Chand Mohd. vs State Of U.P. And Another
2017 Latest Caselaw 1180 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 

 
Court No. - 48
 

 
Case :- APPLICATION U/S 482 No. - 17039 of 2017
 

 
Applicant :- Chand Mohd.
 
Opposite Party :- State Of U.P. And Another
 
Counsel for Applicant :- Diwan Saifullah Khan
 
Counsel for Opposite Party :- G.A.
 

 
Hon'ble Surya Prakash Kesarwani,J.

1. The present application under Section 482 Cr.P.C. has been filed by the applicant with the prayer to quash the entire proceeding of Complaint Case No. 380 of 2015 (Arshad Saeed Vs. Chand Mohd.), under Section 138 Negotiable Instruments Act, Police Station Rakabganj, District Agra, pending in the court of Addl. Chief Judicial Magistrate, Court No. 12, Agra as well as the order dated 29.04.2015. Further prayer has been made to stay the further proceedings of aforesaid criminal complaint case.

2. Heard learned counsel for the applicant and the learned AGA appearing for the State.

3. Learned counsel for the applicant submits as under:

(i) Complaint Case No. 380 of 2015 (Arshad Saeed Vs. Chand Mohd.), under Section 138 Negotiable Instruments Act, has been filed in the court of Addl. Chief Judicial Magistrate-12, Agra on 29.04.2015 i.e. beyond 30 days of the date of return of the complaint on 13.03.2015 by the Addl. Chief Judicial Magistrate, Baadi, Dhaulpur, (Rajasthan). Thus, the complaint has been filed beyond limitation as provided by the judgment of Hon'ble Supreme Court in the case of Dashrath Rupsingh Rathod Vs. State of Maharashtra1 (para 22).

(ii) Without taking evidence the applicant was summoned by order dated 29.04.2015.

(iii) Notice under Section 138 N.I. Act was not served upon the applicant and therefore, the complaint could not have been proceeded.

4. Learned A.G.A. submits that this application filed by the applicant is a glaring example of abuse of process of Court and to defeat the very object of Negotiable Instruments Act. He submits that from the record it appears that initially the complaint was filed before Additional Chief Judicial Magistrate, Court No. 1, Baadi, District Dhaulpur (Rajasthan) and the applicant was summoned on 25.09.2013 but the complaint was directed to be returned by the aforesaid learned Magistrate by order dated 18.03.2015. He submits that the complaint has been filed in accordance with law before the Additional Chief Judicial Magistrate, Court No. 12, Agra being Complaint Case No. 380 of 2015 (Arshad Saeed Vs. Chand Mohd.), under Section 138 Negotiable Instruments Act, P.S. Rakabganj, District Agra.

5. I have carefully considered the submissions of learned counsels for the parties.

6. Briefly stated facts of the present case are that it appears that the applicant herein has given a cheque no. 246232 for Rs. 22,85,000/- dated 06.01.2013 drawn on State Bank of India, Agra Main Branch, Agra to the opposite party no. 2 pursuant to some agreement. The opposite party no. 2 presented the cheque in his bank which was dishonoured and an intimation of dishonour of cheque was given by the Bank vide memo dated 09.04.2013. Consequently, the opposite party no. 2 sent a notice to the applicant dated 02.05.2013 by registered post requiring the applicant to pay the amount of the cheque within 15 days of the receipt of the notice. The applicant did not pay the amount of the cheque. Consequently, the opposite party no. 2 filed a complaint case no. 268A of 2013 on 03.07.2013 in the court of learned Addl. Chief Judicial Magistrate, Court No. 1, Baadi, Dhaulpur (Rajasthan) in which the applicant was summoned by order dated 25.09.2013. However, the Addl. Chief Judicial Magistrate, Court No. 1, Baadi, Dhaulpur (Rajasthan) passed an order dated 13.03.2015 signed on 18.03.2015 to return the plaint to the opposite party no. 2 to enable him to file the complaint case before the appropriate court in view of law laid down by Hon'ble Supreme Court in the case of Dashrath Rupsing Rathod (supra). No material has been brought on record by the applicant that the plaint and the other documents were returned to the opposite party no. 2 on the same day. No material has been brought on record that when the plaint and other papers were actually returned to the opposite party no. 2.

