Arun Kumar Sharma vs State Of U.P. & Another
2014 Latest Caselaw 1706 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

    								         Court No. - 53										                AFR	                           
 

 
         Criminal Misc. APPLICATION  No. - 6825 of 2003
 

 
          Arun Kumar Sharma...................................Applicant
 
					              Versus
 
	  State Of U.P. & Another........................... Respondents
 

 
Hon'ble Vinod Prasad, J.

Solitary applicant Arun Kumar Sharma, by invoking inherent power of this court under Section 482 Cr.P.C. has prayed though this Application to quash entire proceedings of complaint case no.1748/9 of 2002, Ramveer Vs. Arun Kumar pending before C.J.M., Muzaffarnagar u/s 138 N.I. Act against him.

In the revised list, counsel for the applicant is not present. Sri Pankaj Bharti, learned counsel for the respondent no.2 as well as learned AGA for the State are present. This application was filed eleven years ago and therefore cannot be kept alive in the dockets of this court un-disposed off for infinity and hence in the revised list with the help of counsel for the respondents it is being disposed off by this judgment.

I have vetted through the record carefully and have critically examined facts and legal aspects.

The record reveals that present application relates with a proceeding under section 138 N.I. Act. Pleadings slated in the affidavit appended alongwith this application indicates that a complaint u/s 138 N.I. Act was filed by Ram Veer Singh, respondent no.2/complainant against the applicant before CJM, Muzzaffarnagar, on 30.4.2002, alleging therein that the applicant accused is a contractor in MTNL Delhi under the name and style Arun Kumar Sharma & Co. He resides in a joint family at 208/45, South Krishnapuri, P.S. Kotwali, District Muzzaffarnagar and all the correspondences in his name are received by his family members also who reside with him and the applicant replies to those correspondences. Since last four years complainant had money transactions with the applicant accused and in that process complainant has advanced Rs.75000/= to the applicant to be re-payed within a month. Applicant accused for such repayment had issued cheque no. 001454, of Vijaya bank, Vigyan Vihar, Delhi- 110092, dated 11.3.2002. Complainant/ respondent no.2 deposited that cheque in Union Bank Of India, Prempuri branch for encashment on the same day but the bank dishonored the cheque with endorsement no. 26 "funds insufficient" vide bank's memo dated 21.3.2002,which was received to the complainant the same day. Inspite of repeated demands thereafter the money was not returned and therefore the complainant gave statutory notice u/s 138 N.I.ACT(herein after referred to as the Act), vide annexure no. 4, to the accused applicant on 1.4.2002 which was received on behalf of the applicant accused by his brother vide annexure no.3.Inspite of gaining knowledge of demand notice no payment was reimbursed to the complainant by the accused applicant and therefore complainant respondent lodged the complaint on 30.4.2002, annexure no. 2A in the court CJM, Muzzafarnagar as complainant case no. 1748/9 of 2002, RamVeer Singh versus Arun Kumar, u/s 138 N.I. Act.

Statement of the complainant is annexure no. 5 and that of his witness Ejaj Khan is annexure no.6. Summoning order of the applicant dated 24.8.2002 u/s 138 of the Act is annexure no. 7. Applicant lodged a protest application on 8.4.2003, against the summoning order vide annexure no.8 but vide order dated 19.7.2003, annexure no.9, the same was rejected by the learned CJM, Muzzafarnagar. Hence this Application u/s 482 of the Code to get entire proceedings of the aforesaid case quashed.

It is in the backdrop of aforesaid facts that this Application is being disposed off with the help of counsel for the respondents.

The contention of the applicant mentioned in this application is that demand notice u/s 138 of the Act was never served on the applicant and instead, admittedly, his brother has received that notice and hence there is no compliance of mandatory provision of section 138 (b) and (c) of the Act and on this score alone the prosecution of the applicant deserves to be quashed. Another grounds which can be culled out is that the applicant being a businessman has to make frequent travels outside Delhi and for his wife he had left many blank signed cheques which got misplaced by the wife regarding which accused applicant had filed a complaint with the police also on 27.3.2002 at P.S. Shakarpur Delhi vide annexure no.1 and opposite party no. 2 got the misplaced cheque no. 001454 and after getting it dishonored has filed the complaint. Copy of cheque is annexure no. 2. Since applicant accused had no transaction with complainant therefore his prosecution be quashed.

Both the counsel for the respondents refuting the grounds taken in this Application urged that entire pleadings in this Application is based on defence of the applicant based on seriously disputed questions of fact and therefore, by considering them, a legitimately instituted prosecution u/s 138 N.I. Act can not be quashed. Entire defence of the applicant requires to be established at the proper stage in the trial and this Application sans merits and be dismissed. Both the sides have to be afforded full and sufficient opportunity to establish their allegations and on disputed questions of facts applicant's prosecution cannot be quashed, especially when there is a presumption of liability u/s 139 of the Act and that can be rebutted only at the proper stage of trial by tendering legally admissible evidences submitted respondents counsel. In any case applicant has to prove that in spite of service of notice on his brother, he had never gained any knowledge of notice. Service of notice is only to intimate the drawer of the cheque that his cheque has bounced and he has to make good the payment of the bounced cheque amount within fifteen days of the receipt of the notice of demand.

