Prateek Agarwal vs Sharmila Goyanka
2022 Latest Caselaw 54 Mani

            Digitally signed
LAIRENM by                                                         (Through video conferencing)
         LAIRENMAYUM
AYUM INDRAJEET
INDRAJE SINGH
         Date:                      IN THE HIGH COURT OF MANIPUR
ET SINGH 2022.02.21
         15:53:06 +05'30'                     AT IMPHAL

                                    CRIMINAL PETITION NO. 39 OF 2021

        Prateek Agarwal, aged about 37 years,
        s/o Shri Rajendra Agarwal, a resident of S-206,
        Panchsheel Park, New Delhi-110017.
                                                                           ....... Petitioner
                                    - Versus -

        1. Sharmila Goyanka, aged about 45 years,
           w/o Mr. Manish Kumar Goyanka, a resident of H-348,
           First Floor, H-Block, Naraina Vihar, New Delhi-110028 and

        2. Shri Khomdram Devabarta Singh, aged about 41 years,
           s/o Khomdram Lokeshore Singh, R/O Haobam Marak
           Ngangom Leikai, Imphal West, Manipur-795001.
                                                                           ..... Respondents

        For the Petitioner                       ::   Mr. Th.Mahira, Advocate

        For the Respondents                      ::   Mr. Mangsatabam Rarry, Advocate

        Date of reserving of Judgment            ::   08.02.2022

        Date of delivery of Judgment             ::   21.02.2022


                                                 BEFORE

                               HON'BLE THE CHIEF JUSTICE MR. SANJAY KUMAR


                                                 JUDGMENT

Chapter XVII of the Negotiable Instruments Act, 1881, was

inserted therein by the Banking, Public Financial Institutions and Negotiable

Instruments Laws (Amendment) Act, 1988 (Act 66 of 1988), with effect from

01.04.1989. Thereby, the Parliament converted civil liability vis-à-vis causing

deliberate dishonour of one's own cheques into a culpable offence with the

intendment of enhancing acceptability of cheques. Section 138, in this chapter,

Cril.Petn. No.39 of 2021 Page 1 details dishonour of a cheque for insufficiency of funds in the account etc. as an

offence and prescribes the punishment therefor in the form of imprisonment or

fine or both. Sections 139 to 147, as they presently stand, are machinery

provisions dealing with various aspects, including the manner and method of

how cognizance is to be taken of this offence.

While so, akin to the Lernaean Hydra of Herculean lore, tricky

questions of procedure and jurisdiction in relation to this offence continue to

raise their troublesome heads before the Courts despite the lapse of over three

decades. The case on hand is an instance.

[2] By way of this petition filed under Section 482 Cr.P.C., the

petitioner seeks quashing of Criminal (N.I.) Case No.12 of 2021 filed against

him before the learned Chief Judicial Magistrate, Imphal West, along with the

orders dated 09.02.2021 and 04.03.2021 passed therein, whereby process was

issued against him. The said complaint case was filed by respondent No.1

through respondent No.2, her power of attorney holder, under Sections 138 and

141 of the Negotiable Instruments Act, 1881 (hereinafter, 'the Act of 1881'). The

case of the complainant was that the respondent therein, the petitioner in this

criminal petition, had issued in her name cheque bearing No.000156 dated

04.03.2020, drawn on RBL Bank at New Delhi, for a sum of `5 lakh but when

she deposited the said cheque at the Yes Bank Branch at Naraina Vihar in New

Delhi for being credited to her bank account bearing No.05499300000605 in the

Yes Bank Branch at Thangal Bazar, Imphal, it was dishonoured on the ground

of 'insufficient funds'. The complainant stated that Demand Notices dated

16.03.2020 were sent to the petitioner herein at both his known addresses, one

at S-206, Panchasheel Park, New Delhi, and the other at Farm No.16, Defodil

Cril.Petn. No.39 of 2021 Page 2 Lane, Satbari, Chatarpur, Delhi. As he failed to pay the amount due under the

cheque within 15 days, as stipulated in the statute, she approached the Court of

the learned Chief Judicial Magistrate, Imphal West (hereinafter, 'the Trial

Court'), through her power of attorney holder, by way of the subject complaint.

