K. Mohan Ram, J.@mdashThe brief facts that are necessary for the disposal of the above Criminal Original Petition are set out below:
The respondent herein filed a complaint for the alleged offence u/s 138 r/w Sections 141 and 142 of the Negotiable Instruments Act against M/s. Rathanam & Rathanam Tannery, a partnership firm, its partner Mr. S.P. Venkatachalam and another partner, the petitioner herein. The complaint was taken on file as C.C. No. 317 of 2006 and the same is pending on the file of the Judicial Magistrate, Perundurai and the petitioner is arrayed as 3rd accused therein. The petitioner has filed the above Quash Petition to quash further proceedings in C.C. No. 317 of 2006.
2. The case of the petitioner is that the cheque issued by the first accused-Firm was returned unpaid on 23.6.2006 with an endorsement ''Account Closed'' and the intimation from the Bank was received on 26.6.2006. The respondent herein has issued a legal notice dated 7.7.2006 to the following address:
P. Loganathan.
Partner: Rathanam & Rathanam,
S/o Porappanna Gounder,
11-Powar House Road,
Erode-1.
3. The said legal notice was returned with a postal endorsement "No such person"; thereafter, the respondent has issued a rejoinder on 31.7.2006 to the petitioner and the same was returned on 2.8.2006 with an endorsement "intimation"; neither any reply was given by the accused nor the amount covered by the cheque was paid and hence a complaint has been filed.
4. The contention of the petitioner is that there is no valid notice as far as the petitioner is concerned and as such no cause of action has arisen for filing complaint against the petitioner and hence the further proceedings are liable to be quashed.
5. I have heard Mr. A.K. Kumaraswamy, learned Counsel appearing for the petitioner and Mr. I.C. Vasudevan, learned Counsel appearing for the respondent.
6. Mr. A.K. Kumaraswamy, learned Counsel appearing for the petitioner submitted that admittedly a notice dated 7.7.2006 was sent to one P. Loganathan described as partner of M/s. Rathanam & Rathanam and the same had been returned. Thereafter, after the period of limitation was over, the respondent had sent a rejoinder on 31.7.2006 to the petitioner and the said rejoinder had been returned with an endorsement "intimation".
7. According to the learned Counsel unless and until the notice of demand is actually served on the petitioner and after receipt of such notice if the petitioner had defaulted in complying with the demand within the stipulated time of 15 days then only the cause of action for filing a case against the petitioner would arise and the rejoinder sent by the respondent will not cure the defect in the notice dated 7.7.2006.
8. In support of the above said contentions, the learned Counsel appearing for the petitioner relied upon the following decisions, viz.:
(i) B. Raman and 2 Ors. v. Shasun Chemicals and Drugs Ltd. II (2008) BC 83 : II (2008) CLT 91 : 2006(2) LW (CrI.) 775 (DB).
9. In the decision reported in B. Raman and 2 Ors. v. Shasun Chemicals and Drugs Ltd., (supra) in paragraphs 25 & 27 it is observed as follows:
25. ...So, these sections would provide that when there are directors, who are responsible for the conduct of the business of the Company, and when mere are other officers, with whose consent the offence has been committed, the complainant shall make averments to the said effect. In that context, the complainant has to start the process, of getting back the cheque amount from those persons, who represent the Company, in order to avoid the filing of the complaint against them, In the said process, he has to necessarily make a demand from those persons, who are part and parcel of the drawer. Only when that process fails, the cause of action, as envisaged in Section 138, would arise against them, to enable the complainant to approach the Court, within the stipulated time So. the starting of the process is, the service of notice on the persons, who represent the Company, the drawer of the cheque.
26. ...
27. ...In other words, the complainant can prosecute the Company as well as the other Directors, only when he is satisfied that the persons, sought to be prosecuted, arc in charge of and responsible for the conduct of the business of the Company and also, in spite of the demand of the cheque amount through service of notice, they have not chosen to pay the amount within time.
