The Honourable Mr v. Chandra Mohan

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 17.12.2007Coram :The Honourable Mr.Justice K.N.BASHACrl.A.No.740 of 1998 Bipin Mehta.. Appellant/ComplainantVsChandra Mohan.. Respondent/AccusedAppeal filed against the order of acquittal dated 31.03.1997made in C.C.No.4801 of 1993 on the file of VIII MetropolitanMagistrate, Chennai.For Appellant : Mr. K.P.Anantha KrishnaFor Respondent : Mrs.Juliet Pushpa, Legal Aid Counsel.JUDGMENTThis appeal is preferred by the complainant challenging theorder of acquittal passed by the learned VIII MetropolitanMagistrate, Chennai in C.C.No.4801 of 1993, dated 31.03.1997acquitting the accused for an offence under Section 138 of theNegotiable Instruments Act.2.It is seen that the complainant has filed the complaintfor an offence under Section 138 of the Negotiable Instruments Actagainst the respondent, who was the sole accused in this case. Thecase of the appellant/complainant is that he has given a loan ofRs.6,00,000/- on 14.03.1993 to the respondent/accused. Thecomplainant has also obtained a pro-note from the accused. While thecomplainant demanded the repayment of the loan amount, the accusedissued a cheque, dated 10.05.1993 for an amount of Rs.6,00,000/-drawn on State Bank of India, Kannanur, which is marked as Ex.P.1.Thereafter, the complainant deposited the said cheque under Ex.P.2 ina bank viz., Canara Bank. The complainant stated that on the depositof the cheque, Ex.P.1, the same was dishonoured on the ground of https://hcservices.ecourts.gov.in/hcservices/ insufficiency of funds as per the bank memo Ex.P.2 and alsoproprietary incorrect. Ex.P.3 is the bank memo sent from thecomplainant's Bank. Thereafter, the complainant sent a statutorynotice under Ex.P.4 and the same was returned with an endorsement asnot claimed and the returned cover was marked as Ex.P.5. Theappellant/complainant also followed the mandatory requirementscontemplated under Section 138 of the Negotiable Instruments Act, asthe cheque was presented within the period viz., within a period ofsix months and the complaint was also filed within the stipulatedtime under Section 138 of the Negotiable Instruments Act. 3.The complainant in order to prove his case, examinedthree witnesses including himself and also marked five exhibits asstated above viz., Exs.P.1 to P.5.4.When the accused was questioned under Section 313 Cr.P.C.in respect of the incriminating materials made appearing against him,the accused has come forward with the version of total denial and hehas stated that he has been falsely implicated in this case. Theaccused has not chosen to examine any witness on his side.5.The learned trial Magistrate on consideration of theentire evidence available on record has come to the conclusion thatthe appellant/complainant has not proved the case by adducing clearand cogent evidence and held that the offence under Section 138 ofthe Negotiable Instruments Act is not made out against therespondent/accused and acquitted the accused. Being aggrieved againstthe order of acquittal, the present appeal is filed by thecomplainant.6.Mr.K.P.Anantha Krishna, the learned counsel appearing forthe appellant/complainant contended that the impugned order ofacquittal is unsustainable in law, as the learned Magistrate hasoverlooked the materials available on record against the accused. Itis submitted that the learned Magistrate has not assigned any validreason for acquitting the accused. The learned counsel pointed outthat the learned Magistrate rejecting the case of theappellant/complainant acquitted the accused on three grounds viz.,1)The statutory notice as contemplated under Section 138-B ofthe Negotiable Instruments Act was not served on the accused, as theregistered post was returned with an endorsement "not claimed".2)The complainant has not produced any evidence to show towardswhich loan, the disputed cheque Ex.P.1 was issued in favour of thecomplainant. https://hcservices.ecourts.gov.in/hcservices/ 3)The pro-note on which the loan amount was given was notproduced before the Court.4)The cheque Ex.P.1 was said to have been issued by the accusedon behalf of the partnership firm viz., "Southern Well Products" andas such, the complaint itself is not maintainable as the partnershipfirm was not implicated as one of the accused. 