Bharatbhai Ranchodbhai Parmar vs Rajendrakumar Bahecharbhai ...
2023 Latest Caselaw 4325 Guj

    R/CR.A/2578/2008                                CAV JUDGMENT DATED: 12/06/2023




               IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                       R/CRIMINAL APPEAL NO. 2578 of 2008


FOR APPROVAL AND SIGNATURE:


HONOURABLE MS. JUSTICE NISHA M. THAKORE
==========================================================

1 Whether Reporters of Local Papers may be allowed to see the judgment ?

2      To be referred to the Reporter or not ?

3      Whether their Lordships wish to see the fair copy
       of the judgment ?

4      Whether this case involves a substantial question

of law as to the interpretation of the Constitution of India or any order made thereunder ?

========================================================== BHARATBHAI RANCHODBHAI PARMAR Versus RAJENDRAKUMAR BAHECHARBHAI ANAND & 1 other(s) ========================================================== Appearance:

(MR BS BRAHMBHATT)(2300) for the Appellant(s) No. 1 ADVOCATE NOTICE SERVED for the Appellant(s) No. 1

MR MP PRAJAPATI(677) for the Opponent(s)/Respondent(s) No. 1 MR BHARGAV PANDYA ADDL. PUBLIC PROSECUTOR for the

==========================================================

CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE

Date : 12/06/2023

CAV JUDGMENT

1. This appeal is filed by the original complainant under Section

378(4) of the Code of Criminal Procedure, challenging the

judgment and order dated 31.07.2006 passed by the learned

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

Judicial Magistrate First Class, Gandhinagar, in Criminal Case

No.2863 of 2004. By the said judgment and order, the learned

Magistrate has recorded the acquittal of respondent No.1 - original

accused for the charges under Section 138 of the Negotiable

Instruments Act, 1881.

2. Brief facts of the case of the complainant are as under:

2.1 That the appellant - original complainant is having

newspaper agency and his father was retired Government servant

and during their service tenure, the accused had contacted to the

present appellant due to his father relation and given Rs.20,000/-

in his bad days. After long period, the accused did not come

forward for returning this amount and also father of the applicant

had expired on 14.10.2023. It is contended that several reminders

were given to the respondent - accused for the aforesaid amount,

the respondent - accused had given him a cheque No.872736 of

State Bank of India dated 12.03.2004 of Rs.20,000/- with the

assurance that such amount shall be realized. The said cheque

was deposited by the appellant on 12.03.2004 in the Bank of India

at Gandhinagar Branch in his account No.9701. However, the said

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

cheque was dishonoured and returned back with the memo of

"insufficient balance".

2.2 The same was informed to the appellant on 15.03.2004. The

legal notice under Section 138 of the N.I. Act was issued by the

complainant to the accused on 26.03.2004 by R.P.A.D. and by

U.P.C. at the office address of the accused. The R.P.A.D. was

refused by the accused and U.P.C. was duly received by the

respondent accused and as the amount in question was not paid

within prescribed period of 15 days, the appellant was constrained

to file the complaint before the Court of learned Judicial Magistrate

First Class, Gandhinagar. However, the respondent - accused

came to be acquitted after trial by the impugned judgment and

order dated 31.0.7.2006. Hence, this appeal at the instance of the

complainant.

2.3 The complaint was registered on 29.04.2004 as Criminal

Case No.2863 of 2004 for the offence punishable under Section

138 of the N.I. Act. Upon verification of the complainant, the

learned Magistrate proceeded to issue summons upon respondent

- accused. Such summons issued by the trial Court was duly

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

served. The learned Magistrate after recording plea of accused,

who refused the case of complainant, proceeded to record the

evidence. The further statement of accused under Section 313 of

Cr.P.c. was recorded.