Process was issued by the Trial Court against the petitioner herein under the

orders dated 09.02.2021 and 04.03.2021. Aggrieved by these developments, he

filed the present quash petition.

[3] An interim order was passed by this Court on 20.12.2021 to the

effect that the warrant issued against the petitioner by the Trial Court should not

be executed and leaving it open to him to appear before the Trial Court through

video conferencing. However, the petition averments disclose that the bailable

warrant issued against the petitioner by the Trial Court was cancelled in

October, 2021, subject to his furnishing a bail bond for a sum of `50,000/-

along with one local surety for a like sum. Be that as it may.

[4] Heard Mr. Th.Mahira, learned counsel for the petitioner; and

Mr. Mangsatabam Rarry, learned counsel, appearing for the respondents.

[5] Mr. Th.Mahira, learned counsel, would contend that the Trial Court

does not have territorial jurisdiction to entertain the complaint case and proceed

against the petitioner. He would point out that respondent No.1 resides at Delhi

and presented the subject cheque at the Yes Bank Branch at Naraina Vihar,

New Delhi. He would state that the bank account at Imphal was opened by

respondent No.1 only 11 days before the presentation of the cheque and

contend that the same demonstrates that she is abusing the process of law,

knowing fully well that the parties were both permanent residents of Delhi.

Learned counsel would also contend that there was a defect in the complaint

Cril.Petn. No.39 of 2021 Page 3 case as no mention was made therein as to the petitioner receiving the Demand

Notices dated 16.03.2020 issued by respondent No.1 after dishonour of the

cheque. He would argue that the petitioner never received the said notices and

in the absence of proof of receipt thereof, the complaint case was liable to be

rejected straightaway. He would assert that the entire exercise was engineered

by respondent No.1 to harass the petitioner, a resident of Delhi, and that the

subject complaint case and the orders passed therein are liable to be quashed

by this Court in exercise of inherent power under Section 482 Cr.P.C.

[6] Per contra, Mr. Mangsatabam Rarry, learned counsel, would

assert that the subject cheque was issued by the petitioner herein in discharge

of a legal liability and the same was deposited by respondent No.1 for being

credited to her bank account in the Yes Bank Branch at Thangal Bazar, Imphal,

situated within the jurisdiction of the Trial Court. He would assert that, in terms

of the legal position obtaining under the provisions of the Act of 1881 and the

law declared in that regard by the Supreme Court, the Trial Court has territorial

jurisdiction to adjudicate the complaint case. He would further assert that two

demand notices were sent to the petitioner's known addresses at New Delhi

and Delhi and the same would be sufficient in law. He would point out that the

address of the petitioner in the cause title of this criminal petition is the same as

the one to which a demand notice was sent, viz., S-206, Panchasheel Park,

New Delhi, and contend that the petitioner cannot deny receipt thereof. He

would argue that no grounds are made out to hold that the Trial Court lacks

territorial jurisdiction and pray for rejection of this quash petition.

Both the learned counsel relied on case law in support of their

respective contentions.

Cril.Petn. No.39 of 2021                                                      Page 4
 [7]           Section 138 of the Act of 1881 provides that when a cheque

drawn by a person on a bank account maintained by him for payment of any

amount of money to another person from out of that account for the discharge

of any legally enforceable debt or other liability is returned by the bank unpaid,

either because the amount of money in that account is insufficient to honour the

cheque or it exceeds the amount arranged to be paid from that account, such

person shall be deemed to have committed an offence and would be punishable

with imprisonment for a term which may extend to two years or with fine or with

both. Under clause (a) of the proviso thereunder, it is stated that nothing in the