7.The learned counsel appearing for theappellant/complainant would contend that all the above said reasonsassigned by the learned Magistrate are unsustainable in law, in viewof the fact that admittedly, the statutory notice was sent to thecorrect address of the accused, as the accused has not disputed theaddress mentioned in the cover and the postal cover was returned onlywith an endorsement "as not claimed" and therefore, in view of thesettled principles of law laid down by the Hon'ble Apex Court, thestatutory notice must be deemed to have been served on the accused inview of Section 27 of the General Clauses Act. In respect of non-production of pro-note, the learned counsel would contend that inview of the fact that the accused has not disputed the signature inthe cheque, Ex.P.1 and as such, the presumption clause under Section139 of the Negotiable Instruments Act, is to be considered as, oncethe cheque is issued in favour of the complainant, it has to bepresumed that the said cheque was issued only towards the legallyenforceable liability and therefore, merely because, the pro-note wasnot produced before the Court, the accused cannot claim that hecannot lift the presumption and as such, the non-production of pro-note is not fatal to the complainant's case. In support of hiscontention, the learned counsel for the appellant placed reliance ona decision of the Andhra Pradesh High Court reported in 2006 Crl.L.J.Page 1 (Gorantla Venkateswara Rao Vs. Kolla Veera Raghava Rao andanother). The last submission of the learned counsel for theappellant is that even the reason assigned by the learned Magistratethat the non-impleading of the partnership firm of the accused viz.,Southern Well Products is also not fatal to the case of thecomplainant, in view of the settled position of law that the accusedis none other than the partner of the said firm. 8.Per contra, Mrs.Juliet Pushpa, the learned counselappearing as Legal Aid counsel for the respondent/accused contendedthat there is no illegality or infirmity in the impugned order ofacquittal. It is submitted that the learned Magistrate has assignedvalid reasons for acquitting the accused. It is contended by thelearned counsel that if at all there is any genuine liability on thepart of the accused, the complainant could have very well producedthe pro-note as the complainant claimed that the loan was given only https://hcservices.ecourts.gov.in/hcservices/ on pro-note as per his complaint. He has not assigned any reason towithheld the said document and as such adverse inference should bedrawn against the case of the complainant. It is also submitted thatthe non-impleading of the partnership firm as admittedly the accusedhas signed in the cheque only on behalf of the partnership firm, isalso fatal to the prosecution case. 9. I have carefully considered the rival contentions putforward by the either side and thoroughly scrutinised the materialsavailable on record and also perused the impugned judgment ofacquittal.10.This is a case relating to an offence under Section 138of the Negotiable Instruments Act. The dishonoured cheque, Ex.P.1 isin respect of an amount of Rs.6,00,000/-. The complainant claimedthat he has given a loan of Rs.6,00,000/- to the accused and onlytowards the discharge of the said loan, the accused is said to haveissued the disputed cheque, Ex.P.1, which is also not disputed by theaccused. Regarding the formalities observed by the complainant inrespect of the mandatory requirements contemplated under theNegotiable Instruments Act, the accused raised certain legalobjections in this case viz., a non-production of pro-note, the non-serving of the statutory notice and the non-implication of thepartnership firm viz., Southern Well Products, for which, the firm ofthe accused has claimed to have issued the cheque on behalf of thefirm. The learned Magistrate has accepted all the three objectionsand rejected the case of the complainant and ultimately, acquittedthe accused. 11.Now, let me consider the reasons assigned by the learnedMagistrate for acquitting the accused as stated above. 12. The first reason on which, the order of acquittal waspassed by the learned Magistrate is the non-serving of the statutorynotice as contemplated under Section 138 of the NegotiableInstruments Act. It is seen that the statutory notice was sentthrough the advocate of the complainant. The sending of the notice isnot disputed by the accused, but the accused disputed on the servingof the notice on him. It is pertinent to be noted that the accusedhas not disputed the address, for which, the complainant has sent theregistered post and the registered post was returned with anendorsement in the cover viz., "not claimed". It is relevant torefer the well settled principles of law laid down by the HonourableApex Court in a catena of decisions to the effect that once thestatutory notice was despatched to the correct address of theaccused, it has to be presumed that the said statutory notice wasdeemed to have been served. https://hcservices.ecourts.gov.in/hcservices/