Having vetted through the record and having considered respondents arguments, I find this application to be devoid of any substance and meritless which deserved to be dismissed. So far as defence of the applicant regarding handing over of signed cheque to his wife and loosing of the same are concerned it cannot be considered at this stage nor can it be taken to be a truthful version unless established during the trial by reliable evidences. Defence of accused cannot be considered at the very inception of the trial to scuttle down a legitimate prosecution. Access to justice cannot be denied to the victim by inventing a nascent procedure against all canons of common sense. Why singed cheques were left with the wife, when it were lost, where it was misplaced all these aspects have to judged by the trial court and not by this court on affidavits, under section 482 of the Code. Presumption u/s 139 of the Act has to be rebutted during the trial and therefore pleading on the said score is of no help to the applicant accused.

Coming to the more relevant and germane aspect regarding service of notice on the applicant is concerned, I am of the view that notice is required to be served only as an intimation to the drawer of the cheque that his instrument has been dishonored by the bank for insufficiency of funds and therefore he has to make good the payment of the cheque amount within fifteen days of the service of notice. Section 138 has been enacted to repose public confidence in banking system and therefore sections of the Act has to be interpreted in a manner which unambiguously fosters legislative intent. On the part of the drawee, it is sufficient that he serves a written notice of demand on the correct name and address of the drawer making demand of payment of bounced cheque amount within fifteen days(now thirty days, w.e.f. 6.2.2003). It is also to protect an honest drawer of cheque to rectify his omission. Apex court in Central Bank of India and another versus M/s. Saxons Farms and others:AIR 1999 SC 3607 has held as under:-

"8. The object of notice is to give a chance to the drawer of the cheque to rectify his omission and also to protect honest drawer...."

This observation by the apex court has been referred to with approval in Suman Sethi Versus Ajay K. Churiwal: AIR 2000 SC 828 and also in M. Chandrashekar Rao v. V. Kutamba Rao and Anr:2006 CR.L.J.1399 . Thus so far as holder of cheque in due course/ drawee is concerned it is sufficient for him to dispatch notice to the drawer by his name at his correct address.

Now coming to the service of notice, if the notice has been dispatched as aforesaid it will have to be presumed that the drawer of the cheque has received the notice and his liability to comply with the demand notice commences. Requirement of law is that payee or holder in due course must make a demand for payment of cheque amount by giving a written notice to the payer at his correct address and nothing more. Any further interpretation of the proviso(b) & (c) to section 138 of the Act to add in it proof of receiving of notice personally by the drawer will give a long rope to a trickster to avoid service of notice and thereby deprive the loser/ drawee of his rightful claim. As Maxwell has put it provisions of giving notice has to be given a liberal interpretation. In C.C. Alavi Haji v. Palapetty Muhammed: (2007) 6 SCC 555 Apex court has dealt with this contentious aspect very succinctly as under:-

"13. According to Section 114 of the Act, read with Illustration (f) thereunder, when it appears to the court that the common course of business renders it probable that a thing would happen, the court may draw presumption that the thing would have happened, unless there are circumstances in a particular case to show that the common course of business was not followed. Thus, Section 114 enables the court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. Consequently, the court can presume that the common course of business has been followed in particular cases. When applied to communications sent by post, Section 114 enables the court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. But the presumption that is raised under Section 27 of the GC Act is a far stronger presumption. Further, while Section 114 of the Evidence Act refers to a general presumption, Section 27 refers to a specific presumption. For the sake of ready reference, Section 27 of the GC Act is extracted below:

"27. Meaning of service by post.--Where any Central Act or Regulation made after the commencement of this Act authorises 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, then, 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.

14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station", due service has to be presumed. (Vide Jagdish Singh v. Natthu Singh; State of M.P. v. Hiralal and V. Raja Kumari v. P. Subbarama Naidu.) It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved.

15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the court to draw presumption or inference either under Section 27 of the GC Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque. It is well settled that at the time of taking cognizance of the complaint under Section 138 of the Act, the court is required to be prima facie satisfied that a case under the said section is made out and the aforenoted mandatory statutory procedural requirements have been complied with. It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In our opinion, this interpretation of the provision would effectuate the object and purpose for which proviso to Section 138 was enacted, namely, to avoid unnecessary hardship to an honest drawer of a cheque and to provide him an opportunity to make amends.

16. As noticed above, the entire purpose of requiring a notice is to give an opportunity to the drawer to pay the cheque amount within 15 days of service of notice and thereby free himself from the penal consequences of Section 138. In Vinod Shivappa this Court observed:

"One can also conceive of cases where a well-intentioned drawer may have inadvertently missed to make necessary arrangements for reasons beyond his control, even though he genuinely intended to honour the cheque drawn by him. The law treats such lapses induced by inadvertence or negligence to be pardonable, provided the drawer after notice makes amends and pays the amount within the prescribed period. It is for this reason that Clause (c) of proviso to Section 138 provides that the section shall not apply unless the drawer of the cheque fails to make the payment within 15 days of the receipt of the said notice. To repeat, the proviso is meant to protect honest drawers whose cheques may have been dishonoured for the fault of others, or who may have genuinely wanted to fulfil their promise but on account of inadvertence or negligence failed to make necessary arrangements for the payment of the cheque. The proviso is not meant to protect unscrupulous drawers who never intended to honour the cheques issued by them, it being a part of their modus operandi to cheat unsuspecting persons.

17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of criminal law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran case if the "giving of notice" in the context of Clause (b) of the proviso was the same as the "receipt of notice" a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."

With above view no further deliberation is required nor it is deemed necessary. On the above analysis I do not find any reason to interfere exercising inherent power u/s 482 of the Code to quash applicant's prosecution under 138 N.I. Act as above. This 482 Cr.P.C. Application is meritless and is dismissed. Interim order dated 19.8.2003 stands vacated.

Let the trial court be informed for it to proceed with the case and decide it as expeditiously as possible.

Order Date:14.5.2014

Tamang/