M/S Francis Klein & Co Private Ltd vs The State Of West Bengal & Ors
2022 Latest Caselaw 2732 Cal

                  IN THE HIGH COURT AT CALCUTTA
                  CRIMINAL APPELLATE JURISDICTION

Before:

The Hon'ble Justice Ananda Kumar Mukherjee


                              C.R.A. 222 of 2006

                        M/s Francis Klein & Co Private Ltd.

                                       -Vs-
                        The State of West Bengal & Ors.



For the Appellant:            Mr. Ayan Bhattacharjee, Adv.
                              Mr. Meghajit Mukherjee, Adv.
                              Mr. Aditya Ratan Tiwary, Adv.


For the State:                Mr. Pratick Bose, Adv.
                              Mr. Pravas Bhattacharya, Adv.


Heard on :                    11.03.2022.



Judgment on:                  11.05.2022.



      Ananda Kumar Mukherjee, J. :-

1.    Instant appeal under section 378 (4) of the Code of Criminal Procedure,

1973 has been filed by the appellant against Respondent no. 1 to 5 being

aggrieved and dissatisfied with the judgment and order dated 29.08.2005

passed by learned Metropolitan Magistrate, 13 th Court Calcutta in Case No. C-

5021 of 2000, thereby acquitting the accused/ opposite party no. 2 to 5 of the

charges under sections 138/141 of the Negotiable Instrument Act.

2. The appellant preferred an application praying for Special Leave to

Appeal against the impugned judgment and order and the same was registered

as C.R.M No. 180 of 2006. The same was allowed on 28.02.2006 and Special

Leave was granted to the appellant company to file the appeal.

3. In gist, the fact of appellant's case is that the appellant is a company

incorporated under the companies Act, 1956 having its place of business at

13A, Government Place East, Kolkata- 700 069. Respondent No 2 is a company

incorporated under the companies Act, 1956 having its place of business at 10,

Canning Street, Kolkata and Respondents no. 3 to 5 are the Directors of

Respondent no. 2 Company.

4. A complaint was lodged on behalf of the appellant company before the

court of learned Chief Metropolitan Magistrate, Calcutta disclosing an offence

committed by Respondents no. 2 to 5, punishable under section 138/141 of

the Negotiable Instrument Act (herein after referred as the N.I. Act).

5. In discharge of their existing liability in respect of the loan taken from

the Appellant company, Respondents no. 2 to 5 issued an account payee

cheque bearing no. 212779 dated 29.5.2000 for Rs. 5,12,188/- drawn on Bank

of India, Calcutta Overseas Branch, in favour of the appellant company.

6. The said cheque was placed for encashment but was returned

dishonoured on 24.8.2000 with the remark "Exceeding Arrangement". The

appellant company thereafter sent a Notice dated 2.9.2000, addressed to the

Respondents no. 2 to 5, informing them that the cheque was dishonoured and

asked them to make payment of the cheque amount within 15 days from the

date of receipt of the said notice.

7. The Respondents no. 2 and 4 received the said notice on 6.9.2000 while

Respondent no. 3 and 5 received the notice on 15.9.2000 but failed to pay the

amount claimed. Under such circumstances Respondents no. 2 to 5 committed

an offence punishable under section 138/141 of the Negotiable Instrument Act.

On 3.10.2000 learned Chief Metropolitan Magistrate, Kolkata on the basis of

complaint was pleased to take cognizance of the offence and after examining

the authorized representative of the appellant company was pleased to find

that a prima facie case was made out against Respondents no. 2 to 5 under

sections 138/141 of the Negotiable Instrument Act and issued process against

them.

8. Respondents no. 2 to 5 thereafter appeared before the court and the case

was transferred to the court of Learned 13 th Metropolitan Magistrate, Kolkata

for disposal. On 25.9.2001, Respondents no. 2 to 5 were examined under

section 251 of the Code of Criminal Procedure and the substance of the

accusation were read over and explained to them to which they pleaded not

guilty and claimed to be tried.

