1. This is an appeal against acquittal. The accused-respondent was acquitted by the learned IX Additional Chief Metropolitan Magistrate, Bangalore City in C.C. No. 20696 of 1994 by his order dated 6-9-1995 for an offence under Section 138 of the Negotiable Instruments Act.
2. The appellant (hereinafter referred to as the complainant) filed a complaint under Section 200 of the Criminal Procedure Code alleging that the respondent (hereinafter referred to as the accused) had committed an offence punishable under Section 138 of the Negotiable Instruments Act.
3. The facts, in brief, are that the accused was the proprietor of M/s. Apoorva Steel and Alloys company. The accused has been purchasing M.S. Steel from the complainant on a regular basis. The complainant raised a bill No. 1557 (Ex. P-1) dated 7-4-1993 for a sum of Rs. 1,44,435/-. The complainant in his complaint stated that towards part payment of the said bill the accused had issued a cheque (Ex. P-2) for Rs. 1,00,000/-drawn on Vysya Bank, V.V. Puram, Bangalore, dated 17-5-1993 in favour of the complainant. The complainant presented the said cheque to his bankers for collection on 10-6-1993 and the same was dishonoured with the bank endorsement 'insufficient fund'. The dishonoured cheque was received by the complainant on 30-6-1993. Within fifteen days the complainant issued notice to the accused dated 14-7-1993. The said notice was returned with an endorsement 'not claimed' on 24-7-1993. The complainant waited for fifteen days and filed the complaint within the stipulated time on 10-8-1993.
4. The Trial Court acquitted the accused on the ground that the complainant had not produced any document to show that he was the proprietor of the said Corporation. The observation of the Trial Court was 'that at any rate the complainant, who is alleged to be the proprietor of the company has not filed any documents to show that he is the proprietor'. It was further observed by the Trial Court that although the complainant admitted in his evidence that he is an assessee of Sales Tax and Income Tax and was paying Professional Tax, he had not produced any documents to show that he is the proprietor concern. Curiously the Trial Court relied on the averments in the notice Ex. P-5 where the words used were 'we hereby demand you for the payment'. The Trial Court held that since the complainant himself refers to the word 'we', the complainant is only a partnership firm and not a proprietorship concern. The second ground on which the accused was acquitted was that the cheque was dishonoured on 11-6-1993 and the endorsement of the banker was received on 30-6-1993. The Trial Court disbelieves Ex. P-4 had been delivered to the complainant only on 30-6-1993. I have carefully perused the endorsement of the banker in Ex. P-3. The endorsement on the reverse states delivered on 30-6-1993. It also bears the stamp of the Bank of Maharashtra and the signature of the manager of the Gandhinagar Branch. The Trial Court observes 'but it cannot besaid that the endorsement Ex. P-4 has been delivered to the complainant on 30-6-1993'. The Trial Court does not give any reason whatsoever as to why the date and the stamp of the bank and the signature of the manager has to be disbelieved.
If the Trial Court had perused the endorsement Ex. P-4 it would have been abundantly clear that the endorsement clearly states 'delivered on 30-6-1993' with the stamp of the bank and the branch and the signature of the Branch Manager.
5. The next ground on which the Trial Court has acquitted the accused was the unclaimed cover was returned to the sender on 24-7-1993. According to the Trial Court, the date on the returned cover sent to the accused bears 24-7-1993. There appears to be some endorsement on the front of the cover though not legible showing it as 26-7-1993. Therefore, the Trial Court comes to the conclusion that the complaint was premature as 15 days had not elapsed. However, if the endorsement on the cover Ex. P-6 is to be taken into account, it clearly shows 'Not claimed. Returned to the sender on 24-7-1993'. It also bears the signature of the Post Master. Instead of relying on 24-7-1993, the Trial Court relied on an endorsement in the front of the cover as 26-7-1993. Even that is far from legible and does not bear the initials or signature of the Postman. The back of the cover dated 24-7-1993 bears the signature of the Post Master. If 24-7-1993 is taken into account, the complaint given by the complainant will not be premature.
