Sham Takiyavi v. Satish Prasad

behalf of the parties, has upheld the judgment of conviction and order of sentence passed by the learned trial Court.

#8. The learned counsel for the petitioner assailing the concurrent findings of learned appellate Court as well as trial Court has submitted that both the Court has failed to appreciate the entire materials/evidence available on record in right perspective and erroneously convicted the appellant. It is further submitted that learned trial Court as well as appellate Court has also completely failed to appreciate the fact that when the complaint was filed, the statutory period of 15 days after receipt of notice for repayment had not expired, hence, no cause of action arose which was not considered and the learned trial Court has erroneously awarded compensation of Rs. 70,000/- to the complainant and since the case was instituted without providing 15 days’ time from deemed date of service of notice, it is not maintainable in the eye of law constituting no offence under section 138 of N.I. Act. Hence, the learned appellate Court as well as learned trial Court has committed gross error of law in recording findings of conviction of the petitioner under Section 138 of the N.I. Act which requires interference in this revision and fit to be allowed.

#9. On the other hand, learned APP assisted by learned counsel for the opposite party No.2 defending the impugned judgment passed by learned appellate court has submitted that the learned 4 Criminal Revision No.907 of 2016 appellate court has very wisely and aptly considered all aspects of the case in the light of documentary evidence adduced by the complainant. Therefore, the impugned judgment suffers from no illegality or infirmity calling for any interference by way of this revision, which is fit to be dismissed.

#10. On the basis of contentions of the parties, the following questions arises for consideration in this revision application:- Whether the complaint case instituted under section 138 of N.I. Act within the period of 30 days from the date of issuance of legal notice demanding the cheque amount from its drawer is pre-matured?

#11. Before imparting my verdict on the above issues involved in this case, it is desirable to quote the relevant provisions of the Negotiable Instrument Act: “Section 138. Dishonour of cheque 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 5 Criminal Revision No.907 of 2016 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 [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 is 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 142 Cognizance of offences.— (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),— 6 Criminal Revision No.907 of 2016 (a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, 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: [Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period;] (c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.] (2) The offence under Section 138 shall be inquired into and tried only by a Court within whose local jurisdiction,- (a) If the cheque is presented 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 through an account, the branch of the drawee bank where the drawer maintains the account, is situated. Explanation.- For the purposes of clause (a), where a cheque is delivered for collection at any 7 Criminal Revision No.907 of 2016 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, as the case may be, maintains the account.

#12. In the case of Ajeet Seeds Limited vs. K. GopalaKrishnaiah (2014) 12 SCC 685, the High Court quashed the complaint exercising the power under section 482 of Cr.PC on the grounds: (i) that there was no averments in the complaint that the notice issued under section 138 of N.I. Act by the complainant was served upon the accused and (ii) even there was no proof that either the said notice was served or it was returned unserved/unclaimed. Allowing the appeal, the Hon’ble Apex Court held as under:- “Section 114 of the Evidence Act, 1872 enables the court to presume that in the common course of natural events, the communication sent by the post would have been delivered at the address of the addressee. Further section 27 of General Clauses Act, 1897 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by the registered post. It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have served or that the addressee is deemed to have knowledge of notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected 8 Criminal Revision No.907 of 2016 at the time at which the letter would have been delivered in the ordinary course of business. Applying the above conclusions to the facts of the case, it must be held that the High Court clearly erred in quashing the complaint on the ground that there was no recital in the complaint that the notice under section 138 of N.I. Act was served or it was returned unserved/unclaimed. That is a matter of evidence. In C. C. Alavi Haji vs. Palapetty Muhammed and Anr. (2007) 6 SCC 555, the Apex Court did not deviate from the view taken in the case of D. Vinod Shivappavs Nanda Belliappa (2006) 6 SCC 456 but reiterated the view expressed therein with certain clarification. The Apex court in D. Vinod Shivappa case has held that service of notice is a matter of evidence and proof and it would be premature at the stage of issuance of process to move the High Court for quashing the proceeding under section 482 of Cr.PC. These observations are squarely attracted to the present case. The High Court’s reliance on an order passed by a Two Judge Bench in Shakti Travel & Tours (2002) 9 SCC 415is misplaced. The Three Judges Bench of Supreme Court in C.C. Alavi Haji’s case has conclusively decided the issues concerned. Thus the judgment in Shakti Travel & Tours case does not hold the filed any more. In view of the above impugned judgment of the High Court was set aside and the instant complaint was restored. 9 Criminal Revision No.907 of 2016