9. In order to prove their case appellant/ complainant examined three

witnesses namely Abhijit Sarkar, employee of the States Bank of India, the

banker of Respondents no. 2 to 5, as PW-1. Chandrasekhar Behara, Manager,

Global Trust Bank, Chowringhee Branch, Calcutta, banker of the appellant

company as PW-2 and Amarendra Nath Chatterjee, constituted attorney of the

appellant company as PW-3.

10. Respondents no. 2 to 5 were examined under section 313 of the Code of

Criminal Procedure and were confronted with incriminating circumstances for

their explanation.

11. The Respondents no. 2 to 5 examined one defence witness Dipti Prakash

Show as DW-1.

12. After considering the evidence on record learned Metropolitan Magistrate

13th Court, Calcutta was pleased to pass an order on 29.8.2005 wherein he

held that the charge under sections 138/141 of the Negotiable Instrument Act

has not been proved against Respondents no. 2 to 5 and acquitted them of

such charges.

13. Learned Magistrate acquitted Respondents no. 2 to 5 on the sole ground

that the copy of the demand notice was not properly proved by prosecution.

14. It is contended by learned Advocate for the appellant that PW-3, stated in

his evidence that Exhibit 12, is a true copy of the demand notice sent by the

appellant company to the Respondents no. 2 to 5 but Learned Magistrate

without appreciating the fact that service of the notice was also admitted

during examination under section 313 of Cr. P.C committed grave error in law

by not relying on the copy of demand notice (Exhibit 12) which was admitted in

evidence without any objection by defence.

15. According to the appellant learned Magistrate failed to appreciate that

under sections 138 proviso (b) of the Negotiable Instrument Act it was

necessary to send a notice by the holder of the cheque and receipt of such

notice by the drawer of the cheque. In the instant case Respondents no. 2 to 5

have not denied that demand notice was not served upon them. Therefore,

learned Magistrate by acquitting the Respondents no. 2 to 5 on a finding that

content of notice has not been proved has committed grave error in law and

caused prejudice to the petitioner.

16. The appellant has preferred this appeal against the judgment of acquittal

on the grounds inter alia, that learned Magistrate passed the impugned

judgment without application of judicial mind as such the same is liable to be

set aside, that the impugned judgment and order is erroneous and the same is

not tenable under the law and that the prosecution has proved the offence

against Respondents no. 2 to 5 beyond reasonable doubt and under such

circumstances the impugned judgment and order acquitting Respondents no. 2

to 5 is bad in law and is liable to be set aside.

17. It is further contended that the requirements under section 138 of the

N.I Act has been compiled by the appellant company and Respondents no. 2 to

5 have admitted there failure to pay the amount mentioned in the cheque

despite receipt of the said demand notice. In such circumstances learned

Magistrate has committed grave error of law by acquitting Respondents no. 2 to

5 for which the impugned judgment order is liable to be set aside.

18. Learned advocate for the appellant company argued that in a case under

section 138 of the N.I Act the mandatory requirement of issue of notice to the

drawer in terms with section 138 proviso (b) is complete when the notice is sent

in the said manner. The drawer of the cheque can rebut the presumption of

service of notice by showing that he had no knowledge that the notice was

brought to his address or the address mentioned on the notice was incorrect or

the letter was never tendered or the report of postman was incorrect. It is

argued on behalf of the appellants that when the payee dispatches a notice

under registered post with correct address of the drawer of the cheque, the

principle incorporated in section 27 of the General Clauses Act would be

attracted and the requirement of clause (b) of the proviso to section 138 of the

Act would stand complied with and cause of action to file the complaint would

arise on the expiry of the period prescribed in clause (c) of the said proviso for

payment by the drawer of the cheque and within one month of the date on

which the cause of action arise.

