AI Structured Summary
Not yet generated for this judgment
Judgment
Hon''ble Sri Justice G. Krishna Mohan Reddy
These petitions are filed to quash proceedings in C.C. No. 330 of 2009 (CC) on the file of the Court of III Additional Judicial Magistrate of First Class, Warangal and S.T.C. No. 40 of 2010 (STC) on the file of the Court of Special Judicial Magistrate of First Class for Prohibition and Excise, Kadapa, registered for offence punishable u/s 138 of the Negotiable Instruments Act, 1881 (for short ''the Act''). For convenience sake, I refer the parties as arrayed in the CC and STC. In both these matters, there is a common question as to whether return of notices addressed to the accused with endorsement "addressee was not available" would amount to sufficient compliance of the service of notices for the purpose of filing complaint and prosecuting the accused u/s 138 of the Act respectively.
It is contended on behalf of the accused that by virtue of Section 138 N.I. Act, the notices said to be sent to the accused should have been served upon them for the purpose of taking necessary action under that provision subject to complying with the other relevant formalities enshrined thereunder. On the other hand, no doubt by virtue of Section 27 of the General Clauses Act, 1897, when a notice was sent to a person giving proper address of him that would give a presumption of proper service of the notice upon him but that presumption stood rebutted when the notice was returned with endorsement "addressee was not available", as it clearly envisages that there was no service of notice upon him. He has placed reliance upon the decisions in A. Sudershan Vs. Mannen (Shabir) and Another, and Rahul Builders Vs. Arihant Fertilizers and Chemical and Another, in support of his contention.
Learned counsel for the complainant has contended that by virtue of Section 27 of the General Clauses Act mere sending the notice to the proper address of the accused would be suffice of the proper compliance whereas the return of the notice with the endorsement "The addressee was not available" is not suffice to rebut that presumption.
Therefore, it is to be seen as to whether proper service of the notices took place or whether there are grounds to quash the proceedings.
It is necessary to extract Section 138 of N.I. Act and also Section 27 of the General Clauses Act for proper appreciation of the matter.
Section 138 of the N.I. Act enjoins;
Dishonour of cheque for insufficiency, etc., of funds in the account Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for 3 (8) 8. Substituted by The Negotiable Instruments (Amendment and Miscellaneous Provisions) Act. 2002. (Act 55 of 2002) [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it was drawn or within the period of its validity, whichever is earlier.
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said 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 the return of the cheque as unpaid, and
(c) the drawer of such cheque fails to make the 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.
Explanation-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
Section 27 of the General Clauses Act enjoins;
Meaning of service by post-Where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.
Clause (b) of Section 138 of the N.I. Act clearly postulates making of a demand for the payment of the money due by giving a notice in writing to the drawer of the cheque within thirty days of the receipt of necessary information from the bank concerned regarding the return of the cheque as unpaid. On the other hand Section 27 of the General Clauses Act contemplates that when a document is required to be served by post as per law unless a different intention appears the service shall be deemed to be effected by properly addressing, prepaying and posting by registered post a letter containing the document unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post. It is open to the accused concerned to rebut the presumption placing necessary evidence. It is not as if that for all practical purposes the Court has to presume and proceed that the notice was served as required by law without going into the question of its reputability .Thereby in the present context the statutory notice sent to the accused shall be deemed to have been served upon him unless the contrary is proved to have been effected at the time at which the letter was expected to be delivered in the ordinary course of post. In the present context of the return of the cover by which the statutory notice was sent with endorsement "Addressee was not available", it is to be examined as to whether it is proper to discuss about the sustainability of the presumption just on the basis of the apparent consideration of the available record and without adducing necessary evidence.
In Rahul Builder''s case, learned Supreme Court considered the ambit of an imperfect notice given. In that regard, the Supreme Court observed: "Service of a notice, it is trite, is imperative in character for maintaining a complaint. It creates a legal fiction. Operation of Section 138 of the Act is limited by the proviso. When the proviso applies, the main Section would not. Unless a notice is served in conformity with Proviso (b) appended to Section 138 of the Act, the complaint petition would not be maintainable. The Parliament while enacting the said provision consciously imposed certain conditions. One of the conditions was service of a notice making demand of the payment of the amount of cheque as is evident from the use of the phraseology "payment of the said amount of money". Such a notice has to be issued within a period of 30 days from the date of receipt of information from the bank in regard to the return of the cheque as unpaid."