13. The Hon'ble Apex Court in V.Raja Kumari V. P.SubbaramaNaidu reported in AIR 2005 SC 109 has held that,"11. In Maxwell's Interpretation of Statutes, the learnedauthor has emphasised that "provisions relating to giving ofnotice often receive liberal interpretation" (vide p.99 of the12th Edn.) The context envisaged in Section 138 of the Actinvites a liberal interpretation for the person who has thestatutory obligation to give notice because he is presumed tobe the loser in the transaction and it is for his interest thevery provision is made by the legislature. The words inclause (b) of the proviso to Section 138 of the Act show thatthe payee has the statutory obligation to 'make a demand' bygiving notice. The thrust in the clause is on the need to'make a demand'. It is only the mode for making such demandwhich the legislature has prescribed. A payee can send thenotice for doing his part for giving the notice. Once it isdespatched his part is over and next depends on what thesendee does.12. It is well settled that a notice refused to beaccepted by the addressee can be presumed to have been servedon him (vide Harcharan Singh V. Shivrani (1981 (2) SCC 535)and Jagdish Singh V. Natthu Singh (1992(1) SCC 647)).13. Here the notice is returned as addressee being notfound and not as refused. Will there be any significantdifference between the two so far as the presumption ofservice is concerned ? In this connection a reference toSection 27 of the General Clauses Act, 1897 will be useful.The section reads thus :"27. Meaning of service by post – Where any Central Actor Regulation made after the commencement of this Actauthorities or requires any document to be served bypost, whether the expression 'serve' or either of theexpressions 'give' or 'send' or any other expression isused, then, unless a different intention appears, theservice shall be deemed to be effected by properlyaddressing, preparing and posting by registered post, aletter containing the document, and unless the contraryis proved, to have been effected at the time at whichthe letter would be delivered in the ordinary course ofpost." https://hcservices.ecourts.gov.in/hcservices/

14. No doubt Section 138 of the Act does not require thatthe notice should be given only by 'post'. Nonetheless theprinciple incorporated in Section 27 (quoted above) canprofitably be imported in a case where the sender hasdespatched the notice by post with the correct address writtenon it. Then it can be deemed to have been served on thesendee unless he proves that it was not really served and thathe was not responsible for such non-service."As far as the instant case is concerned, the fact remains that theaccused has not disputed the correct address mentioned in thestatutory notice and as such the statutory notice was sent by thecomplainant admittedly to the correct address of the accused and thesame was returned with the endorsement in the cover as "not claimed"and as such the statutory notice was deemed to have been served onthe accused. Therefore, the reason assigned by the learnedMagistrate in respect of non-compliance of the mandatory provision ofserving the statutory notice to the accused is unsustainable in law. 14. The next ground of acquittal is, the non-production ofthe pro-note. It is seen that the complainant stated that the loanamount was given on the basis of the pro-note. But the complainanthas not produced the pro-note and therefore, it is contended thatsuch non-production of pro-note is fatal to the prosecution case andon that ground, an adverse inference should be drawn against theversion of the complainant on this aspect. It is relevant to be notedthat the evidence of P.W.1 is remained to be unchallenged, as theaccused has not chosen to cross-examine P.W.1 and P.W.1's evidencecontains about the loan given to the accused firm and the accusedaccepting the liability and issued the cheque on behalf of the firm.Therefore, now the defence cannot contend that such non-production ofpro-note is fatal to the prosecution case. The learned counsel forthe appellant also has rightly placed reliance on a decision of theAndhra Pradesh High Court reported in 2006 Crl. L.J. Page 1, wherein,it was held that mere loss of demand of promissory note or its non-production by itself would not be sufficient to hold that there wasno legally enforceable debt or liability. It is also important tonote that once the accused is said to have issued a cheque,containing a signature, it has to be presumed that the cheque wasissued only towards the legally enforceable liability as perpresumption Clause under Section 139 of the Negotiable InstrumentsAct and as such it is for the accused to rebut the presumption.Therefore, this Court is constrained to state that even this groundis unsustainable in law. https://hcservices.ecourts.gov.in/hcservices/