7. In para 15 of the affidavit accompanying the present application, the applicant has stated on personal knowledge that the plaint was returned by the learned Addl. Chief Judicial Magistrate, Court No. 1, Baadi, Dhaulpur (Rajasthan) on 13.03.2015. The averments so made in para 15 are false on the very face of it, inasmuch as, the learned Addl. Chief Judicial Magistrate, Court No. 1, Baadi, Dhaulpur (Rajasthan) has signed the order on 18.03.2015 and as such there was no question to return the plaint prior to 18.03.2015. That apart, copy of the return memo has also not been filed along with the application. 

8. Para 22 of the Judgment in the case of Dashrath Rupsing Rathod (supra), has been heavily relied by the learned counsel for the applicant which is reproduced below:

"22. We are quite alive to the magnitude of the impact that the present decision shall have to possibly lakhs of cases pending in various Courts spanning across the country. One approach could be to declare that this judgment will have only prospective pertinence, i.e. applicability to Complaints that may be filed after this pronouncement. However, keeping in perspective the hardship that this will continue to bear on alleged accused/respondents who may have to travel long distances in conducting their defence, and also mindful of the legal implications of proceedings being permitted to continue in a Court devoid of jurisdiction, this recourse in entirety does not commend itself to us. Consequent on considerable consideration we think it expedient to direct that only those cases where, post the summoning and appearance of the alleged Accused, the recording of evidence has commenced as envisaged in Section 145(2) of the Negotiable Instruments Act, 1881, will proceeding continue at that place. To clarify, regardless of whether evidence has been led before the Magistrate at the pre-summoning stage, either by affidavit or by oral statement, the Complaint will be maintainable only at the place where the cheque stands dishonoured. To obviate and eradicate any legal complications, the category of Complaint cases where proceedings have gone to the stage of Section 145(2) or beyond shall be deemed to have been transferred by us from the Court ordinarily possessing territorial jurisdiction, as now clarified, to the Court where it is presently pending. All other Complaints (obviously including those where the accused/respondent has not been properly served) shall be returned to the Complainant for filing in the proper Court, in consonance with our exposition of the law. If such Complaints are filed/refiled within thirty days of their return, they shall be deemed to have been filed within the time prescribed by law, unless the initial or prior filing was itself time barred."

9. Perusal of the judgment in the case of Dashrath Rupsing Rathod (supra), shows that Hon'ble Supreme Court has provided that if the complaint is filed / refiled within 30 days of return, it should be deemed to have been filed within time prescribed by law, unless the initial or prior filing was itself time barred. The facts of the present case shows that the order dated 13.03.2015 to return the complaint was signed by the learned Addl. Chief Judicial Magistrate, Court No. 1, Baadi, Dhaulpur (Rajasthan) on 18.03.2015. No material has been brought on record by the applicant that when the complaint was actually returned to the opposite party no. 2 to enable him to refile the complaint before the court at Agra. That apart, proviso to sub-section (1) of Section 142 empowers the court to take cognizance of a complaint even after the prescribed period of 30 days, if the complainant satisfies the court that he has sufficient cause. Thus, the power of the court to take cognizance on complaint even if filed beyond 30 days has been conferred under the Act. However, in the present set of facts, it is sufficient to observe that since no material has been brought on record by the applicant with regard to the actual date of the return of the complaint by the learned Addl. Chief Judicial Magistrate, Court No. 1, Baadi, Dhaulpur (Rajasthan) to the opposite party no. 2 and as  such it cannot be said that the complaint was not presented by the opposite party no. 2 within the time provided by the Hon'ble Supreme Court in the case of Dashrath Rupsing Rathod (supra).