In G.S. Srikanth, MD, Talavadi Rock and Mineral Products, Madras and others Vs. Sri Lakshmi Financiers and Others, (AP) a notice was said to have been sent by unregistered post to the accused concerned therein u/s 138 of N.I. Act, but on the basis of the evidence adduced it was found that there was no definite basis to record any finding as to whether in fact the notice was sent to the accused under registered post with acknowledgement due. In those circumstances the question of drawing of presumption was raised by virtue of Section 27 of the General Clauses Act, but the Supreme Court held that it was not possible to do so when it was doubtful that the notice in fact was sent to the accused. This observation is for a different consideration to apply It here.
In A. Sudershan''s case, a notice was sent u/s 138 of N.I. Act to the accused in that case on the ground of dishonour of a cheque issued in respect of a legally enforceable debt, but it was returned with endorsement "party continuously absent for (7) days". Considering various aspects of the case, this Court observed as follows. "From the combined reading of clauses (b) and (c) of section 138 of the Negotiable Instruments Act, it is clear that unless a notice in writing is received by the drawer of such a cheque the offence would not be constituted. Therefore, the receipt of notice is absolutely necessary as a precondition for constituting such an offence. The act of giving a notice contemplated by section 138 of the Negotiable Instruments Act means actually serving the notice in terms of section 27 of the General Clauses Act, 1897. In other words even if there is any ambiguity regarding what constitutes service of notice u/s 138 of the Negotiable Instruments Act, section 27 of the General Clauses Act, 1897, has clarified the position of law. From the reading of Section 27 of the General Clauses Act, 1897, it is clear that where any document under a Central Act is required to be served by post, such a service shall be effected by delivering the same in the ordinary course of post. It further makes it clear that unless a different intention appears as per any Act or regulation, such a service shall be deemed to be effected by properly addressing prepaying and posting by registered post. In other words, if such a document is sent by registered post and if it does not return back it is deemed to have been served. But such a presumption is a rebuttable presumption and it is always open to the addressee to prove that in fact he did not receive such a registered post. It is only having regard to this kind of presumption found u/s 27 of the General Clauses Act, 1897, and also similar presumption found u/s 114 of the Indian Evidence Act, the Courts in India have presumed the service of such a notice or document when such a registered post is not returned back."
Ultimately in view of the return of the notice with an endorsement "The party continuously absent for seven days" it was held that the presumption was rebutted. In other words on the apparent consideration of the relevant record available and without contemplating the necessity of adducing necessary evidence to ascertain the question of rebuttal of the presumption on that basis such a finding was given. In my considered opinion the question of rebuttal of the presumption can be better analysed and determined on the basis of necessary evidence to be adduced.
In Aparna Agencies, Hyderabad Vs. P. Sudhakar Rao and another, ] a notice was sent, but the addressee was not found for seven days following which it was returned with endorsement to that effect, this Court over-ruling the principle laid down in A. Sudershan''s case, held as follows: "I read the relevant provisions viz., Section 27 of the General Clauses Act and Section 114(e) of Evidence Act again and again with a view to see whether the interpretation in the underlined sentence is possible or not. In my considered opinion the qualification that ''if the registered cover does not return back'' is not at all contemplated by the above provisions. The plain meaning of the above provision is that service shall be deemed to be effected by (1) properly addressing; (2) pre-paying and (3) posting by registered post. These are the 3 requirements for invoking Section 27 of the General Clauses Act and nothing more. There is no requirement of that cover not returning back for raising a presumption. It is seen that the judgments of the Apex Court cited M/s. Madan and Co. Vs. Wazir Jaivir Chand, M/s. Attabira Regulated Market Committee Vs. M/s. Ganesh Rice Mills, and Indian Bank Vs. Datla Venkata Chinna Krishnam Raju, are not brought to the notice of the learned Judge especially the judgment Indian Bank v. Datla Venkata Chinna Krishnam Raju (7 supra), wherein the registered cover was in fact returned and yet the presumption of deemed service was raised. I am sure that if the above authorities were brought to the notice of the Hon''ble Judge, his view would have been different. Hence, with all respect I hold that the above judgment is per incuriam."