15. The last but not the least reason assigned by thelearned Magistrate for acquitting the accused is, the non-impleadingof the partnership firm viz., Southern Well Products, on whosebehalf, the accused is said to have signed the cheque, Ex.P.1. inthis case. It is well settled that in a proceedings initiated inrespect of the company or a firm, the company or the firm need not beimpleaded and it is suffice to implead the persons, who are allresponsible and incharge of the day today affairs of the company. Asfar as the case in hand is concerned, the complainant has rightlyimpleaded the accused, who is none other than the Managing Partner ofthe company viz., Southern Well Products. Therefore, absolutely noprejudice is caused to the accused and there is no illegality in theproceedings initiated by the complainant against the accused. 16. The Honourable Apex Court also held in a decisionreported in (2000) 1 SCC page 1, (Anil Hada Vs. Indian Acrylic Ltd.),wherein, it has been held that the offence committed by the companyis the sine qua non for convicting the other persons, and such personcannot escape penal liability simply because the company is notprosecuted as a result of some legal impediment.17. Therefore, this Court is constrained to state, in viewof the reasons stated above, that the learned Magistrate hasoverlooked the materials available on record to implicate the accusedfor the offence under Section 138 of the Negotiable Instruments Actand the reasons assigned by the learned Magistrate is contrary to thefacts as well as in law and as such, this Court is left with theinevitable conclusion to the effect that the impugned judgment ofacquittal is unsustainable. Accordingly, this appeal is allowed andthe impugned order of acquittal passed by the learned VIIIMetropolitan Magistrate, Madras in C.C.No.4801 of 1993 by thejudgment, dated 31.03.1997 is hereby set aside. 18. The learned counsel for the respondent, who isappearing as Legal Aid counsel pleaded leniency in respect ofawarding sentence. It is submitted by the learned counsel that thetransaction itself is said to have taken place as early as in theyear 1993 and the accused also suffered heavy loss in his businessand as such, leniency may be shown to the accused in respect ofawarding sentence.19. Considering the submission of the learned counsel forthe respondent and also considering the admitted fact that thetransaction itself is said to have taken place as early as in theyear 1993, this Court is of the considered view that no usefulpurpose would be served by imposing the imprisonment of sentence on https://hcservices.ecourts.gov.in/hcservices/ the accused. On the other hand, this Court is of the considered viewthat imposing a sentence of till rising of the courts and alsodirecting the accused to pay an amount of Rs.6,00,000/- (Rupees SixLakhs only) in respect of the dishonoured cheque, Ex.P.1, to thecomplainant within a period of three months from the date of receiptof a copy of this order would meet the ends of justice. 20. It is also made clear that as per the decision renderedby the Hon'ble Apex Court in Dilip S.Dahanukar V. Kotak Mahindra Co.Ltd. reported in (2007) 6 SCC 528 that the appellant is entitled totake effective steps as contemplated under Section 421 of theCriminal Procedure Code in the event of non-compliance of thedirection of this Court to pay an amount of Rs.6,00,000/- (Rupees sixlakhs only) in respect of the dishonoured cheque, Ex.P.1 to thecomplainant/appellant within a period of three months from the dateof receipt of a copy of this order.21. Before parting with this matter, this Court place it onrecord the commendable services rendered by Mrs.Juliet Pushpa,learned counsel appeared as legal aid counsel for the respondent.The learned counsel is entitled to receive a sum of Rs.2,500/-(Rupees two thousand five hundred only) from the Tamil Nadu LegalServices Authority, Chennai. sd/-Asst.Registrar/true copy/Sub Asst.RegistrarjrlTo1. The VIII Metropolitan Magistrate, Chennai.2. -do- thro' The Chief Metropolitan Magistrate,Egmore, Chennai. https://hcservices.ecourts.gov.in/hcservices/

3. The Secretary, Tamil Nadu Legal Services Authority, High Court, Chennai.+1 cc To Mrs.Juliet Pushpa, Advocate, SR.75126+1 cc To Mr. K.P.Anantha Krishna, Advocate, SR.74607Crl.A.No.740 of 1998sp [co]gkg/5.6