10. The facts, as aforenoted, leave no manner of doubt that the opposite party no. 2 has filed a complaint case well within time before the court at Dhaulpur. The complainant was not at fault at any point of time. The commission of offence under Section 138 N.I. Act has been prima-facie made out against the applicant. In the present proceedings before the learned Addl. Chief Judicial Magistrate at Agra the applicant has appeared pursuant to the summons issued and the case is at the evidence stage. Copy of the order sheet shows that the applicant was avoiding his appearance and as such he was brought before the court by arrest on 05.09.2016 pursuant to the non-bailable warrant issued on 19.08.2016 against him. He was enlarged on bail on 05.09.2016 itself. The statement of the applicant has been recorded on 03.12.2016. The matter is pending before the learned Addl. Chief Judicial Magistrate at the stage of evidence. 

11. Now this application has been filed at a belated stage raising the objection as aforenoted. The conduct of the applicant shows that he has been making effort to delay the proceedings either avoiding his appearance or on other grounds. 

12. The object of the Act underlined under Section 138 of the Act is to promote and inculcate in the efficiency of banking system and its operation giving credibility to negotiable instrument in business transaction and to create an atmosphere of faith and reliance by discouraging people from dishonouring their commitments which are implicit when they pay their dues through cheque. Section 138 has been enacted to punish those unscrupulous persons who issued cheques for discharging their liabilities without really intending to honour the promise that goes with drawing up of such a negotiable instrument. To enhance the acceptability of cheque in settlement of liabilities by making the drawer liable for penalties in case of dishonour of cheque and to safeguard and to prevent harassment of honest drawers, Section 138 of the Act has been enacted. Reference in this regard may be had to the judgment of Hon'ble Supreme Court in the case of Mosaraf Hossain Khan Vs. Bhageeratha Engineering Ltd.2, C.C. Alavi Haji Vs. Palapetty Muhammed and Anr3, Damodar S. Prabhu Vs. Syed Babalal H.4 (para 3) and MSR Leathers Vs. S. Palaniappan & Anr5 (para 29).

13. In the case of New India Sugar Mills Ltd. Vs. Commissioner of Sales Tax, Bihar6 (para 8), Hon'ble Supreme Court held that it is a recognized rule of interpretation of statutes that the expressions used therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute, and which effectuate the object of the Legislature. If an expression is susceptible of a narrow or technical meaning, as well as a popular meaning, the Court would be justified in assuming that the Legislature used the expression in the sense which would carry out its object and reject that which renders the exercise of its power invalid.

14. In the case of MSR Leathers (supra) Hon'ble Supreme Court has considered the proviso to section 142(b) of the Act inserted by Act 26 of 2015 and held as under:

"26. Absolution is, at any rate, a theological concept which implies an act of forgiving the sinner of his sins upon confession. The expression has no doubt been used in some judicial pronouncements, but the same stop short of recognizing absolution as a juristic concept. It has always been used or understood in common parlance to convey "setting free from guilt" or "release from a penalty". The use of the expression "absolution" in Sadanandan Bhadran's case (supra) at any rate came at a time when proviso to Section 142(b) had not found a place on the statute book. That proviso was added by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 which read as under:

"Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period."

27. The Statement of Objects and Reasons appended to the Amendment Bill, 2002 suggests that the introduction of this proviso was recommended by the Standing Committee on Finance and other representatives so as to provide discretion to the Court to waive the period of one month, which has been prescribed for taking cognizance of a case under the Act. This was so recognised judicially also by this Court in Subodh S. Salaskar v. Jayprakash M. Shah & Anr.7 where this Court observed:

"11. The [Negotiable Instruments] Act was amended in the year 2002 whereby additional powers have been conferred upon the court to take cognizance even after expiry of the period of limitation by conferring on it a discretion to waive the period of one month.

24...The provisions of the Act being special in nature, in terms thereof the jurisdiction of the court to take cognizance of an offence under Section 138 of the Act was limited to the period of thirty days in terms of the proviso appended thereto. The Parliament only with a view to obviate the aforementioned difficulties on the part of the complainant inserted proviso to Clause (b) of Section 142 of the Act in 2002. It confers a jurisdiction upon the court to condone the delay..."