19. It is contended that under section 114 of the Indian Evidence Act, 1872

the court may presume the existence of certain facts which it thinks rightly to

have happened, regard being had to the common course of natural events,

human conduct and public and private business, in relating to the facts of the

particular case. It is submitted by learned advocate for the appellant that in the

present case Notice demanding payment of the cheque amount was issued to

the Respondents no. 2 to 5 under registered post the said Notice were served

upon the respondents and the postal A/D Cards bearing the signatures of the

addresses were returned to the appellant/complainant. The original notice was

served upon the accused respondents. Therefore, the appellant at the time of

adducing evidence has produced a photo copy of the notice, the original of

which had already been dispatched. In support of prove of delivery of the Notice

the postal A/D Cards were also produced as Exhibit 10 (collectively) and when

the photo copy of the notice was admitted in evidence and marked as Exhibit

12, no objection was raised by the accused respondents. Therefore, the finding

of learned Magistrate that the demand notice is not proved and by his not

attaching any evidentiary value to it has yielded to an erroneous finding which

is not legally tenable.

20. It is argued on behalf of the appellant that the entire purpose of giving a

Notice to the drawer is to give an opportunity to him to pay the cheque amount

within 15 days of service of notice with copy of complaint and thereby free

himself from the penal consequence. In support of his submission learned

advocate relied upon the case of CC Alavi Haji vs. Palapetty Mohummed;

2007(6) supreme court cases 555, where it was laid down by the Hon'ble

Court that, "the requirement to give a notice is a clear departure from the rule

of criminal law, where there is no stipulation of giving a notice before filing of a

complaint. Any drawer who claims that he did not receives the notice sent by

post, can, within 15 days of receipt of the summons from the court in respect

of the complaint under Section 138 of the Act, may 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 the 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 require under section

138, by ignoring statutory presumption to the contrary under section 27 of the

General Clauses 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 notice by

adopting different strategies and escape from legal consequence of Section 138

of the Act".

21. Learned advocate argued that the offence against Respondents no. 2 to 5

have been well established and that the notice has been served upon them but

it is due to the erroneous finding of learned Magistrate, that the contents of

exhibit 12 has not been proved, the present case has been dismissed.

22. It is argued on behalf of the appellant that Exhibit 12 should be read in

evidence and considering the fact that the receipt of the demand notice has not

been denied by the accused respondents, the same should be considered as

service of demand notice upon the respondents and on the basis of evidence

adduced and the documents produced before the trial court, Respondent no. 2

to 5 should be held guilty of the offence punishable under section 138/141 of

the Negotiable Instrument Act and the impugned judgment is liable to be set

aside and reversed.

23. To buttress his argument, learned advocate relied upon the decision in the

case of Dayamathi Bai vs. K.M. Shaffi; 2004(7) SCC 107, wherein it has been

held that where copy of documents are admitted without objection in the trial

court, no objection to their admissibility can be taken afterwards, in the court

of appeal. The proposition of law set out in the above decision is that, if a

document is in itself not inadmissible but that the mode of proof was irregular

and insufficient, objection as to the mode of proof falls within procedural law,

therefore, such objections could be waived. They have to be taken before the

document is marked s admitted to the record.

24. In Dayamathi Bai (supra) the principle of law set out and reiterated is that,

"Ordinarily, and objection to the admissibility to evidence should be taken

when it is tendered and not subsequently. The objections as to admissibility of

documents in the evidence may be classified into two classes: (i) an objection

that the document which is sought to be proved is itself inadmissible in

evidence; and (ii) where the objection does to dispute the admissibility of the

document in evidence but is directed towards the mode of proof alleging the

same to be irregular or insufficient. In the latter case, the objection should be

taken when the evidence is tendered and once the document has been

admitted in evidence and marked as an exhibit, the objection that it should not

have been admitted in evidence or that the mode adopted for proving the

document is irregular cannot be allowed to be raised at any stage subsequent

to the marking of the document as an exhibit. The latter proposition is a rule of

fair play. The crucial test is whether an objection, if taken at the appropriate

point of time, would have enabled the party tendering the evidence to cure the

defect and resort to such mode of proof as would be regular. The omission to

object becomes fatal because by his failure the party entitled to object allows

the party tendering the evidence to act on an assumption that the opposite

party is not serious about the mode of proof."