Section shall apply unless the cheque is presented to the bank within six

months from the date on which it is drawn or within the period of its validity,

whichever is earlier. Clause (b) of the proviso states that nothing in the Section

shall apply unless the payee or the holder in due course makes a demand for

payment of the said amount of money by giving a notice in writing to the drawer

of the cheque within 30 days of the receipt of information by him from the bank

regarding the return of the cheque as unpaid. Clause (c) of the proviso states

that nothing in the Section shall apply unless the drawer of such cheque fails to

make the payment of the said amount of money to the payee or holder in due

course within 15 days of the receipt of the said notice.

It is now a settled proposition that the offence under Section 138

occurs upon the dishonour of the cheque but prosecution in relation to such

offence is postponed, by virtue of the provisos, till the failure of the drawer of the

cheque to make payment within 15 days of receiving the demand notice.

[8] Section 142(1) of the Act of 1881 states to the effect that

notwithstanding anything contained in the Code of Criminal Procedure, 1973, -

Cril.Petn. No.39 of 2021 Page 5

(a) no Court shall take cognizance of any offence punishable under Section 138

except upon a complaint, in writing, made by the payee or the holder in due

course of the cheque; (b) such complaint is made within one month of the date

on which the cause of action arises under clause (c) of the proviso to Section

138; and (c) no Court inferior to that of a Metropolitan Magistrate or a Judicial

Magistrate of the First Class shall try an offence punishable under Section 138.

Be it noted that Section 142(1) was originally Section 142 in the

Act of 1881. However, the statute was amended by the Negotiable Instruments

(Amendment) Act, 2015 (Act 26 of 2015), and, inter alia, Sections 142(2) and

142A were also inserted therein. These amended provisions came into effect

from 15.06.2015. After such amendment, the original Section 142 was

renumbered as Section 142(1). The newly added Section 142(2) states that the

offence under Section 138 shall be inquired into and tried only by a Court within

whose local jurisdiction - (a) if the cheque is delivered for collection through an

account, the branch of the bank where the payee or holder in due course, as

the case may be, maintains the account, is situated; or (b) if the cheque is

presented for payment by the payee or holder in due course, otherwise than

through an account, the branch of the drawee bank where the drawer maintains

the account is situated. The 'Explanation' thereto states that for the purpose of

clause (a), where a cheque is delivered for collection at any branch of the bank

of the payee or holder in due course, then, the cheque shall be deemed to have

been delivered to the branch of the bank in which the payee or holder in due

course maintains the account.

[9] The newly added Section 142A is titled 'Validation for transfer of

pending cases'. Section 142A(1) states that notwithstanding anything contained

Cril.Petn. No.39 of 2021 Page 6 in the Code of Criminal Procedure, 1973, or any judgment, decree, order or

direction of any Court, all cases transferred to the Court having jurisdiction

under Section 142(2), as amended by the Negotiable Instruments (Amendment)

Ordinance, 2015 (Ordinance 6 of 2015), shall be deemed to have been

transferred under this Act, as if that sub-section had been in force at all material

times. The other sub-sections of Section 142A are of no relevance presently.

[10] Prior to amendment of the Act of 1881 in 2015, plenty of

controversy prevailed on various issues pertaining to Section 138, including

territorial jurisdiction. Plethora of case law emanated on the subject.

In K.Bhaskaran vs. Sankaran Vaidhyan Balan and another

[(1999) 7 SCC 510], a 2-Judge Bench of the Supreme Court held that an

offence under Section 138 of the Act of 1881 has five components: (1) drawing

of the cheque, (2) presentation of the cheque to the bank, (3) returning of the

cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of

the cheque demanding payment of the cheque amount, and (5) failure of the

drawer to make payment within 15 days of the receipt of the notice. It was held

that any Court having jurisdiction over the territorial limits wherein any of the five

acts that constitute the components of the offence occurred would have the

jurisdiction to deal with the case. It was further elaborated that if the five acts