28. The proviso referred to above now permits the payee to institute prosecution proceedings against a defaulting drawer even after the expiry of the period of one month. If a failure of the payee to file a complaint within a period of one month from the date of expiry of the period of 15 days allowed for this purpose was to result in ''absolution', the proviso would not have been added to negate that consequence. The statute as it exists today, therefore, does not provide for ''absolution' simply because the period of 30 days has expired or the payee has for some other reasons deferred the filing of the complaint against the defaulter.

29. It is trite that the object underlying Section 138 of the Act is to promote and inculcate faith in the efficacy of banking system and its operations, giving credibility to Negotiable Instruments in business transactions and to create an atmosphere of faith and reliance by discouraging people from dishonouring their commitments which are implicit when they pay their dues through cheques. The provision was intended to punish those unscrupulous persons who issued cheques for discharging their liabilities without really intending to honour the promise that goes with the drawing up of such a negotiable instrument. It was intended to enhance the acceptability of cheques in settlement of liabilities by making the drawer liable for penalties in case the cheque was dishonoured and to safeguard and prevent harassment of honest drawers. (See Mosaraf Hossain Khan v. Bhageeratha Engg. Ltd.8, C.C. Alavi Haji v. Palapetty Muhammed & Anr.9 and Damodar S. Prabhu v. Sayed Babulal H.10. Having said that, we must add that one of the salutary principles of interpretation of statutes is to adopt an interpretation which promotes and advances the object sought to be achieved by the legislation, in preference to an interpretation which defeats such object. This Court has in a long line of decisions recognized purposive interpretation as a sound principle for the Courts to adopt while interpreting statutory provisions. We may only refer to the decisions of this Court in New India Sugar Mills Ltd. v. Commissioner of Sales Tax, Bihar11, where this Court observed:

"It is a recognised rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute, and which effectuate the object of the Legislature. If an expression is susceptible of a narrow or technical meaning, as well as a popular meaning, the Court would be justified in assuming that the Legislature used the expression in the sense which would carry out its object and reject that which renders the exercise of its power invalid."

(Emphasis supplied by me)

15. Facts of the present case shows that despite institution of the complaint case in the year 2013 by the opposite party no. 2 against the applicant, the case could not be concluded for one reason or the other without any fault on the part of opposite party no. 2. The conduct of the applicant shows an effort on his part to defeat the very object of Section 138 which has been enacted to enhance the acceptability of cheque in settlement of liabilities by making the drawer liable for payment of amount for which the cheque was dishonoured.

16. The second submission of the applicant that he has been summoned without taking evidence, also does not appear to be acceptable, inasmuch as, the complaint is supported by an affidavit of the opposite party no. 2/ complainant and along with complaint all relevant documents including the original cheque in question, the cheque return memo issued by the Bank and copy of notice along with registered postal receipts etc. have been filed by the opposite party no. 2 as evident from Annexure No. 3 and 4 to the affidavit accompanying the present application.

17. Third submission of learned counsel for the applicant that the notice issued by opposite party no. 2 was not served upon him, does not appear to be correct, inasmuch as, in the affidavit accompanying the complaint, the opposite party no. 2 has clearly stated that a notice dated 02.05.2013 was sent to the applicant by registered post on 03.05.2013. It has also been stated that he has moved an application before the Post Master on 01.06.2013 to provide information about receipt of the notice sent by registered post to the applicant but the information has not been provided. It has further been stated by the opposite party no. 2 on affidavit that since the notice has been sent by registered post to the applicant at the correct address and as such it shall be presumed that the notice has been received by the applicant herein. In para 8 of the affidavit, the opposite party no. 2 has stated that the applicant has not paid the amount of the cheque along with interest even after receipt of the notice. Thus, the requirement of the Act with respect to the service of notice for the purposes of Section 138 of the Act has been complied with by the opposite party no. 2. 

18. Section 27 of the General Clauses Act provides for presumption of service by post as under :

"27. Meaning of service by post- Where any [Central Act] or Regulation made after the commencement of this Act authorizes 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 addressig, 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 delievered in the ordinary course of post."