#13. The Hon’ble Apex Court in the case of C. C. Alavi Haji vs. Palapetty Muhammed and Anr. (2007) 6 SCC 555, observed that when the notice was sent by the registered post by correctly addressing drawer of the cheque, mandatory requirement of issue of notice in terms of section 138 proviso (b) of N.I. Act stands complied with. It is needless to emphasis that the complaint must contain basic facts regarding the mode and manner of issuance of notice to the drawer of the cheque. It is well settled that at the time of taking cognizance of the complaint under section 138 of N.I. Act, the court is required to be prima facie satisfied that a case under the said section is made out and afore-noted mandatory statutory procedural requirement have been complied with. It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that notice was brought to his address or that the address mentioned on the cover box is incorrect or that a letter was never tendered or that the report of the postman was incorrect. This interpretation of the provision would effectuate the object and purpose for which the proviso to section 138 was enacted, namely, to avoid unnecessary hardship to an honest drawer of a cheque to provide him opportunity to make amends. Any drawer who claims that he had not received the notice sent by the post, can within 15 days of receipt of 10 Criminal Revision No.907 of 2016 summons from the court in respect of complaint under section 138 of Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of the complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of the receipt of the summons from the court along with the copy of the complaint under section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under section 138 of the Act, by ignoring statutory presumption to the contrary under section 27 of the General Clauses Act and Section 114 of the Evidence Act. Further exploring the nature and object of section 138 of proviso (b) (c) regarding requirement of giving notice to drawer of cheque prior to prosecution under section 138, it was observed that object of such requirement is to avert unnecessary prosecution of an honest drawer and give an opportunity to him to make amends and thus avoid unnecessary hardship to him. The prosecution under section 138 of NI Act has been made subject to certain conditions which are stipulated in the provisos appended to section 138. Therefore, the observance of stipulating in proviso (b) to section 138 and its aftermath in proviso(c) to the said section being a pre-condition for invoking of offence under section 138 of the Act giving notice to the 11 Criminal Revision No.907 of 2016 drawer before filing the complaint under section 138 of the Act is a mandatory requirement. The requirement of giving notice is a clear departure from the rule of criminal law, where there is no stipulation of giving a notice before filing a complaint. The entire purpose of requiring a notice to give an opportunity to the drawer to pay the cheque amount within 15 days of service of notice and thereby free himself from the penal consequences of section 138. While construing the said provision, the object of legislation has to be borne in mind. The chapter XVIII of the N.I. Act originally containing sections 138 to 142 was inserted in the Act to create an atmosphere of faith and reliance on banking system by discouraging people from not honouring their commitments by way of payment through cheques. Section 138 of the Act was enacted to punish unscrupulous persons who purported to discharge their liability by issuing cheque without really intending to do so. To make this provision contained in the said chapter more effective, some more sections were inserted in the chapter and some amendments in the existing provisions were made. These amendments do indicate the anxiety of the legislature to make the provision more result oriented.

#14. In the case of Subodh S. Salaskar Vs. Jayprakash M. Shah and Anr. (2008) 13 SCC 689 relied upon by the opposite party 12 Criminal Revision No.907 of 2016 No.2, the cheque presented to bank on 10.01.2001 were returned to Respondent No. 1 by the bank alleging that no such account in the name of appellant was in operation. A legal notice dated 17.01.2001 under section 138 of proviso (b) of the N.I. Act was sent by speed post. The complaint petition alleging commission of an offence under section 138 of N.I. Act, however was filed on 20.04.2001. An application to amend the complaint petition for adding offence under section 420 of Indian Penal Code was allowed by an order dated 14.08.2001. The appellant’s application dated 16.12.2003 for discharge on the premise that the complaint petition was barred by limitation was dismissed. The revision application filed by the appellant before the learned Additional Sessions Judge as well as criminal writ petition was dismissed. Allowing the appeal, the Hon’ble Supreme Court held in the facts and circumstances of the case, the High Court was not correct in taking the view that the court as per proviso to under section 142(b) of N.I. Act, had jurisdiction to allow the amendment of the complaint petition at a letter such. Ex facie, the amendment application was barred by limitation no application for condonation for delay was filed. The matter might have been different if the Magistrate could have exercised its jurisdiction under section 5 of the Limitation Act, 1963 or section 473 of Cr.PC. The provisions of said acts are 13 Criminal Revision No.907 of 2016 not applicable. In any event no such application for condonation of delay was filed. Considering the factual aspects of the case, it was observed that condition precedent for taking cognizance as prescribed under section 138 of proviso (c) and 142(b) are satisfied. Admittedly, notice was sent by the speed post on