were done in five different areas, any one of the Courts exercising jurisdiction in

those five areas would have jurisdiction and the complainant can choose any

one of those Courts. Territorial jurisdiction under Sections 177, 178 and 179 of

the Code of Criminal Procedure, 1973, was also considered. The Bench held

that Section 138 required the making of a demand by the payee through a

notice and the thrust in the provision is on the need to make a demand and

Cril.Petn. No.39 of 2021 Page 7 once a notice is dispatched, his part is over. The Bench held that if a strict

interpretation is given that the drawer should have actually received the notice

for the period of 15 days to start running, a trickster cheque drawer would get

the premium to avoid receiving the notice by different strategies and could

escape from the legal consequence of Section 138. Thus, when a notice is

returned by the sendee as unclaimed such date, per the Supreme Court, would

be the commencement date for reckoning the period of 15 days contemplated in

clause (c) to the proviso in Section 138. Such reckoning was held to be without

prejudice to the right of the drawer of the cheque to show that he had no

knowledge that the notice was brought to his address.

[11] In Harman Electronics Private Limited and another vs.

National Panasonic India Private Limited [(2009) 1 SCC 720], another

2-Judge Bench of the Supreme Court again considered territorial jurisdiction of

a Court to try an offence under Section 138 of the Act of 1881. In that case, the

cheque was issued at Chandigarh and was presented at Chandigarh. The

complainant, however, issued the demand notice from Delhi and the same was

served upon the drawer of the cheque at Chandigarh. The case was instituted

by the complainant at Delhi. In this situation, having considered the earlier

decision in K.Bhaskaran (supra), the Supreme Court stated that it is one thing

to say that sending of the notice is one of the ingredients for maintaining a

complaint but it is another thing to say that dishonour of the cheque, by itself,

constitutes an offence. According to the Supreme Court, receipt of the demand

notice would ultimately give rise to the cause of action for filing a complaint.

Issuance of the notice would not, by itself, give rise to a cause of action but

communication of the notice would. The Bench held that for constituting an

Cril.Petn. No.39 of 2021 Page 8 offence under Section 138, the notice must be received by the accused though

it may be deemed to have been received in certain situations. The Bench

therefore held that the Delhi Court had no jurisdiction to try the case.

[12] Earlier, in Shri Ishar Alloy Steels Limited vs. Jayaswals Neco

Ltd. [(2001) 3 SCC 609], a 3-Judge Bench of the Supreme Court considered

clause (a) of the proviso to Section 138 of the Act of 1881. The facts of that

case were as follows: The appellant had issued a cheque to the respondent on

21.07.1997 and the respondent presented it to its bank on 20.01.1998. In turn,

the said bank presented it to the drawee bank on 24.01.1998. By that date, six

months had elapsed since the date mentioned on the cheque. The cheque was

returned unpaid by the drawee bank on that ground. A cheque bouncing case

having been filed, the appellant's contention was that the cheque had been

presented beyond the period of six months and, therefore, no offence was

made out. However, the High Court held that presentation of the cheque to the

collecting bank within six months was sufficient to maintain the complaint.

Reversing that view, the Supreme Court opined that, to make out an offence

under Section 138 of the Act of 1881, a cheque has to be presented to the

drawee bank within the six months period and, therefore, presentation to the

collecting bank within that period would not suffice. The decision in

K.Bhaskaran (supra) was not considered by the 3-Judge Bench as it was on a

different issue altogether.

[13] Again, in Nishant Aggarwal vs. Kailash Kumar Sharma [(2013)

10 SCC 72], a 2-Judge Bench of the Supreme Court considered the issue of

territorial jurisdiction of Courts to try offences under Section 138 of the Act of

1881. This decision followed K.Bhaskaran (supra) on the point that a

Cril.Petn. No.39 of 2021 Page 9 complaint could be filed in a Court that had jurisdiction over the place of

presentation of the cheque though the drawer did not reside there. Significantly,

the Bench went on to hold that the commission of the offence would be

complete only on service of the demand notice and consequent failure on the

part of the drawer to pay the demanded amount within the stipulated 15 days. In

effect, the Bench held that issuance of the demand notice would not, by itself,

give rise to a cause of action but communication of the notice would. Harman

Electronics Private Limited (supra) was also considered and affirmed.