6. Another curious aspect of this case is the observation of the Trial Court that the said cheque is not mentioned in the invoice and that the complainant has not filed any civil suit for recovery of the balance amount. The Trail Court was also pleased to acquit the accused on the ground that no civil suit was filed for the said amount. The grounds of acquittal are briefly as follows:--
(i)In the notice by the complainant the word 'we' is used instead of 'I'. Therefore, the complainant is not a proprietor;
(ii)The endorsement by the bankers cannot be believed;
(iii)The complaint is premature.
7. It defies logic how the learned Judge in this case has totally lost sight of the provisions of Section 138 of the Negotiable Instruments Act. Section 138 of the Negotiable Instruments Act reads as follows:--
'138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this Section shall apply unless.-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 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'.
Section 139 of the Negotiable Instruments Act reads as follows:--
'139. Presumption in favour of holder.--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability'.
8. In this case, the accused issued the cheque dated 17-5-1993. The complainant sent the cheque for collection through their bankers. The said cheque was returned dishonoured with an endorsement 'insufficient funds' on 30-6-1993. A notice of dishonour was issued by the complainant on 14-7-1993 within the stipulated time.
9. The notice was returned with an endorsement 'not claimed' on 24-7-1993. The complainant waited for 15 days and filed the complaint on 10-8-1993. On perusal of the dates and the endorsements, it is abundantly clear that the complainant has complied with all the requirements of law under Section 138 of the Act.
10. The only point for consideration in this case which required some discussion was with respect to the endorsement by the Postal Authorities stating 'not claimed' on 24-7-1993.
11. The learned Counsel for the respondent/accused Mr. Acharya relied on the proviso to Section 138. Section 138(c) reads as follows:--
'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'.
He strenuously submitted that an endorsement such as 'not claimed' cannot be treated as receipt of the said notice. This submission would have been available to the accused if the accused had either got into the witness box and stated that he had changed his address and therefore was not able to receive the notice or if he had cross-examined the complainant with the suggestion that he had not received the notice for reasons beyond his control. If no such material is before the Court, it would be practically impossible for any complaint to be filed under Section 138 of the Act if the accused were to allow the Postal Authorities to make an endorsement as 'not received'. Then the whole exercise contemplated under Section 138 would become futile. There must be some materials placed before the Court that the accused did not receive the notice either by way of suggestion in the cross-examination of the complainant or by the accused himself giving evidence in the Court. In this case, admittedly, the accused did not get into the box. Neither was there any cross-examination to suggest that the accused did not evade notice.
12. Since we are dealing with an appeal against acquittal, it would be necessary to extract the cross-examination of the complainant in this case in toto.
'I have not produced any documents to show that I am the Proprietor of M/s. Metalloy-N-Steel Corporation. It is not correct to say the said Corporation is a partnership concern. The accused has not paid the remaining amount of the Bill Ex. P-1. I am a sale tax assessee. I have furnished the particulars in Form 3 about this transaction. It is not correct to say that I have not received Ex. P-4 on 30-6-1993. I am an income tax assessee. I have shown in my income-tax returns about this transaction. It is not correct to say the accused is not liable to pay any amount and I have filed a false case against the accused. It is not correct to say I myself approached the accused for loan and in that connection the accused has given the cheque Ex. P-2 to me'.
13. The cross-examination of the complainant is totally bereft of any suggestion that the accused did not receive the notice because he had changed his address or for reasons beyond his control.
The learned Counsel for the appellant relied on a judgment in Rakesh Nemkumar Porwal v Narayan Dhondu Joglekar and Another. The Bombay High Court at paragraph 18 of the judgment has held as follows.--
'A clear reading of Section 138 leaves no doubt in our mind that the circumstances under which such dishonour takes place are required to be totally ignored. In this case, the law only takes note of the fact that the payment has not been forthcoming and it matters little that any of the manifold reasons may have caused that situation. If, for instance, the closure of an account or the stoppage of payment of any other of the common place reasons fordishonour were to be justifiable, then, the legislature would have set these out in the Section as exceptions not constituting an offence. No such intention can be read into Section 138, as none exists. The solitary exception made by the Legislature is with regard to the drawer being offered a final opportunity of paying up the amount within 15 days from the receipt of notice which, in other words, provides a last opportunity to prove one's bona fides. It is obvious, that having regard to the widespread practice of issuing cheques which are dishonoured and the many ingenious methods of avoiding payment that are practiced, that the legislature has opted for a no nonsense situation. The possibility has not been overlooked whereby an account may inadvertently be overdrawn or a dishonour may be for technical reasons or where a genuine mistake has occurred and the grace period provided for by the legislature after service of notice on the drawer is in order to afford an opportunity to the drawer to rectify these. Undoubtedly, even when the dishonour has taken place due to the dishonesty of the depositor, the drawer is still given a last chance to act otherwise. Consequently, the reasons for dishonour even if they be very valid as was sought to be pointed out in this case, should not and cannot be taken into account by a Magistrate when such a complaint is presented'.
