Mrs.Guruvinder Kaur v. Surya Agencies, Vellore

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE: 14.3.2008.CORAMTHE HON'BLE MR.JUSTICE M.JEYAPAULCrl.O.P.No.576 and 595 of 2008M.P.Nos.1 and 2 of 2008Mrs.Guruvinder KaurW/o. Gurjit SinghProp: M/s.Guru International,CZ-6, (Sector.B), Metropolitan Co-op. Housing CanalSouth Road, Kolkatta.Petitioner in both cases/Accused.vs. Surya Agencies, Vellore rep by Power of Attorney V.SasikumarNo.1703, Phase II, Sathuvachari, Vellore 632 009.Respondent in Crl.O.P.No.576/2008/Complainant.Sanova International, Vellore rep by Power of AttorneyV.SasikumarNo.1703, Phase II, Sathuvachari, Vellore 632 009.Respondent in Crl.O.P.No.595/2008/Complainant.Criminal Original Petitions filed under section 482 Cr.P.C. tocall for the records on the file of Judicial Magistrate I, Walajah inC.C.No.50 and 49 of 2007 and quash the proceedings therein. For petitioner : Mr.V.Sairam For respondent : Mr.R.Vasudevan https://hcservices.ecourts.gov.in/hcservices/ COMMON ORDERThese petitions are filed seeking to quash the criminalproceedings in C.C.Nos49 and 50 of 2007 on the file of the learnedJudicial Magistrate I, Walajah. 2. The petitioner is the accused in those cases filed by therespondent under section 138 of the Negotiable Instruments Act. 3. The respondent/complainant has contended in the complaint laidunder section 138 of the Negotiable Instruments Act that thecomplainant supplied goods to the accused on the strength of thepromise made by them, but, the accused made only a meager paymenttowards the supply of goods. When the complainant demanded paymentcontinuously, the accused asked the complainant to deposit thesubject cheques. The subject cheques have been issued by the accusedin continuation of the cheques given by the accused on earlieroccasions. The subject cheques were deposited by the complainant on17.11.2005 with the complainant's bankers for realisation. But, thecheques were returned with an endorsement "insufficient funds" in theaccounts of the accused. The complainant sent a legal notice throughtheir counsel demanding the accused to pay the amount in the subjectcheques within fifteen days from the date of receipt of the notice,but, the accused evaded to receive the notices sent to his addressesat Kolkatta and also at Delhi. Therefore, the service of notice isdeemed to be proper service. The complaint also seeks payment ofRs.3,00,000/= from the fine amount that may be imposed under section357 of the Code of Criminal Procedure. With the aforesaid pleadingsand averments, the complaints were lodged by the petitioner. 4. Heard the arguments of the learned counsels appearing oneither side. 5. Learned counsel appearing for the petitioner would submit thatthere was virtually no pleading in the complaints that the chequeswere issued for the subsisting liability. There is no averment inthe complaint that the accused failed to pay the cheque amount. Inthe last paragraph of the complaint, the complainant has sought foronly a sum of Rs.3,00,000/= being the cheque amount. Therefore, theingredients to charge a person under section 138 of the NegotiableInstruments Act have not been averred to in the complaint.Therefore, the complaints are liable to be dismissed. 6. Learned counsel appearing for the respondent/complainant wouldcontend that the entire pleadings would prima facie show that therewas some commercial transaction between the parties and the accusedissued cheques for the dues payable by the accused to thecomplainant. The criminal prosecution was laid as against thepetitioner/accused only after making sincere attempts to serve https://hcservices.ecourts.gov.in/hcservices/ statutory notice on the accused. The return of the notices addressedto the proper addresses of the accused shall be deemed to be properservice. The claim of lesser compensation from out of the fineamount that may be levied under section 357 of the Code of CriminalProcedure does not amount to restricting the liability of the accusedunder the subject cheques. 7. The complaint would read that there had been businesstransaction between the complainant and the accused and the accusedwho received supply of materials from the complainant did not makeproper payment for the goods supplied. The issuance of the chequehas been adverted to in para 14 of the complaint. The averment as tothe subsisting liability is found in paragraphs 2 and 3 of thecomplaint. Of course, the complainant has not specifically stated inthe complaint that the accused failed to pay the cheque amount onreceipt of the statutory notice. Here is a case where the statutorynotices were sent to the addresses of the accused at Kolkatta andalso at Delhi, but, quite unfortunately, they returned with theendorsement "addressee left for out Station". Of course, thecomplainant has stated that the return of the notice with theaforesaid endorsement shall be deemed as proper service of statutorynotice. It is not the case of the complainant that the accused didin fact receive the statutory notice. They have claimed that thereturn of the notice shall be deemed as proper service. When theaccused has not received the notice and proper service will have