[14] In M/s Escorts Limited vs. Rama Mukherjee [(2014) 2 SCC

255], the same 2-Judge Bench had occasion to again consider the question of

territorial jurisdiction of Courts in relation to Section 138 of the Act of 1881.

Relying on its earlier decision in Nishant Aggarwal (supra), the Bench held that

Courts within whose jurisdiction the cheque is presented and dishonoured

would also have jurisdiction to try the offence. In that case, the cheque was

issued in Kolkata and presented in Delhi. As it was dishonoured, notice was

issued from Delhi and proceedings were finally initiated at Delhi. The High

Court, however, held that the Delhi Court did not have jurisdiction and asked the

complainant to prosecute his case before the Kolkata Court. Disagreeing with

this view, the Supreme Court affirmed that the Court within whose jurisdiction

the dishonoured cheque was presented for encashment would also have

jurisdiction to try the case. In effect, K.Bhaskaran (supra) was again reaffirmed.

[15] The dichotomy between the views taken in K.Bhaskaran (supra)

and later decisions, including Harman Electronics Private Limited (supra),

was resolved by a 3-Judge Bench of the Supreme Court in Dasarath

Rupsingh Rathod vs. State of Maharastra and another [(2014) 9 SCC 129].

Cril.Petn. No.39 of 2021 Page 10 Having considered the gamut of precedential law on the issue of territorial

jurisdiction, the Bench summed up that the offence under Section 138 of the Act

of 1881 is committed no sooner the cheque is returned unpaid for insufficiency

of funds or for the reason that the amount exceeds the arrangement made with

the bank. However, per the Bench, cognizance of such offence is forbidden

under Section 142 of the Act of 1881 till a complaint, in writing, is made by the

payee or holder of the cheque in due course within one month from the date the

cause of action accrues under clause (c) of the proviso to Section 138. The

Bench further held that the facts constituting the cause of action would not

constitute the ingredients of the offence and the proviso to Section 138 simply

postpones/ defers institution of criminal proceedings and taking of cognizance

by the Court till such time the cause of action, in terms of clause (c) of the

proviso, accrues to the complainant. Once that cause of action accrues to the

complainant, per the Supreme Court, the jurisdiction of the Court to try the case

will be determined by reference to the place where the cheque is 'dishonoured'.

According to the Supreme Court, prosecution in such a case can be launched

against the drawer of the cheque only before the Court within whose jurisdiction

the 'dishonour' takes place, except in situations where the offence is committed

along with other offences in a single transaction. It was finally held that the

place, situs, or venue of judicial enquiry and trial of the offence must logically be

restricted to where the drawee bank is located as the dishonour of the cheque

takes place when the said bank returns the cheque unpaid.

[16] The curial wisdom expressed in the aforesaid decisions was in the

context of the Act of 1881 prior to the amendments effected therein by the

Negotiable Instruments (Amendment) Act, 2015.

Cril.Petn. No.39 of 2021 Page 11 In Bridgestone India Private Limited vs. Inderpal Singh [(2016)