07.01.2001 and the complaint was filed on 20.04.2001. Even if the presumption of deemed service within a reasonable time of 30 days (i.e., 16.02.2001) is taken, the accused was required to make payment within 15 days i.e. on or about 02.03.2001. The complaint petition which should have been filed on 02.04.2001 was filed on 20.04.2001 was clearly barred by the limitation. It was further observed that proviso appended to section 138 of N.I Act limits the applicability of the main provisions. Unless the conditions precedent for taking cognizance the offence under section 138 of NI Act is satisfied, the court will have no jurisdiction to take cognizance. The complaint petition in view of section 142 (b) of the NI Act was required to be filed within one month from the date on which the cause of action arose in terms of the clause (c) of the proviso to section 138 of the NI Act. The legal notice admittedly was issued on 17.01.2001. It was sent by the speed post. It was supposed to be served within a couple of days. Although the actual date of service of notice was allegedly not known, the complaint proceeded on the basis 14 Criminal Revision No.907 of 2016 that the same was served within a reasonable period. The complaint petition admittedly was filed on 20.04.2001. The notice having been sent on 17.01.2001, if the presumption of the service of notice within a reasonable time is raised, it should be deemed to have been served at best within the period of 30 days from the date of issuance of thereof. In the situation, the complaint was hopelessly time barred.

#15. In the case of Yogendra Pratap Singh Vs. Savitri Pandey and Anr. (2014) 10 SCC 713, it was held that any complaint filed before the expiry of 15 days from the date of receipt of notice under section 138 proviso(c) of the Act is non est. Hence, no cognizance of offence can be taken on the basis of such non est complaint. In the instant case, the demand notice in question was admittedly served upon the drawer of the cheque (accused) on 23.09.2008, the complaint was presented on 07.10.2008 was filed before expiry of the stipulated period of 15 days. The Magistrate all the same took cognizance of the offence on

14.10.2008 and issued summons to the accused, who then assailed the said order in a petition under section 482 of Cr.PC before the High Court of Judicature of Allahabad. The High Court took the view that since the complaint had been filed within 15 days of the service of the notice the same was clearly premature and the order pressed by Magistrate taking cognizance of the offence on the basis of such complaint is 15 Criminal Revision No.907 of 2016 legally bad. The High Court accordingly quashed the complaint and the entire proceedings relating thereto in terms of its order impugned in the present appeal before the Hon’ble Apex Court. The appeal was dismissed with the aforesaid observation, it was held at para 38 that no complaint can be maintained against the drawer of the cheque before the expiry of the 15 days from the date of receipt of notice because the drawer/ accused cannot be said to have committed any offence until then. Accordingly impugned order passed by the High Court was upheld.

#16. Now coming to the points of consideration involved in this case, in the light of above discussions and principles of law propounded by the Hon’ble Apex Court, it is crystal clear that in the instant case, legal notice was issued on 09.05.2011 and the complaint was instituted just within one month i.e.

04.06.2011. As per presumptions under section 114 of Illustration (f) of the Evidence Act and section 27 of General Clauses Act, the service of notice upon the accused within a reasonable time is to be deemed and anything otherwise has to be rebutted by the accused by leading evidence. The stretching of the legal presumption for exactly 30 days and thereafter providing 15 days further time for making payment of cheque amount to a dishonest drawer of the cheque is nowhere justified under the law. Although, the said interpretation was accepted by the Hon’ble Apex Court while computing the period of 16 Criminal Revision No.907 of 2016 limitation in institution of the complaint case. In the instant case, there is no denial of existence of legal liability of the accused which was never discharged, the issuance of cheque under signature of the accused is also admitted fact. It is also not disputed that the notice was not sent on correct address of the addressee. It is also noticed that Hon’ble Apex Court in the case of C. C. Alavi Haji case (Supra) has specifically propounded guidelines that in the case where the drawer claims not to have received notice sent by the post, but received the copy of the complaint with the summons, he can within 15 days make payment of the cheque amount and on that basis submit to the court that the complaint be rejected. The complainant is not required to prove the service of notice on accused before institution of the case. In the instant case, the drawer has not denied about receipt of copy of complaint with summons and he appeared and contested the case throughout without raising any other substantial issues absolving him from the legal liability. Accordingly, a dishonest drawer of cheque can’t get a premium from his own default. It is not out of place to observe that the learned trial court must always adhere to the aims and object of giving notice to accused and examine the contents of complaint petition at the very stage of its registration and ensure that all legal formalities are complied with as prescribed under section 17 Criminal Revision No.907 of 2016 138 & 142 of N.I. Act, so as to alleviate any technical issue to crop up at the trial.

#17. In the aforementioned facts and circumstances of the case, the plea taken by the accused has no legal substance. It appears that learned Appellate Court has properly appreciated the entire aspects of the case in true perspectives and arrived at conclusion upholding the judgment of the trial court in convicting the accused for the offence under section 138 N.I. Act. Accordingly, this revision application is dismissed.

#18. Interim order passed by this Court, vide order dated 20.07.2018 stands vacated.

#19. I.A., if any, also stands disposed of.

#20. Let a copy of this order along with the record of trial court be sent back for information and needful. (Pradeep Kumar Srivastava, J.) Jharkhand High Court, at Ranchi Date: 20/07/2026 Basant/- N.A.F.R. Uploaded on 22/07/2026 18 Criminal Revision No.907 of 2016