3. This Court by order dated 25.09.2008 had granted leave to

appeal. Thereafter, the matter was adjourned for admission and by

order dated 14.10.2008, this Court had admitted the present

appeal. The notice was issued by this Court upon the respondent

No.1 - original accused, which was duly served and was

represented by the learned advocate Mr. M.P. Prajapati. The R &

P of the original Criminal Case was called for which was received

by this Court. When the matter was listed for final hearing, it was

reported that the learned advocate Mr. B.S. Brahmbhatt

representing the appellant, had expired pending the appeal.

Hence, the notice was issued upon the appellant in order to enable

him to engage a lawyer to represent his case. Though the notice

was served, the appellant has chosen not to appear or to engage

the lawyer to conduct the present appeal. Thus, this Court by order

dated 07.09.2022 after recording absence of appellant and

considering the appeal is of the year 2008, as a last chance, had

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

adjourned the matter on 21.09.2022. Few adjournments were

granted and ultimately, this Court proceeded to hear the matter

with the assistance of learned APP Mr. Bhargav Pandya and

learned advocate Ms. Nishi Patel for Mr. Prajapati, learned

advocate for the respondent No.1.

4. Ms. Nishi Patel, learned advocate has invited attention of this

Court to the impugned judgment and order of acquittal. She has

submitted that learned Magistrate after recording the evidence,

has passed the reasoned order under Section 255(1) of the Code

of Criminal Procedure. She has further submitted that during the

appreciation of evidence, which has come on record, the learned

Magistrate noticed that the complainant has failed to comply with

the statutory requirement of service of notice to the respondent as

per the statutory provisions of Section 138(b) of the N.I. Act. She

has further invited attention of this Court to the R & P, more

particularly, the legal notice dated 24.03.2004 (Exhibit 17/1), postal

slip dated 25.03.2004 (Exhibit 18), UPC slip (Exhibit 18/1),

envelope of postal slip of UPC (Exhibit 19), envelope sent by

RPAD by the complainant to the accused. She submitted that in

examination-in-chief, the complainant has fairly admitted that

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

though the attempt was made to serve the notice under Section

138 of the NI Act upon the accused, the same could not be duly

served and had returned back unserved. She, therefore, submitted

that no error can be attributed to the learned Magistrate in passing

the impugned order on failure of the complainant to comply with

the mandatory requirement to maintain the complaint under

Section 138 of the N.I. Act.

5. In support of her submissions, she has relied upon the

decision of this Court in the case of Dashrathbhai Trikambhai Patel

Vs. Hitesh Mahendrabhai Patel & Ors. reported in

MANU/GJ/1648/2022 and submitted that operation of Section 138

of the N.I. Act is limited by proviso, when the proviso was applied

the complaint would not be maintainable. She therefore, submitted

that unless the notice is served in conformity with the proviso (a),

(b) and (c) appended to Section 138 of the Negotiable

Instruments Act, the complaint would fail. She therefore, urged

this Court to not to entertain the present appeal.

6. Having perused the record and the impugned order of trial

court and considering the submissions of learned counsel for

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

accused, the point that arises for my consideration in the appeal

would be : "Whether the trial Court, in the present facts of the

case, was justified in rejecting the complaint on the ground of non

compliance of mandatory provision of section 138(b) of the NI

Act?"

7. Proviso to Section 138 of the NI Act stipulates that three

conditions must be satisfied before dishonour of a cheque can

constitute an offence and become punishable. The first condition is

that the cheque ought to have been presented before 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. The second

condition is that the payee or the holder in due course of the

cheque must make a demand for payment of the amount of money

by giving a notice in writing to the drawer of the cheque within

thirty days of the receipt of information by him from the bank

regarding return of the cheque as unpaid. The third condition is

that the drawer of such a cheque should have failed to make

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. It is only upon the

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

satisfaction of all the aforesaid three conditions that an offence

under Section 138 can be said to have been committed by the

person issuing the cheque. Thus, giving notice of demand to the

payee within the stipulated period after dishonor of a cheque is

one of the necessary conditions for making out the offence under

Section 138 of the NIA Act.