2 SCC 75], a 2-Judge Bench of the Supreme Court considered the amended

provisions of the Act of 1881 and more particularly, the newly added Sections

142(2) and 142A, in the context of territorial jurisdiction in relation to an offence

under Section 138 of the Act of 1881. In that case, the cheque was issued by

Inderpal Singh at Chandigarh and was presented by Bridgestone India Pvt. Ltd.,

the company, for being credited to its bank account in Indore. Upon dishonour

of the cheque on account of 'exceeding arrangement', the company issued a

demand notice but Inderpal Singh failed to pay the amount within the stipulated

period. The company thereupon initiated proceedings against Inderpal Singh

before the Court at Indore under Section 138 of the Act of 1981. Inderpal Singh

raised the issue of territorial jurisdiction and the matter ultimately came before

the Supreme Court. Reliance was placed by Inderpal Singh on Dashrath

Rupsingh Rathod (supra), which held to the effect that the Court at the place

where the cheque is dishonoured, viz., where the bank on which the cheque is

drawn is located, would alone have jurisdiction to try the case under Section

138 of the Act of 1881. However, the company relied on the amended

provisions of the Act of 1881 to overcome the legal position declared in

Dashrath Rupsingh Rathod (supra). By virtue of these amended provisions

and more particularly, Sections 142(2) and 142A, the Supreme Court observed

that there was no room for any doubt that, with reference to an offence under

Section 138 of the Act of 1881, the place where the cheque is delivered for

collection, i.e., the branch of the bank of the payee or the holder in due course,

where the drawee maintains an account, would be determinative of territorial

jurisdiction. Observing that it was imperative for the present controversy that the

Cril.Petn. No.39 of 2021 Page 12 company overcomes the legal position declared in Dashrath Rupsingh

Rathod (supra) as well as the provisions of the Code of Criminal Procedure,

1973, the Supreme Court referred to Section 4 of the Negotiable Instruments

(Amendment) Second Ordinance, 2015, whereby Section 142A was inserted in

the Act of 1881. Perusal of Section 4(1) thereof, per the Supreme Court, left no

room for doubt that in so far as an offence under Section 138 of the Act of 1881

is concerned, on the issue of jurisdiction, provisions of the Code of Criminal

Procedure, 1973, would have to give way to the provisions of the instant

enactment on account of the non-obstante clause in Section 142A(1) and

likewise, any judgment, decree, order or direction issued by a Court would have

no effect in so far as the territorial jurisdiction for initiating proceedings under

Section 138 of the Act of 1881 is concerned. In that view of the matter, it was

observed that the judgment rendered in Dashrath Rupsingh Rathod (supra)

would not non-suit the company. The Bench voiced complete agreement with

the contention advanced by the company in this regard and expressed

satisfaction that Section 142(2)(a) of the Act of 1881 vested jurisdiction for

initiating proceedings for an offence under Section 138 in the Court where the

cheque is delivered for collection (through an account of the branch of the bank

where the payee or holder in due course maintains an account). The Bench

also recorded satisfaction, based on Section 142A(1), that Dashrath

Rupsingh Rathod (supra) would not stand in the way of the company in so far

as territorial jurisdiction for initiating proceedings was concerned. The appeal

was accordingly allowed.

The view expressed in Bridgestone India Pvt. Ltd. (supra) finds

affirmation in the later judgment of the Supreme Court in M/s Himalaya Self

Cril.Petn. No.39 of 2021 Page 13 Farming Group and another vs. M/s Goyal Feed Suppliers [Transfer

Petition (Criminal) No.273 of 2020, decided on 16.09.2020].

[17] In the case on hand, it is not in dispute that respondent No.1 has a

bank account at the Yes Bank Branch in Thangal Bazar, Imphal. The date of

opening of the said account does not have bearing on that irrefutable fact. The

subject cheque was deposited at a Delhi Branch of Yes Bank for being credited

to the said account. Mere presentation of the cheque at a Delhi Branch has no

impact whatsoever in the light of the 'Explanation' to Section 142(2)(a), which

categorically states that even if the cheque is delivered in any other branch of

the bank of the payee, it shall be deemed to have been delivered to the branch

where the payee actually maintains an account. Therefore, presentation of the

cheque at a Delhi Branch of Yes Bank is of no import at all.

