my view, it is not necessary to refer to in detail to the two decisions cited on his behalf in the case of Ramanujulu Naidu Vs. Gajaraja Ammal (AIR(37) 1950 Madras 146) and Tarsem Singh Vs. Sukhminder Singh ((1998)3 SCC 471 : 1998(2) ALL MR 528 (S.C.)) as they are inapplicable to the facts of the case. In the first case, it was held that when mortgage was the consideration for sale and it was found that the vendor had no real title to the property the mortgage was devoid of consideration. The second case was in relation to a mistake of fact in that one party understood the property to be sold in terms of bighas and the other party in terms of kanals and the Apex Court held that since the said units related to the area of the land to be sold, the area to be sold was in dispute and since it was a mistake in relation to a matter essential to the agreement, the agreement was void.
15. From the facts stated herein above it is crystal clear that the property, the subject matter of the agreement between the parties was not attached either in accordance with the Order of the learned Civil Judge, Senior Division dated 27-4-1996 or in terms of the first part of Sub-Rule 2 of R.54, O.21, C.P.C. This Court in the case of Chandrakant Ganpat Sovitkar Vs. State of Maharashtra (supra) had occasion to refer to the decision of the Privy Council in A.T.K.P.L.M. Muthiah Chetti Vs. Palaniappa Chetti (AIR 1928 PC 139). The Privy Council after taking into consideration the provisions of O.21, R.54, C.P.C., 1908 had observed that the order is one thing and the attachment is another. No property can be declared to be attached unless first the order for attachment has been issued and secondly in execution of that order, the other things prescribed by the rules in the Code have been done. This Court also referred to another decision of a Division Bench of this Court in Mahadev Vasudeo Vs. Janaksingh Saigal (AIR 1954 Bom. 251) and observed that the learned Division Bench of this Court had reiterated the same view, as that of the Privy Council. This Court noted that from the language of O.21, R.54, C.P.C., that the conditions for attachment of immovable property are mandatory in nature and, therefore, it is necessary for the attachment to be effective, the strict compliance is very much necessary. If the mandatory conditions are not complied with, there is no attachment in the eyes of law. Reverting to the facts of the case, I have already noted that the property surveyed under No.19/2 was not at all attached either as required by the Order dated 24-7-1996 of the learned Civil Judge, Senior Division in the said Execution Proceedings or in accordance with the first part of Sub-Rule 2 of R.54, O.21, C.P.C. and being so there was no attachment in the eyes of law which could have come in between the complainant and the accused at the time of execution of the said agreement dated 29-3-1997. The complainant and the accused were therefore absolutely free, with no legal hurdle in their way to have entered into the said agreement. It was pointed out at the time of arguments that the accused was in occupation of the said property, the subject matter of the said agreement, even prior to execution of the said agreement and since then the accused had constructed about 16 bungalows and about 3000 sq. meters are otherwise still available for further development. This position is also clear from the cross-examination of the complainant wherein it was suggested to the complainant that the complainant had not objected to the development and the accused had developed the property as per agreement. Since there was no attachment in the eyes of law, there was no hurdle in the way of the complainant and the accused to have entered into the said agreement. In such a situation, the third contention that the agreement dated 29-3-1997 was void and therefore not enforceable in law and on that count there was no legally enforceable debt, deserves to be rejected. Considering the facts narrated herein above, there is no scope at all for the accused to invoke the provisions of Section 20 of the Indian Contract Act. It appears that before the first appellate Court, on behalf of the accused, it was contended that the said agreement was voidable, because the complainant had not disclosed that the property was attached and the learned Sessions Judge had observed, and in my view rightly, that the accused had neither terminated the agreement nor challenged the validity of the agreement and on the contrary it was suggested to the complainant that the accused had developed the property as per the terms and conditions of the agreement and the suggestion put to the complainant indicated that the agreement had been acted upon and therefore the accused cannot be allowed to disown his liability on the ground that the agreement is voidable. It appears that the accused has taken recourse to Section 20 of the Indian Contract Act as a last resort with a view to avoid his liability to pay to the complainant the said amount of Rs.13,00,000/- for which the accused had issued the said cheque and which was dishonoured by the Bank because of insufficiency of funds. Even if the subject cheque was issued by the accused after his intimation to the Bank not to honour the same, the accused would be still liable on the same in the light of what has been stated by the Supreme Court in the case of Goa Plast Pvt. Ltd. Vs. Shri. Chico Ursula D'Souza and another (2004(2) SCC 235 : [2003(2) ALL MR 750 (S.C.)]). There is absolutely no merit in this revision petition and the same is hereby dismissed.
