Judgment:
A.S. Naidu, J.
1. The order of conviction and sentence passed by learned S.D.J.M., Rairangpur in I.C.C. No. 39/1992 which was confirmed by learned Addl. Sessions Judge, Rairangpur in Crl. Appeal No. 116/92 of 1997-95 is assailed in this Crl. Revision invoking inherent jurisdiction of this Court under Section 397 read with Section 401 of the Cr.P.C.
2. Opp.party No. 1 filed a complaint petition, inter alia, alleging commission of offences under Section 138 of the Negotiable Instruments Act and the said complaint petition was registered as I.C.C. No. 39/92 in the Court of S.D.J.M., Rairangpur. It was alleged that a cheque issued by the petitioner for an amount of Rs. 14,000/- payable at Canara Bank, Telegaon Branch when tendered bounced on 26.6.1992 with an endorsement 'insufficient funds in the account'. It was averred in the complaint petition that a lawyer's notice was issued by registered post to the petitioner, but then the same returned to the complainant with an endorsement that the addressee was absent for six to seven days. Thereafter after waiting for the statutory period, the complaint petition was filed.
3. The plea of the petitioner was complete denial.
4. The prosecution in order to substantiate its case got examined three witnesses and exhibited four documents. The petitioner got himself examined as D.W.1. The trial Court after discussing the evidence of P.Ws.1 to 3 came to the conclusion that the petitioner had issued the cheque in favour of the complainant on 10.3.1992 and the said cheque when presented returned unpaid by the Bank due to insufficiency of funds in the account of the petitioner. On the basis of such conclusion the petitioner was found guilty for commission of offence under Section 138 of the N.I. Act and was convicted. The trial sentenced the petitioner to undergo S.I. for a period of six months and to pay a fine of Rs. 500/-, in default to undergo S.I. for a period of one month.
5. Being aggrieved the petitioner preferred Criminal Appeal No. 116/ 92 of 1997-95 which was heard by the learned Addl. Sessions Judge, Rairangpur. The appellate Court also after discussing the evidence, both oral and documentary, found no error apparent on the judgment of the trial Court, confirmed the order of conviction and sentence an dismissed the appeal. Consequently the present revision has been filed.
6. The main ground on which the order of conviction and sentence is assailed is that the complainant has not proved the service of notice as contemplated under Section 138 of the N.I. Act and as such an offence under the said Section cannot said to have been committed. Relying upon Section 138(b), it is argued that the said section casts a mandate upon the holder of the cheque to serve notice in writing to the drawer of the cheque before approaching the Court. According to Mr. Das, learned Counsel for the petitioner, no materials were produced before the Court below to establish that the notice which was mandatorily required to be issued had been served on the petitioner. In absence of such materials, the complaint petition itself was not maintainable and it is a fit case where the order of conviction and sentence should be set aside.
7. The notice of this Crl. Revision was duly issued to opp.party No. 1, but then he refused to accept the same as would be evident from postal endorsement as well as peon's report and the same was treated to be sufficient. No counsel also appeared on behalf of opp.party No. 1, before this Court.
8. The sole question which needs to be determined in this case is as to whether a proceeding under Section 138 of the N.I. Act can be maintained in absence of service of notice as contemplated under Section 138(b) of the N.I. Act. For appreciating the said position, it would be prudent to refer to Section 138 of the Act reads as follows:
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.
Explanation- For the purpose of this section, debt or other liability means a legally enforceable debt or other liability.
Thus sine-qua-non for filing a complaint petition is issuance of a notice in writing to the drawer regarding the return of the cheque and service of the same.
9. According to the complainant the cheque issued by the petitioner bounced as sufficient funds were not available in the account and the said fact was intimated to the complainant. It is also submitted that the complainant on receiving such intimation issued a registered notice to the petitioner, but then as would be evident from Exts.3 and 3/1, the notice returned back to the sender with an endorsement of the Postal Department that the petitioner was absent for 6 to 7 days. Relying upon such endorsement, Mr. Das, learned Counsel for the petitioner, submitted that, admittedly notice was not served upon the petitioner. It is further forcefully submitted that there was no material available before the Court nor any iota of evidence either oral or documentary was adduced to lead to a conclusion that the petitioner at any time was avoiding to receive the notice.
10. In the case in hand, however, neither there is any pleading nor there is any evidence to reveal or to come to a conclusion that the drawer had adopted any dubious means and managed to get an incorrect endorsement. Thus, the facts of the present case is completely different from the facts in the case of D. Vinod Shivappa (supra) and the said decision shall not be applicable to the present case.