8. The Supreme Court in the case of D. Vinod Shivappa vs.

Nanda Belliappa, reported in (2006) 6 SCC 456, has elaborately

dealt with a situation where the notice could not be served on the

addressee for one or the other reason, such as his non availability

at the time of delivery, or premises remaining locked on account of

his having gone elsewhere etc. It was observed that if in each such

case, the law is understood to mean that there has been no

service of notice, it would completely defeat the very purpose of

the Act. The Court further observed that it would then be very easy

for an unscrupulous and dishonest drawer of a cheque to make

himself scarce for sometime after issuing the cheque so that the

requisite statutory notice can never be served upon him and

consequently he can never be prosecuted. The Court went on to

observe that a person who can dodge the postman for about a

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

month or two, or a person who can get a fake endorsement made

regarding his non availability, can successfully avoid his

prosecution because the payee is bound to issue a notice to him

within a period of 30 days from the date of receipt of information

from the bank regarding return of the cheque as unpaid.

9. The aforesaid observations were relied upon by the Supreme

Court in the case of C. C. Alavi Haji vs. Palapetty Muhammed

and Anr., reported in (2007) 6 SCC 555. However, it was

observed by the Supreme Court that 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. What the

Supreme Court has emphasized is that the notice should have

been sent on the correct address of drawer of the cheque. It is only

then it can be said that notice has been received by the drawer of

the cheque.

10. In Harman Electronics Private Limited and another vs.

National Panasonic India Private Ltd, reported in (2009) 1 SCC

720, the Supreme Court has, while deliberating on the aforesaid

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

issue, observed as under:

"13. It is one thing to say that sending of a notice is one of the ingredients for maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the ingredients thereof are required to be proved. What would constitute an offence is stated in the main provision. The proviso appended thereto, however, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken. If the ingredients for constitution of the offence laid down in provisos (a), (b) and (c) appended to Section 138 of the Negotiable Instruments Act are intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action for filing a complaint. As it is only on receipt of the notice that the accused at his own peril may refuse to pay the amount. Clauses (b) and (c) of the proviso to Section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would."

It was further observed by the Court that for constitution of

an offence under Section 138 of the Act, the notice must be

received by the accused. The Court went on to observe that it may

be deemed to have been received in certain situations. An

inference of having received the notice by a drawer of a cheque

can be raised only if the notice has been dispatched to his correct

address. Such an inference cannot be drawn if the notice has been

sent on the incorrect address of the drawer of the cheque.

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

11. The Hon'ble Supreme Court in the case of N. Harihara

Krishnan Vs. J. Thomas, reported in (2018) 13 SCC 663, while

holding that provisions of CrPC should give way to section 142 of

N.I. Act in the taking cognizance of offence under section 138 of

N.I.Act, also examined the scheme of the N.I. Act and explained

the ingredients to be necessary to be fulfilled for "cause of action"

to lodge prosecution. The relevant observations are as under :

" 23. The scheme of the prosecution in punishing under Section 138 of THE ACT is different from the scheme of the Crpc. Section 138 creates an offence and prescribes punishment. No procedure for the investigation of the offence is contemplated. The prosecution is initiated on the basis of a written complaint made by the payee of a cheque. Obviously such complaints must contain the factual allegations constituting each of the ingredients of the offence under Section 138 . Those ingredients are: (1) that a person drew a cheque on an account maintained by him with the banker; (2) that such a cheque when presented to the bank is returned by the bank unpaid; (3) that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier; (4) that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; and (5) such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. It is obvious from the scheme of Section 138 that each one of the ingredients flows from a document which evidences the

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

existence of such an ingredient. The only other ingredient which is required to be proved to establish the commission of an offence under Section 138 is that inspite of the demand notice referred to above, the drawer of the cheque failed to make the payment within a period of 15 days from the date of the receipt of the demand. A fact which the complainant can only assert but not prove, the burden would essentially be on the drawer of the cheque to prove that he had in fact made the payment pursuant to the demand.