The learned Counsel for the appellant has also relied on the judgment inState of Madhya Pradesh v Hiralal and Others, wherein the Supreme Court has held that if a service is through post and if there is an endorsement 'not available in the house', 'house locked' and 'shop closed', in these circumstances, it has to be held that the notice is deemed to have been served on the accused.
14. The learned Counsel for the respondent-accused relied on a judgment in Sosamma v Rajendran. The learned Single Judge of the Kerala High Court at para 9 held as follows:--
'Now, it is necessary to see whether a notice when returned with the endorsement 'unclaimed' would be sufficient service for the purpose of Section 138 of the Act. There may be cases where notice is returned unclaimed on account of the deliberate evasion by the accused when the same was tendered by the postman. With due regard to the principles laid down in Wazir, Jaivir Chand's case, supra, where it is proved that, the notice was returned 'un-claimed' due to the evasion by the accused when tendered at the correct address that can be treated as service. The general burden to prove the prosecution case, since rests with the complainant, it is necessary for the complainant to prove the facts constituting the sending of notice and its receipt. The tender of the notice by the postal peon at the address of the accused has to be proved and the same could not be actually served due to theculpable default or deliberate evasion of the accused, then the same would constitute 'receipt' of notice. The burden to establish those facts rests with the complainant'.
15. In Criminal Law case laws guide us to correctly interpret the provision of the Section and to understand the proposition of law. However, each proposition of law has to relate to the facts and circumstances of each case.
16. When an endorsement is made to the effect 'not served', there should have been some material before the Court to show that it was not served for no fault of the accused. The last sentence in the suggestion while cross-examining the complainant reads as follows:--
'It is not correct to say I myself approached the accused for loan and in that connection the accused has given the cheque Ex. P-2 tome'.
As I understand the suggestion is to the effect that the complainant approached the accused for a loan and the accused gave a cheque Ex. P-2 to the complainant. Therefore, the accused has not denied that a cheque was given for a loan. Apart from this, there is nothing in the cross-examination of the complainant.
17. The complainant has clearly complied with Section 138 of the Act and the learned Judge has completely lost sight of the provisions of the Act and the evidence before the Court.
18. It is well-settled law that in an appeal against acquittal the Court will not interfere with the order of acquittal unless for compelling and overwhelming reasons. If two views are possible, the benefit of doubt must go to the accused.
19. In this case, I have no hesitation to hold that the Trial Court in the facts and circumstances of the case has committed grave error in acquitting the accused. I, therefore, hold that the accused is guilty of an offence under Section 138 of the Negotiable Instruments Act. Since this is an appeal against acquittal, the accused was heard on the question of sentence. It was submitted that the accused is the business man and grave prejudice will be caused to his reputation if he is sent to jail.
20. In these circumstances, I propose to take a lenient view in this matter. I hereby sentence the accused to remain in the Trial Court till rising of the Court and the accused shall be present in the Trial Court on 28th November, 1997 from 11 a.m. till rising of the Court. I also sentence the accused to pay a fine of Rs. 1,25,000/- in default to undergo S.I. for six months since the value of the cheque is Rs. 1,00,000/- and the occurrence is alleged to have been taken place in the year 1993. Since the complainant has lost interest on the amount I direct the Trial Court to disburse the amount to the complainant as compensation. The accused shall pay the said sum of Rs. 1,25,000/- in the Trial Court within four weeks from the date of receipt of this order, failing which the accused will suffer the default sentence. The appeal is allowed accordingly.