11. A combined reading of Sub-sections (b) and (c) of Section 138 of the N.I. Act would lead to an irresistible conclusion that the cause of action for filing a complaint under Section 138 of the N.I. Act would arise only after making the demand to the drawer claiming the amount to be paid by giving a notice in writing within 15 days from the date of receipt of the intimation from the Bank regarding dishonour of the cheque. In absence of such notice, as would be evident from the section, there may be no valid demand and the cause of action may not arise for the offence in consonance with law.
12. In touch stone of the aforesaid principles of law, if we examine the facts of the case at hand, it would be evident that though a registered notice as contemplated under Section 138 of the N.I. Act was issued, the same was not served upon the petitioner and returned with an endorsement that he was absent for 6 to 7 days. It is also not the case of the complainant, that the petitioner is intentionally avoiding to receive the notice and/or the address given was fictitious. Thus it is apparent that no notice was served upon the petitioner as mandatorily required under Sub-sections (b) and (c) of Section 138 of the N.I. Act which would mean that no demand has been made within 15 days from the date of dishonour of cheque in question. In other words, the mandates inbuilt in Section 138 of the N.I. Act have not been complied with. This aspect was not kept in mind either by the trial Court or by learned appellate Court.
13. In the case of D. Vinod Shivappa v. Nanda Belliappa, reported in : (2006) 6 SCC 456 : 2006 (II) OLR (SC) 265, the Supreme Court observed as follows:
We cannot also lose sight of the fact that the drawer may by dubious means manage to get an incorrect endorsement made on the envelope that the premises has been found locked or that the addressee was not available at the time when postman went for delivery of the letter. It may be that the address is correct and even the addressee is available but a wrong endorsement is manipulated by the addressee. In such a case, if the facts are proved, it may amount to refusal of the notice. If the complainant is able to prove that the drawer of the cheque knew about the notice and deliberately evaded service and got a false endorsement made only to defeat the process of law, the Court shall presume service of notice. This, however, is a matter of evidence and proof. Thus even in a case where the notice is returned with the endorsement that the premises has always been found locked or the addressee was not available at the time of postal delivery, it will be open to the complainant to prove at the trial by evidence that the endorsement is not correct and that the addressee, namely, the drawer of the cheque, with knowledge of the notice had deliberately avoided to receive notice. Therefore, it would be premature at the stage of issuance of process, to move the High Court for quashing of the proceeding under Section 482 of the Code of Criminal Procedure. The question as to whether the service of notice has been fraudulently refused by unscrupulous means is a question of fact to be decided on the basis of evidence. In such a case the High Court ought not to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure.
14. A similar matter came before the Andhra Pradesh High Court in the case of A. Sudershan v. Manner (Shabir) and Anr. reported in 1998 Bank. J. 120. In the said case also service of notice of dishonour of cheque sent by registered post returned back unserved with an endorsement 'party continuously absent for 7 days.' Interpreting Clauses (b) and (c) of Section 138 of the N.I. Act it was held that unless a notice in writing is received by the drawer of such cheque the offence would not be constituted. Therefore, the receipt of notice is absolutely necessary as a precondition for constituting such an offence. The act of giving a notice contemplated by Section 138 of the N.I. Act means actually serving the notice in terms of Section 27 of the General Clauses Act, 1897. In other words, if there is any ambiguity regarding what constitutes service of notice under Section 138 of the N.I. Act, unless Court is satisfied that the accused is intentionally avoiding to receive the notice, it must hold that due to non-service of the notice on the petitioner in terms of Clauses (b) and (c) of Section 138 of the N.I. Act an offence under that Section is not constituted and the complaint petition is liable to be dismissed. It appears from the judgment that both the Courts below have observed that notice issued by registered post returned unserved with an endorsement that the petitioner was absent for 6 to 7 days. No materials were produced before the Courts below that any endeavourance was made by the complainant to send the notice once again. There is also no finding that the accused-petitioner is intentionally avoiding to receive the notice. In the absence of such finding the order of conviction and sentence cannot be sustained.
15. In the aforesaid scenario, I am of the firm view that conviction and sentence recorded against the petitioner cannot be sustained. In the result, this Revision Petition stands allowed and consequently the conviction and order of sentence recorded by the lower appellate Court confirming the findings of the learned Magistrate in I.C.C. No. 39 of 1992 is set aside and the accused is acquitted and set free.