24. By the nature of the offence under Section 138 of THE ACT, the first ingredient constituting the offence is the fact that a person drew a cheque. The identity of the drawer of the cheque is necessarily required to be known to the complainant (payee) and needs investigation and would not normally be in dispute unless the person who is alleged to have drawn a cheque disputes that very fact.

The other facts required to be proved for securing the punishment of the person who drew a cheque that eventually got dishonoured is that the payee of the cheque did in fact comply with each one of the steps contemplated under Section 138 of THE ACT before initiating prosecution. Because it is already held by this Court that failure to comply with any one of the steps contemplated under section 138 would not provide " cause of action for prosecution". Therefore, in the context of a prosecution under Section 138, the concept of taking cognizance of the offence but not the offender is not appropriate. Unless the complaint contains all the necessary factual allegations constituting each of the ingredients of the offence under Section 138, the Court cannot take cognizance of the offence. Disclosure of the name of the person drawing the cheque is one of the factual allegations which a complaint is required to contain. Otherwise in the absence of any authority of law to investigate the offence under Section 138, there would be no person against whom a Court can proceed. There cannot be a prosecution without an accused. The offence under Section 138 is person specific. Therefore, the Parliament declared under Section 142 that the provisions dealing with taking cognizance

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

contained in the CrPC should give way to the procedure prescribed under Section 142. Hence the opening of non- obstante clause under Section 142. It must also be remembered that Section 142 does not either contemplate a report to the police or authorise the Court taking cognizance to direct the police to investigate into the complaint."

12. In the instance case, it has come on record that the notice was

initially dispatched by registered post A.D., on the address which is

the Government office where the accused seems to be doing

service. As per the postal department report, cover with had

returned back with an endorsement "during distribution of post

accused not available". In examination in chief, the complainant

has admitted that service of legal notice could not be effected.

However, the fact remains that no question has been raised with

regard to incorrect address by the accused in cross examination.

On the other hand, on the same address court summons have

been duly served upon accused who has remained present before

the Magistrate in response to the court's summons. In such

circumstances, considering the legal proposition as laid down in

the case of C.C. Alavi ( supra), I am of the view that the learned

Magistrate committed error in dismissing the complaint on the

ground of non compliance of section 138(b) of the N.I.Act. The

notice being sent by RPAD / UPC on the correct address of the

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

accused raises presumption in favor of the complainant and in

absence of any contrary fact being brought on record, the said

presumption stands unrebutted.

13. So far as reliance placed by learned Advocate for the

respondent -accused on the decision of this Court in the case of

Dashratbhai Trikambhai Patel ( supra) is concerned, it was mainly

concerned on the issue of non compliance of section 138(b) of the

N.I. Act where the complainant had failed to specify the amount in

the legal notice, which was treated vague and capable of two

interpretations. It is in this background of facts, this Court held that

service of notice is trite and imperative in character for maintaining

complaint.

14. For foregoing reasons, the impugned order passed by the

learned Magistrate lays down an incorrect proposition of law, in the

facts of the case. Now, on merits of the case , the court notices

that the accused has raised probable defense of no debt

outstanding and the security cheque lying with the father of the

complainant being misused by the complainant. From the record of

the present appeal it has transpired that the learned advocate

R/CR.A/2578/2008 CAV JUDGMENT DATED: 12/06/2023

representing the appellant had expired and notice was sent to the

Appellant which has been duly served. The Appellant has chosen

not to engage a lawyer or to appear before this court to conduct

the present appeal. Considering the age of the matter, this court

has called upon the learned advocate for respondent and has

proceeded to decide the matter finally. It appears that the disputed

amount on the cheque involved is Rs. 20,000 : 00. In such

circumstances, considering the smallness of the amount and the

appellant having not appeared, the present Appeal is not

entertained and hence rejected.

The Appeals stands disposed as rejected. Bailable warrant

stands discharged. Record and proceedings be sent back forthwith

to the concerned Court.

(NISHA M. THAKORE,J) Y.N. VYAS