25. Reliance has also been placed by learned advocate for the appellant on the

decision in the case of Sanjib Kumar Ghosh Vs. Dolon Adhikari & Anr; 2016

ACD 1017 (CAL), wherein it was held "this court is of the clear view that the

accused appellant duly signed those AD Cards and as such he duly, received

the original notice, the photo copies of which have been marked as 'X' series for

identification. It is true that the photo copies are inadmissible in evidence,

unless admitted but in the instant case there was no question of production of

the original as those were in possession of the accused respondent."

26. Respondent No. 2 to 5 did not appear and notices sent at their address

under registered post were returned unserved. It is therefore deemed to be good

service. Learned advocate for the respondent State/ Respondent No.1 argued

that the appellant in course of trial did not adduce any evidence regarding

contents of the demand notice as such simply by admitting the document in

evidence does not extent any support to the complaint's case without the

contents of the notice being proved. It is argued that in case under section 138

of the Negotiable Instruments Act, the proof of the demand notice is essential

and mandatory. In the present case, the appellant has failed to comply the

same as such learned Magistrate committed no error by dismissing the case. It

is argued that there is nothing to interfere with the impugned judgment and

the appeal is liable to be dismissed.

27. I have carefully considered the impugned judgment, the evidence adduced

by prosecution witnesses and the defence witnesses as well as the documents

exhibited in support of their respective cases. It is undisputed that

Respondents No.3 to 5 are the Directors of respondent no. 2 company. The

allegation in the complaint is that in discharge of their existing liability in

respect of a loan taken by the accused company from the complainant, its

three Directors, Dinesh Chandra Meheta, Chaner Pal Meheta and Hiten D

Meheta in control of the affairs of the company issued a cheque bearing

212779 dated 29.05.2000 for Rs. 5,12,188/- (Exhibit 1) drawn on Bank of

India, Calcutta Overseas Branch, in favour of the complainant. The said

cheque was presented to Global Trust Bank Chowringhee Branch, Calcutta

within its valid period of for encashment but the same was returned

dishonoured on 24.08.2000. Demand notice was issued on 02.09.2000 and

sent to the accused persons through the advocate of the complainant under

registered post with AD and the same was served upon accused no. 1 and 3 on

06.09.2000 and on accused no. 2 and 4 on 15.09.2000 but the accused

persons/ respondents did not make any payment.

28. Prosecution examined three witnesses and produced several documents

including the dishonoured cheque which is marked as Exhibit 1, cheque

returned memo Exhibit 2 statement of account of the accused company with

Bank of India as Exhibit 3 and Exhibit 4, authorization letter from the Bank in

favour of witness Abhijit Sarkar to appear as a witness has been produced as

Exhibit 5, cheque return memo as Exhibit 6, statement of account of the

complainant bank as Exhibit 7, copy of power of attorney in favour of

Amarnath Chatterjee by the complainant company is marked as Exhibit 8,

postal receipt as Exhibit 9 series, AD Cards in the name of accused persons as

Exhibit 10 series, the petition of complaint under Section 138 N.I Act as

Exhibit 11 and the true copy of demand notice as exhibit 12. On reappreciation

of evidence on record I find that there is no denial of the fact that the cheque

was issued in favour of the complainant company and the same was returned

dishounoured. After dishonor of the cheque the complainant issued demand

notice dated 02.09.2000 which was duly served upon the accused persons and

the AD cards were returned to the advocate of the complainant company. The

accused petitioners who are Respondents no. 2 to 5 herein did not make any

payment within the statutory period of notice, nor did they make any payment

after service of summons along with the copy of complaint on them.

