IN THE HIGH COURT OF KERALA AT ERNAKULAM
CRL.A.No. 426 of 2002()
1. RAMESH, S/O.MARICKAR, AGED 43 YEARS,
... Petitioner
Vs
1. M.M.BADRUDHEEN, M.S.M.BAKERY,
... Respondent
2. STATE OF KERALA, REPRESENTED BY THE
For Petitioner :SRI.K.R.RAGHUNATH
For Respondent :SRI.P.CHANDRASEKHAR
The Hon'ble MR. Justice S.S.SATHEESACHANDRAN
Dated :02/06/2009
O R D E R
S.S.SATHEESACHANDRAN, J.
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CRL.A.NO.426 OF 2002 (A)
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Dated this the day of June,2009
J U D G M E N T
Complainant is the appellant. His complaint filed against
the respondents under Section 138 of the Negotiable
Instrument Act, for short, the ‘N.I.Act’, after trial, ended in a
judgment of acquittal rendered in favour of the accused.
Aggrieved by the order of acquittal, questioning its legality,
propriety and correctness, he has come up with this appeal.
2. The case of the complainant is that towards discharge
of a loan availed, the accused issued Ext.P1 cheque for a sum
of Rs.48,000/- promising its encashment on presentation in
due course. The cheque presented, was however, dishonoured
due to insufficiency of funds in the account of the accused.
Statutory notice issued intimating dishonour and demanding
the sum covered by the cheque was not responded with any
reply or payment. Hence, the complaint was launched to
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prosecute the accused for the offence under Section 138 of
the N.I.Act.
3. The accused, on appearance, pleaded not guilty when
the particulars of the offence were made known. Complainant
got himself examined as PW1 and exhibited Exts.P1 to P3 to
prove his case. Accused questioned under Section 313 of
Cr.P.C. maintaining his innocence contended that he had
availed a loan of Rs.15,000/- from one Shahul Hameed, on
which, Rs.10,000/- was discharged by daily payment. The
balance of Rs.5,000/- alone was outstanding, and the case has
been foisted on false allegations. He examined one witness as
DW1 to prove his defence.
4. The learned Magistrate, after appreciating the
materials produced, accepting the arguments canvassed by
the learned counsel for the accused that the complainant was
bound to prove the date of service of statutory notice of the
accused on dishonour of cheque to reckon the cause of action,
and that having not been established in the present case, it
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was fatal to the prosecution case. The case of the complainant
was also found unacceptable to the court below for the reason
that the complainant, who admittedly carried money lending
business, in his evidence, had stated that there was no entry in
his account as to advancing a loan of Rs.48,000/- to the
accused as alleged in the complaint. The defence set up by
the accused was also found not acceptable to hold the
weakness in the evidence of the defence, would not help the
complainant to improve his case. The learned Magistrate,
rendered the judgment of acquittal, absolving him of the
offence under Section 138 of the N.I.Act.
5. I heard the learned counsel on both sides.
Conclusions found by the learned Magistrate had assailed by
the learned counsel for the complainant contending that they
are erroneous both under law and facts. Once a registered
notice was issued in the correct address of the accused,
intimating the dishonour of the cheque and demanding the
sum thereunder, as prescribed under Section 138 (b) of the
N.I.Act, within the time limit stipulated, any defence on the
CRA.426/02 4
plea of non service by the addressee, whatever be the reason,
is bound to prove and establish by him and not by the
complainant, submits the learned counsel for the complainant.
The reasonings of the court below to doubt the case of the
complainant in the absence of any entry on the loan
transaction, giving rise to Ext.P1 cheque, in his account as
admitted by him in his evidence is also attacked by the learned
counsel contending that he was entitled to the statutory
presumption under Section 139 of the N.I.Act, and that
presumption having not been rebutted, he was not expected
to and bound to lead evidence on the loan transaction or
produce the account books. On the other hand, the learned
counsel appearing for the accused contended that the order of
acquittal imputed in the appeal is proper, valid and correct,
and it does not warrant any interference.
6. The point that emerges for consideration is whether
the order of acquittal passed in favour of the accused by the
court below is sustainable under law?
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7. Perusing the records of the case, I find the learned
Magistrate failed to take note of the proved facts and
circumstances presented by the materials produced in the
case. Ext.P1 cheque is dated 10.11.1998. On presentation
before the bank, it was dishonoured under Ext.P2 memo dated
11.11.1998 and intimation of such dishonour from the bank of
the complainant is dated 14.11.1998. Ext.P3 copy of the
advocate notice issued by the complainant is dated
16.11.1998, but seen actually issued only on 21.11.1998 as
evident from the registered receipt attached to the notice.