In the light of the amended provisions of the Act of 1881 and more

so, Section 142(2)(a), and the edicts of the Supreme Court in relation thereto in

Bridgestone India Pvt. Ltd. (supra) and M/s Himalaya Self Farming Group

(supra), it cannot be doubted that institution of the complaint case before the

Trial Court was strictly in accordance with law, as obtaining presently. The Trial

Court has jurisdiction over the area in which respondent No.1 maintains her

bank account, being the account to which the cheque amount was to be

credited. Therefore, the Trial Court clearly has territorial jurisdiction to entertain

and deal with the matter.

[18] As regards service of the demand notice in terms of the statutory

requirement, it may be noted that one of the Demand Notices dated 16.03.2020

was addressed to the petitioner at S-206, Panchsheel Park, New Delhi, 110017,

which is shown as his address in the cause title of this criminal petition. Notably,

Cril.Petn. No.39 of 2021 Page 14 it is not even his case that he did not receive the same. He merely stated in

paragraph No.2(d) of this petition that nothing was mentioned in the impugned

complaint about the date on which the said notices were received by him. There

is no denial, as such, by him of actual receipt of the demand notice. Such denial

came only during the course of oral arguments. At this stage, it would be

apposite to note the case law on the issue of service of a demand notice.

[19] In D.Vinod Shivappa vs. Nanda Belliappa [(2006) 6 SCC 456],

a 2-Judge Bench of the Supreme Court considered the issue of service of the

demand notice in relation to Section 138 of the Act of 1881. It was observed

therein that the drawer of the cheque makes himself liable for prosecution under

Section 138 of the Act of 1881 if he fails to make payment within 15 days of the

receipt of the demand notice given by the drawee and his failure to make such

payment gives rise to the cause of action to the complainant to prosecute him

under the said provision. It was pointed out that it is not the 'giving' of the

demand notice but it is the failure to pay after 'receipt' of the demand notice by

the drawer which gives rise to the cause of action to the complainant to file a

complaint within the statutory period. In this regard, the Court observed that it is

no doubt true that the receipt of the demand notice has to be proved but if the

notice is refused by the drawee, it may be presumed to have been served.

Elaborating further, the Supreme Court observed that in a case where the

demand notice is not claimed, even though served by registered post, the

drawer of the cheque may be called upon to rebut the presumption which arose

in favour of service of the notice with the aid of Section 27 of the General

Clauses Act, 1897 (hereinafter, 'the Act of 1897'). The Supreme Court however

cautioned that no rule of universal application can be laid down that in all cases

Cril.Petn. No.39 of 2021 Page 15 where notice is not served on account of non-availability of the addressee, the

Court must presume service of notice. These observations were made in the

context of a person who dodges the postman for about a month or two or a

person who can get a fake endorsement made regarding his non-availability

and can successfully avoid his prosecution, as the payee is bound to issue

notice to him within a period of 30 days from the date of receipt of information

about the dishonour of the cheque. The Supreme Court further pointed out that

it is a matter of evidence and proof and even in a case where the demand

notice is returned with the endorsement that the premises were found locked or

the addressee was not available, it would be open to the complainant to prove

at the trial, by evidence, that the endorsement was not correct and that the

addressee, with knowledge of the notice, had deliberately avoided to receive

the same. Applying the purposive construction or mischief rule propounded in

Heydon's case [(1584) 76 ER 637], it was held that in interpreting a statute the

Court must adopt that construction which suppresses the mischief and

advances the remedy. In effect, the Supreme Court held that the question as to

whether service of notice has been fraudulently refused by unscrupulous means

and whether there was deemed service of the notice is essentially a question of

fact and that must be considered in the light of the evidence on record. In such

circumstances, per the Supreme Court, it would be premature for the High

Court to quash the proceedings at the stage of issuance of process, under

Section 482 Cr.P.C..

[20] In C.C.Alavi Haji vs. Palapetty Muhammed and another

[(2007) 6 SCC 555], a 3-Judge Bench of the Supreme Court dealt with the

requirement of giving a demand notice under Section 138 of the Act of 1881.