29. The presumption under Section 139 of the Negotiable Instrument Act

which arose against the accused respondents have not been rebutted. It is

therefore clear that the cheque ( Exhibit 1) was issued by one of the Directors

of the company for discharge in whole or in part of any debt of other liability.

30. The main contention in this case is that learned Magistrate did not attach

any evidentiary value to the demand notice (Exhibit 12) though the same was

admitted without any objection raised on behalf of the defence. In view of the

principle laid down in the case of Dayamathi Bai Vs. K.M Shaffi; 2004 (7)

SCC 107, it appears to me that document itself is not inadmissible as the

original notice were dispatched and served upon the accused persons. The

complainant therefore had no other alternative but to produce the photo copy

of the notice. Once the notice has been admitted in evidence without objection

it is not necessary to prove its contents. The accused respondents were fully

aware about their liability and drawing of cheque in favour of the complainant

company. They were also aware that the cheque was dishonoured and the

same may be gathered from the evidence on PW1, 2 and 3 as well as the

cheque returned memo.

31. Having considered the argument advanced by the learned advocates for

the appellant and respondent state and the materials on record, I hold that

learned Magistrate ahs committed an error in law by not placing reliance upon

the demand notice and observing in his judgment that the demand has not

been proved. Once a document is admitted in evidence without any objection

the legal consequence is that reliance has to be placed upon its content unless

the same is disputed. Being fortified with the ratio of decision reported in the

case of Dayamathi Bai Vs. K.M Shaffi; 2004 (7) SCC 107, I hold that

omission to raise objection at the time of admission of Exhibit 12 in evidence is

fatal to the defence case and there is no reason to relegate the validity of the

document as not prove. The evidence on record is cogent and consistent and

the same establishes the offence under Section 138/141 of the Negotiable

Instrument Act against Respondents no. 2 to 5 beyond reasonable doubt.

32. I, therefore, hold that the judgment of acquittal passed by learned

Magistrate suffers from illegality as it is not based upon the evidence on record.

Learned Magistrate has failed to appreciate the case in its proper perspective in

the light of the evidence on record, consistent with object of legislation, as such

the same is liable to be set aside and the impugned judgment passed by

Learned Metropolitan Magistrate 13 th Court, Calcutta in C Case no.5021 of

2000 acquitting the accused persons is therefore set aside and the judgment is

reversed.

33. The accused company/ Respondent No.2 and it's three directors who are

Respondents no. 3 to 5 in this appeal are found guilty of the offence punishable

under section 138/141 of that N.I Act they are convicted for the said offence. In

view of the outstanding cheque amount of Rs.5,12,188/- which was

dishonoured and unpaid since 29.05.2000, I consider it appropriate and

reasonable to sentence the accused company and its three directors, Dinesh

Chandra Meheta, Chaner Lal Meheta and Hiten Meheta, to a fine of Rs.

8,00,000/- jointly and severally in default accused Directors shall suffer

rigorous imprisonment for one year each . Learned Metropolitan Magistrate

13th Court shall accordingly issue a warrant of sentence. The fine of Rs.

8,00,000/- on being realized shall be paid to the complainant as compensation.

The appeal is accordingly allowed.

34. Let the LCR along with copy of the judgment be sent to the learned

Metropolitan Magistrate 13th Court, Calcutta for execution of the sentence

within a period of one month from the date of receipt of the record. The

convicted persons are directed to surrender before learned Metropolitan

Magistrate 13th Court, Calcutta within a fortnight from date. A true copy of this

judgment be supplied to Respondent Nos. 2 to 5 free of cost for intimation.

35. Urgent Photostat certified copy of this judgment, be supplied to the parties

if applied for, maintaining all formalities.

(Ananda Kumar Mukherjee, J.)