Registered receipt with the endorsement of the date as above
indicates that notice was issued within 15 days from
intimation of the dishonour of the instrument from the bank,
complied with the statutory mandate. Complaint was filed by
the complainant on 14.12.1998. A notice was properly issued
after dishonour of the cheque and a complaint filed, both
within the statutory period prescribed under Section 138 (b)
of the N.I.Act. But the question involved is whether there was
actual service of notice on the accused and in the facts and
circumstances involved, if any challenge is raised as to the
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non service on whom was the burden to establish such non
service. Accused has not advanced any defence that he did
not receive the notice, when the complainant examined as
PW1 was subjected to cross examination. Even when
questioned under Section 313 of the Cr.P.C., he did not raise
such a defence. Still, the learned Magistrate found merit in
the arguments canvassed by the counsel appearing for the
accused that in order to sustain a prosecution under Section
138 of the N.I.Act, against an offender, the complainant
thereafter has to prove actual service of notice, and in fact,
the date of service of notice also established his cause of
action. In accepting that contention, reliance was also placed
by the learned Magistrate in SLI Import, U.S.A. v. Exim
Aides Silk Exporters (1999 (2) KLT 275 (SC)). I am
afraid, the contentions raised and the reliance placed by the
learned Magistrate, is patently erroneous. In the decision
referred to, the date of service of fax message on dishonour of
the cheque was established on reckoning the cause of action
thereunder, it is held, the offence is complete on the failure to
pay the amount within 15 days there from. It does not in any
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way assist the conclusion arrived at by the learned Magistrate
that over and above issuing a cheque, the complainant is
bound to prove the actual date of service so as to calculate as
to from which date the cause of action inures in favour of the
drawee or the holder of the instrument. If such a condition is
insisted upon, that is, from the drawee or the holder of the
dishonoured negotiable instrument, very often it may be
seeking the imponderable as he will not be in a position to
produce and lead any materials on the actual date of service
especially whether a trickster cheque drawer is able to avoid
service by adopting surreptitious methods. In this context, it
would be advantageous to take note of the observations of the
apex court in Alavi Haji v. Muhammed (2007 (3) KLT 77
(SC)) as to how a defence set up as to non servie of notice in a
proceedings under Section 138 of the N.I.Act has to be
appreciated. In the above decision, the apex court has
observed as follows:
“The requirement of giving of notice is a
clear departure from the rule of Criminal
Law, where there is no stipulation of giving
of a notice before filing a complaint. AnyCRA.426/02 8
drawer who claims that he did not receive
the notice sent by post, can, within 15 days of
receipt of summons from the court in respect
of the complaint under Section 138 of the
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 complaint
with the summons) and, therefore, the
complaint is liable to be rejected. A person
who does not pay within 15 days of 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, by ignoring statutory
presumption to the contrary under Section 27
of the G.C.Act and Section 114 of the
Evidence Act. In our view, any other
interpretation of the proviso would defeat the
very object of the legislation. As observed in
Bhaskaran’s case (2003 (1) KLT 381
(SC)) if the-giving of notice-in the context of
Clause (b) of the proviso was the same as the-
reciept of notice-a trickster cheque drawer
would get the premium to avoid receiving the
notice by adopting different strategies and
escape from legal consequences of Section
138 of the Act.”
Not only that no defence was canvassed by the accused as to
non service of notice, in the present case, no circumstances
indicating such non service was also placed on record. When
that be so, the enquiry proceeded by the learned Magistrate
CRA.426/02 9
on that question, solely based on the arguments canvassed by
the learned counsel for the accused and on placing reliance
on SLI Import’s case and Alavi Haji’s case (supra), that
actual service of notice on the drawer is necessary to reckon
the cause of action, was totally unwarranted. In the light of
the registered receipt produced, evidencing the issue of notice
within the time as mandated by the Statute and having regard
to the fact that no defence was canvassed by the accused on
non service of notice, it has to be concluded that there was
actual service of notice on him as prescribed by law. The
learned counsel for the complainant is justified in contending
that in the proved facts of the case, complainant is entitled to
the presumption under Section 139 of the N.I.Act, and he is
not bound to produce the account books regarding the loan
transaction. Evidence of the complainant that no entry is
made in his account books on the loan transaction with the
accused has no significance when the transaction is practically
conceded by the accused, setting up an alternate version of
receiving only a lesser sum through another and discharge of
a substantial portion by part payment. The court below has
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also observed that evidence of DW1 is unreliable as he was not
a person referred to as the commission agent when
complainant as PW1 was subjected to cross examination by
the accused. The defence of the accused remains
unestablished by any materials and it was correctly found
unacceptable by the court below. So much so, in the proved
facts and circumstances, the irresistible conclusion that
follows is the guilty of the accused for the offence under
Section 138 of the N.I.Act. In reversal of the order of acquittal
of the accused, he is found guilty and convicted under Section
138 of the N.I.Act.
8. Having regard to the nature of the offence, falling
under Section 138 of the N.I.Act, I am of the view that
incarceration of the accused in prison for a term is not called
for to advance the ends of justice. Accused is sentenced to
undergo imprisonment till the rising of court and to pay a sum
of Rs.48,000/- as compensation under Section 357 (3) of the
Cr.P.C. to the complainant within two months from the date of
receipt of copy of this judgment. In default of payment of
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compensation as directed, the accused shall undergo simple
imprisonment for two months more. The accused shall appear
and his sureties shall produce him before the Chief Judicial
Magistrate Court, Palakkad, on 3.8.2009, and the learned
Magistrate shall execute the sentence as directed.
Appeal is partly allowed.
S.S.SATHEESACHANDRAN
JUDGE
prp
S.S.SATHEESACHANDRAN, J.
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CRL.R.P.NO. OF 2006 ()
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O R D E R
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23rd March, 2009