Cril.Petn. No.39 of 2021 Page 16 The matter came before the 3-Judge Bench in view of the reference made by a

2-Judge Bench on the ground that, in D.Vinod Shivappa (supra), the Court

had not taken into consideration the presumption arising under Section 114 of

the Evidence Act, 1872 (hereinafter, 'the Act of 1872'). The referring Bench was

of the opinion that as the presumption under Section 114 is a rebuttable one,

the complaint should necessarily contain averments to raise a presumption of

service of the notice, meaning thereby, it would not be sufficient for the

complainant to merely state that the notice was sent by registered post and was

returned with the endorsement 'out of station' and there must be a further

averment that the addressee/drawer had deliberately evaded receiving the

notice or that the addressee had knowledge of the notice. However, the

3-Judge Bench held that there is no necessity of making an averment in the

complaint 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. It was further held that

once a notice is sent by correctly addressing the drawer of the cheque, service

of notice is deemed to have been effected. Reference was made by the Bench

to Section 27 of the Act of 1897, which gives rise to a presumption that service

of notice has been effected when it is sent to the correct address by registered

post, and it was held that once this act has been referred to in the complaint, it

is unnecessary for the complainant to further aver that it is deemed to have

been served or that the addressee is deemed to have knowledge of the notice.

Per the Bench, 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. It was observed that

any drawer who claims that he had not been served with the notice can, within

Cril.Petn. No.39 of 2021 Page 17 15 days of the receipt of the summons from the Court in respect of the

complaint filed under Section 138 of the Act of 1881, make payment of the

cheque amount and submit to the Court that he had made such payment within

15 days of the receipt of the summons and, therefore, the complaint is liable to

be rejected. It was further observed that a person, who does not pay the cheque

amount within 15 days of the receipt of the summons from the Court, cannot

thereafter contend that there was no proper service of the demand notice as

required under Section 138, by ignoring the statutory presumption to the

contrary under Section 27 of the Act of 1897 and Section 114 of the Act of

1872. In that case, there was no averment in the complaint that the demand

notice had even been sent to the correct address of the drawer. However, the

returned envelope was annexed to the complaint and the same showed that the

notice had been sent by registered post to the correct address and was

returned with the endorsement 'addressee abroad'. On these facts, the

Supreme Court held that the requirement of Section 138 of the Act of 1881 as to

service of a demand notice had been sufficiently complied with.

Be it noted that in Dashrath Rupsingh Rathod (supra), the

supplementing judgment of Hon'ble Mr. Justice T.S.Thakur, as the learned

Judge then was, specifically referred to C.C.Alavi Haji (supra) but no

discordant note or distinguishing on facts was made by that co-ordinate Bench

in relation to the ratio recorded therein.

[21] In the light of the law laid down by the Supreme Court in

C.C.Alavi Haji (supra), a presumption arises as to the service of the demand

notice upon the petitioner as the address was shown correctly and there is no

evidence of the said notice being returned unserved. Further, as pointed out in

Cril.Petn. No.39 of 2021 Page 18 the said decision, this is a matter for evidence and cannot constitute a ground

for non-suiting the complainant at the threshold. It is for the petitioner to rebut

the statutory presumptions in this regard with satisfactory evidence.

[22] On the above analysis, this Court finds that the learned Chief

Judicial Magistrate, Imphal West, has territorial jurisdiction to entertain, try and

adjudicate the subject complaint case and the pleas to the contrary by the

petitioner, on all counts, are bereft of merit.

No grounds are made out for exercising inherent power under

Section 482 Cr.P.C. to quash and set aside the subject complaint case or the

orders passed therein.

The criminal petition is accordingly dismissed.

Interim order shall stand vacated.

A copy of this order shall be supplied online/through WhatsApp to

both the learned counsel.

                                                        CHIEF JUSTICE

FR
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