19. Perusal of Section 27 of the General Clauses Act, as aforequoted clearly indicates that there is a presumption of service by registered post. The provisions of the aforesaid Section 27 of the Act regarding presumption of service has been interpreted by Hon'ble Supreme Court and it has been held that there is a rebuttable presumption of service by registered post. Reference in this regard may be had to the judgment of Hon'ble Supreme Court in the case of Gujarat Electricity Board v. Atmaram Sungomal Poshani12; Commissioner of Income Tax (Adm.), Bengal v. V.K. Gururaj and Ors.13, State of U.P. v. T.P. Lal Srivastava14; Adavala Suthaiah and Ors. Special Deputy Collector, Land Acquisition and Ors. Anr.15 and Shimla Development Authority and Ors. v. Santosh Sharma (Smt.) and Anr.16.

20. It has also been well settled by Hon'ble Supreme Court that when notice is sent at the correct address by registered post and neither acknowledgment nor undelivered registered cover is received back then there is presumption of service although rebuttable. The burden to rebut presumption lies on the party challenging the factum of service. Reference in this regard may be had to the judgments of Hon'ble Supreme Court in the case of Indian Bank v. Datla Venkata Chinna Krishnam Raju17; Ram Chandra Verma v. Jagat Singh Singhi and others18; ATTABIRA Regulated Market Committee v. Ganesh Rice Mills19; Union of India v. Ujagar Lal20; C.C. Alavi Haji v. Palapetty Muhammed21 (Paras 10 & 15 ) and Sunil Kumar Shambhudayal Gupta (DR) and others v. State of Maharashtra22 (Paras 53 to 56 ).

21. In the case of Gujarat Electricity Board v. Atmaram Sungomal Poshani (supra ), AIR (1989) SC 1433 (para 8), Hon'ble Supreme Court held as under :

"8. There is presumption of service of a letter sent under registered cover.... No doubt the presumption is rebutable and it is open to the party concerned to place evidence before the Court to rebut the presumption by showing that the address mentioned on the cover was incorrect or that the postal authorities never tendered the registered letter to him.... The burden to rebut the presumption lies on the party, challenging the factum of service."

22. Similar view has been taken by Hon'ble Supreme Court in the case of V.K. Gururaj (supra ); Shimla Development Authority (supra ); and by Privi Council in Harihar Banerjee v. Ramshashi Roy, AIR 1918 PC 102.

23. The aforesaid judgments have also been followed by Hon'ble Supreme Court in the case of Sunil Kumar Shambhudayal Gupta (supra). In the case of C.C. Alavi Haji v. Palapetty Muhammed (supra), Hon'ble Supreme Court considered the provisions of Section 138 of N.I. Act and Section 27 of the General Clauses Act,1897 and held as under :

"10. It is, thus, trite to say that where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the G.C. Act would be attracted; the requirement of Clause (b) of proviso to Section 138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in Clause (c) of the said proviso for payment by the drawer of the cheque. Nevertheless, it would be without prejudice to the right of the drawer to show that he had no knowledge that the notice was brought to his address.

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 Vs. Natthu Singh23 ; State of M.P. Vs. Hiralal & Ors.24 and V. Raja Kumari Vs. P.Subbarama Naidu & Anr.25] 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 G.C. 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."

(Emphasis supplied by me)

24. In the present case it is undisputed that the notice under Section 138(b) of the N.I. Act was sent by the opposite party no. 2 by registered post to the applicant at the correct address. The facts in this regard have been clearly stated in the complaint filed by opposite party o.2. The drawer of the cheque i.e. the applicant has completely failed to rebut the presumption about the service of notice. He has also failed to show that he had no knowledge that the notice was brought to his address or that the address mentioned at the cover, was incorrect or that the letter was never tendered. Under the circumstances, there is presumption of service of notice sent by opposite party no. 2 to the applicant herein by registered post and, therefore, the third argument of the learned counsel for the applicant deserves to be rejected and is hereby rejected.

25. In view of the above discussion, I do not find any merit in the present application. Consequently, the application is dismissed.

Order Date :- 25.5.2017

IrfanUddin