tobe presumed, the question of making an averment that the accused didnot make payment of the cheque amount inspite of service of noticedoes not arise at all. 8. After all, the complainant has sought for a sum ofRs.3,00,000/= from out of the fine amount that may be levied undersection 357 of the Code of Criminal Procedure. Invocation of theaforesaid provision of law by the learned Judicial Magistrate whilepronouncing the judgment of conviction is left to his judicialdiscretion. The claim of the restricted amount therein ascompensation does not militate against the prosecution launched bythe complainant for the offence under section 138 of the NegotiableInstruments Act. Further, it also cannot be construed that thecomplainant has come out with two contradictory version as to thecheque amount payable by the accused, inasmuch as the cheque amountis totally different from the amount claimed by way of compensationunder section 357 of the Code of Criminal Procedure. 9. The Honourable Supreme Court, in KUSUM INGOTS AND ALLOYSLTD. V. PENNAR PETERSON SECURITIES LTD. (AIR 2000 SC 954), has heldas follows:-"From the facts of the case alleged by thecomplainant gist of which has been noted earlierthe position is clear that no exception can betaken against the order of the Magistrate taking https://hcservices.ecourts.gov.in/hcservices/ cognizance of the offence under Section 138 of theNegotiable Instruments Act against the appellants.Undisputedly the cheques were drawn by theappellants for payment of certain amount of moneydue to the complainant, from the account in thebank and the said cheques were dishonoured by thebank and the amount remained unpaid even afterlapse of 15 days from the date of the notice issuedby the complainant after the cheques weredishonoured. Therefore, the ingredients of Section138 being prima facie established from thecomplaint and the documents filed with it, theMagistrate rightly took cognizance of the offenceand issued summons to the appellants."10. The process is issued taking cognizance of the offence undersection 138 of the Negotiable Instruments Act only after consideringnot only the complaint but also the sworn statements and thedocuments produced by the complainant. Therefore, the Trial Court iscalled upon to weigh the entire materials made available at the timeof taking cognizance to find whether the ingredients have been madeout prima facie to make out an offence under section 138 of theNegotiable Instruments Act. The complaint under section 138 of theNegotiable Instruments Act cannot be simply truncated and separatelyscanned and assessed to come to a finding whether the ingredients aremade out prima facie to constitute the offence under section 138 ofthe Negotiable Instruments Act. Even if a part of the ingredients isfound lacking in the private complaint launched against the accusedfor offence under section 138 of the Negotiable Instruments Act, theTrial Court is empowered to peruse the sworn statement of thecomplainant and other witnesses and the documents produced to supporthis allegation to come to a decision whether prima face case is madeout under section 138 of the Negotiable Instruments Act. 11. It has been further held in the decision cited supra asfollows:-"On a reading of the provisions of Section 138 ofthe Negotiable Instruments Act it is clear thatthe ingredients which are to be satisfied formaking out a case under the provision are:(i) a person must have drawn a cheque on anaccount maintained by him in a bank for payment ofa certain amount of money to another person fromout of that account for the discharge of any debtor other liability;(ii) that cheque has been presented to the bankwithin a period of six months from the date onwhich it is drawn or within the period of itsvalidity, whichever is earlier;(iii) that cheque is returned by the bank unpaid, https://hcservices.ecourts.gov.in/hcservices/ either because the amount of money standing to thecredit of the account is insufficient to honourthe cheque or that it exceeds the amount arrangedto be paid from that account by an agreement madewith the bank; (iv) the payee or the holder in due course of thecheque makes a demand for the payment of the saidamount of money by giving a notice in writing, tothe drawer of the cheque, within 15 days of thereceipt of information by him from the bankregarding the return of the cheque as unpaid;(v) the drawer of such cheque fails to makepayment of the said amount of money to the payeeor the holder in due course of the cheque within15 days of the receipt of the said notice."12. In yet another case, viz., SAROJ KUMAR PODDAR v. STATE (NCTOF DELHI) ((2007) 2 SCC (Cri) 135), the Honourable Supreme Court hasobserved as follows:-"For creating a criminal liability in terms of thesaid section, the complainant must show:(i) that a cheque was issued:(ii) the same was presented;(iii) but, it was dishonoured;(iv) a notice in terms of the said provision wasserved on the person sought to be made liable; and(v) despite service of notice, neither any paymentwas made nor other obligations, if any, werecomplied within fifteen days from the date ofreceipt of the notice."13. Of course, the