16. A disturbing feature of this case is that it has taken unnecessarily long to be decided. This aspect was taken note of by the learned J.M.F.C. in her Order dated 26-6-2003 by which she had disallowed DW2 to be summoned. The complaint was filed on 12-10-2000. The statement of the accused was recorded on 19-8-2002 and the defence evidence was closed on 23-8-2002 for the first time and the case was posted for arguments on 27-9-2002 and for Judgment on 1-11-2002. It is only on 14-11-2002 that the accused filed an application to produce the said Sale Certificate which was dismissed by Order dated 26-6-2003 against which the accused filed a revision application which was allowed by Order dated 12-2-2004 of the learned Additional Sessions Judge, Panaji in Criminal Revision Application No.70/2003. The learned Additional Sessions Judge held that the Order dated 26-6-2003 of the learned J.M.F.C. sought to deny an opportunity to the accused to prove his defence, without considering that the accused had sufficient opportunity from 19-8-2002 to have produced whatever documents were then available in the said Execution Proceedings.
17. The learned Sessions Judge took another five months from the date of completion of the arguments to pronounce Judgment and dispose of the appeal. A Division Bench of this Court in the case of K.S.L. and Industries Ltd. and others Vs. Mannalal Khandelwal and another Vijaya Agarwal and others ((2005)1 Bom.C.R. (Cri.) 520 : 2005(2) ALL MR 581 : 2005 ALL MR (Cri) 1105) has directed that the trial of complaint cases under Section 138 of the Act be continued from day to day until its conclusion. The learned Division Bench has also directed that the complaints must be disposed of as expeditiously as possible and in any event, within six months from the date when the presence of the accused has been secured and in case the concerned Judicial Officer is not able to dispose of the complaint within six months, then the concerned Judicial Officer must submit a report to the concerned Sessions Judge indicating the reasons which led to delay in disposal of the complaint and the report submitted by the concerned Judicial Officer shall be taken into consideration while evaluating the performance of the concerned Judicial Officer. Nothing is said about the Sessions Judges themselves as to whom they should report in cases of delay on their part. This aspect is taken care of now by directions issued by this Court in Writ Petition No.281/2006 in the case of Pradeep Sangodkar Vs. State of Goa and another by Judgment dated 24-8-2006. It is hoped that all the Judicial Officers shall carry out the said directions scrupulously. A copy of the said Judgment be sent to both the District & Sessions Judges, in the State of Goa.
18. Another disturbing feature is the manner in which the Sale Certificate was obtained. The Execution Proceedings were dismissed as withdrawn and closed on 12-11-1998 and yet the accused, as third party, managed to obtain a Sale Certificate in his favour by making an application four years later i.e. on 11-11-2002 stating that an auction was held on 9-1-1998 when records show that no such auction was ever held in the said Execution Proceedings on that date. Prima facie, it appears that the said certificate was fraudulently obtained as this aspect was argued before the Courts below. The learned District Judge therefore is hereby directed to conduct an inquiry and take/initiate appropriate action against all those who are parties for the issuance of the said Sale Certificate. Inquiry be completed within a period of six months and action taken/recommended be informed to this Court. The Bail Bonds executed by the accused are cancelled. The accused to surrender before the learned J.M.F.C., Mapusa within a period of one week to undergo the sentence.