Thus it was held that the plain meaning of the provision provided that the service should be deemed to have been effected by (1) proper addressing (2) prepaying and (3) posting by registered post to attract that provision emphasizing that the return of the cover along with the acknowledgement due with the postal endorsement "Addressee was not available" was not suffice to rebut the presumption. If that is the position the question of rebuttal of the presumption may not arise which is against the concept that a legal presumption set up is always rebuttable. No observation which is against that which is recognized by statute and which accordingly is enforceable is acceptable because by doing so the relevant statutory provision becomes redundant. Significantly such a finding was arrived at by the learned Judge while following the judgments rendered by the Apex Court mentioned supra.
In Attabira Regulated Market Committee''s case and Indian Bank''s case this aspect in fact was not at all considered. In D. Vinod Shivappa''s case under similar circumstances learned Division Bench of the Supreme Court exhaustively dealt with the possibility of the addressee doing the mischief of avoiding to receive the statutory notice while examining the question presumption. It is held by the Supreme Court that the return of a notice with endorsement "the addressee was not available" needed to be examined to ascertain whether the addressee managed to return the notice with that endorsement by reason of which it was not proper to quash the proceedings on that ground that being premature at that stage. If a notice is issued and served upon the drawer of the cheque, no controversy arises. Similarly if the notice is refused by the addressee, it may be presumed to have been served. This is also not disputed. This leaves us with the third 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. 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. 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. There is good authority to support the proposition that once the complainant, the payee of the cheque, issues notice to the drawer of the cheque, the cause of action to file a complaint arises on the expiry of the period prescribed for payment by the drawer of the cheque. IF he does not file a complaint within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138 of the Act, his complaint gets barred by time. Thus, a person who can dodge the postman for about a 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 notice to him within a period of 30 days from the date of receipt of information from the bank regarding the return of the cheque as unpaid. He is, therefore, bound to issue the legal notice which may be returned with an endorsement that the addressee is not available on the given address. We cannot also lose sight of the fact that the drawer may by dubious means manage to get an incorrect endorsement made on the envelope that the premises has been found locked or that the addressee was not available at the time when postman went for delivery of the letter. It may be that the address is correct and even the addressee is available but a wrong endorsement is manipulated by the addressee. In such a case, if the facts are proved, it may amount to refusal of the notice. If the complainant is able to prove that the drawer of the cheque knew about the notice and deliberately evaded service and got a false endorsement made only to defeat the process of law, the court shall presume service of notice. This, however, is a matter of evidence and proof. Thus even in a case where the notice is returned with the endorsement that the premises has always been found locked or the addressee was not available at the time of postal delivery, it will be open to the complainant to prove at the trial by evidence that the endorsement is not correct and that the addressee, namely the drawer of the cheque, with knowledge of the notice had deliberately avoided to receive notice. Therefore, it would be pre-mature at the stage of issuance of process, to move the High Court for quashing of the proceeding u/s 482 of the Code of Criminal Procedure. The question as to whether the service of notice has been fraudulently refused by unscrupulous means is a question of fact to be decided on the basis of evidence.
On the other hand in M/s. Madan & Co.''s case and also in V. Rajakumari''s case, the apex Court made similar observations under exactly similar circumstances. But neither in D. Vinod Shivappa''s case nor in M/s. Madan & Co.''s case considered as to whether mere giving of a notice with proper address, prepaying or posting were alone sufficient to attract Section 27 of the General Clauses Act irrespective of the return endorsement.
These observations of the Supreme Court noted above are not contrary to the decisions cited about the rebuttal of presumption, whereas they contemplate that the question of survival or rebuttal of the presumption is to be decided on the basis of necessary evidence to be recorded only. In other words, these observations hold that it would be premature to conclude on the ground of return of the cover with endorsement "the address not available" that the presumption was not rebuttal. The observations being very rational are to be followed, particularly when they are not against the concept of rebuttal of the presumption. Both the parties are at liberty to take necessary steps in this behalf for meeting the ends of justice. Thereby the two criminal petitions in which sought to quash the proceedings oh the ground of non-service of notices are dismissed as not tenable. The miscellaneous petitions if any shall stand closed.