complainant will have to show prima facie thatthe cheques were issued and the same were presented, but, they weredishonoured and a notice in terms of section 138 of the NegotiableInstruments Act was served on the drawer of the cheques demandingpayment of the cheque amount within fifteen days from the date ofreceipt of statutory notice. As already held by this court, theentire materials produced by the complainant beforeever the complaintwas taken on file will have to be thoroughly scanned to find whetherall the aforesaid ingredients are made out to prosecute the accusedunder section 138 of the Negotiable Instruments Act. Firstly, it isfound that there are averments in the complaint to show that therewas subsisting liability and the disputed cheques were issued by theaccused. The statutory notice also was issued on the accused, but,quite unfortunately, the said notices were returned unserved with theendorsement "the drawer had left for outstation". Therefore, thecomplainant had no occasion to aver in the complaint that the accuseddid not make payment of the cheque amount within fifteen days from https://hcservices.ecourts.gov.in/hcservices/ the date of receipt of the statutory notice. Even otherwise, thecomplaint, the sworn statement of the complainant and the supportivedocuments produced by the complainant would go to show prima faciethat all the ingredients under section 138 of the NegotiableInstruments Act have been prima facie made out. 14. It is true that this court in K.DEVARAJ v. T.K. KOYA (2003CRI. L.J. 520) has held that when there was no averment in thecomplaint about the factum of non payment of the cheque amount withinfifteen days from the date of receipt of the notice by thecomplainant, the complaint sans the aforesaid essential ingredientsunder section 138 of the Negotiable Instruments Act is liable to bequashed. 15. As observed by this court, there was no occasion for thecomplainant to speak about the non payment of the amount under thecheque within fifteen days from the date of receipt of notice by theaccused, as the notices sent to both the addresses of the accusedwere returned with the endorsement "the addressee left foroutstation". Further, the complaint cannot be separately perused tocome to a decision whether the ingredients under section 138 of theNegotiable Instruments Act were made out. The Honourable SupremeCourt has held that not only the complaint but also the swornstatement and the supportive materials produced by the complainantwill have to be perused carefully to come to a decision whether allthe ingredients are made out to rope in the accused for offence undersection 138 of the Negotiable Instruments Act. 16. It has also been held in the authority reported in M.M.T.C.LTD. v. MEDCHL CHEMICALS & PHARMA (P) LTD ((2002) 1 SCC 234) thateven in a case where there was no averment as to the subsistingliability and an enforceable debt for the issuance of the subjectcheques in the complaint filed by the de facto complaint, inasmuch asthere is a legal presumption under section 138 of the NegotiableInstruments Act, the complaint cannot be quashed on that score. 17. It is obligatory on the part of the court to presume theliability of the drawer for the amount of the cheque in every casewhere the factual basis is established. (See: HITEN P.DALAL v.BRATINDRANATH BANERJEE ((2001) 6 SCC 16)). 18. To sum up, it is found that by and large, the ingredients tolaunch the prosecution under section 138 of the NegotiableInstruments Act have been made out in the complaint. The cumulativereading of the complaint, sworn statement of the complainant and thesupportive materials produced by the complainant would go to showprima facie that a case under section 138 of the NegotiableInstruments Act has been made out. Lack of pleadings as to thesubsisting liability for the issuance of the cheque cannot be a https://hcservices.ecourts.gov.in/hcservices/ ground to quash the criminal proceedings. No necessity has arisenfor the complainant to aver in the complaint that the accused failedto pay the cheque amount as the statutory notice was returned withthe endorsement "the addressee left for outstation". The claim oflesser compensation amount in the last portion of the complaint orthe factual mistake as to the cheque amount in the last paragraph ofthe complaint cannot be a valid ground for seeking quashment of thecriminal proceedings. 19. The petitioner has come out with these petitions seekingquashment without any legal basis. Therefore, the petitions fail andthe same stand dismissed. The connected Miscellaneous Petitions alsostand dismissed.ORDER: This petition having been posted on this day, 17.3.2008, forbeing mentioned pursuant to the order of this Court dated 14.3.2008and made herein and in the presence of the aforesaid advocate, theCourt made the following Order:The matter is listed today, for being mentioned.No clarification is required.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.ssk. ToThe Judicial Magistrate, Walajah.2. -do- through the Chief Judicial Magistrate, Vellore.+ 2 CCs to Mr.R.Vasudevan, Advocate SR NO14566 and 14567Crl.O.P. Nos.576 & 595 of 2008 ksk[co]gp/31.3.