10. In the decision in Poppys Spinning Mills (P) Ltd. v. C. Visalakshi and Anr. (supra) in paragraphs 6 & 7 it is held as follows:
6. ...It is pertinent to point out that when the Complaint was filed before the lower Court, the defect that was found in the notice, was rectified, and it was placed before the Court, but without rectifying the defect what was found in the notice issued to the opposite party. But, this would not satisfy the legal requirements. The legislative intent of a notice in a proceeding u/s 138 of the Negotiable Instruments Act is making the opposite party put on notice as to the demand found therein; and that he should meet the demand within the stipulated time, and if not, the prosecution has got to be launched. But, in the instant case, the notice what was issued prior to the proceedings, has got to be termed as only defective.
7. Now, at this stage, it would be worthwhile to make mention of the decision of the Supreme Court in K.R. Indira v. Dr. G. Achinarayana 2004(1) L.W. (Cri.) 438, wherein it has been held thus: ''Demand for amount covered by bounced cheque is conspicuously absent in notice issued. Notice is imperfect, since it dons not contain any demand for payment of cheque amount. Complaint filed by the complainant and based on imperfect notice issued to drawer of cheques is not maintainable.
This Court is of the considered opinion that once the private complaint was filed by the complainant on the basis of the notice, which was not clear as to the cheque amount, the notice was imperfect and defective in law. Needless to say that on the basis of the defective notice, neither the proceedings u/s 138 of the Act can be launched or maintained, nor the accused can be found guilty....
11. Countering the said submissions Mr. I.C. Vasudevan, learned Counsel appearing for the respondent submitted that though in the notice dated 7.7.2006, the name of the petitioner had been stated as P. Loganathan instead of P. Lingappan, the said mistake had been rectified in the rejoinder dated 31.7.2006. But the rejoinder had been evaded to be received by the petitioner and hence the rejoinder got returned with a postal endorsement ''intimation''. Since the rejoinder notice had been returned with an endorsement ''intimation'' it will amount to service of notice on the petitioner and the Counsel would submit that the rejoinder sent will relate back to 7.7.2006, the date of original notice and as such the question of limitation does not arise. He further submitted that when admittedly notice has been sent to the Firm in time the said notice will amount to notice to the petitioner herein who is admittedly a Partner of the first accused-Firm. In support of the above said contentions, the learned Counsel appearing for the respondent would rely upon the following decisions:
(i)
(ii) Girish Chandra Pandey v. Kanhaiyalal Chandak and Anr. 1998(2) BC 686.
12. In the decision in Sri Meenakshi Saw Mill v. Cauvery Timber Company Pvt. Ltd., (supra) in paragraphs 5 and 10, it is observed as follows:
5. The crux of the issue highlighted by the learned Counsel from the above mentioned facts is that in the notice dated 15.9.2001 issued by the complainant/respondent, mention has been made that it is on behalf of the M/s. Chinnammal Timber Company Pvt. Limited, Saravanampatti, Coimbatore-35, the notice has been issued, thereby calling upon the accused/petitioner to repay the money within 15 days thereof to M/s. Chinnammal Timber Company Pvt. Limited. However, a reply notice dated 23.9.2001 had been sent by the accused/petitioner, denying the allegations that he had any business transactions with M/s. Chinnammal Timber Company Pvt. Limited." in the said reply, the accused/petitioner had stated that Timbers had been purchased only from M/s. Cauvery Timber Company Pvt. Limited and the cheque, in question, were also issued only in favour of them. It is on the receipt of the said notice, the complainant/respondent had issued another notice dated 24.9.2001, on behalf of Cauvery Timber Company Pvt. Limited thereby mentioning about the dishonour of the three cheques, which are the subject-matter of the issue and called upon the accused/petitioner to pay the cheque amounts. In addition to the above averments, the notice also contained a paragraph, which reads as follows:
I have already sent a registered notice dated 15.9.2001 to you in the above matter. But in the said legal notice dated 15.9.2001, it is wrongly typed as ''under instructions from my client Chinnammal Timber Company Pvt. Limited.'' instead of ''Cauvery Timber Company Pvt. Limited.'' You have issued the aforesaid cheque in favour of my client-Cauvery Timber Company Pvt. Limited. Cauvery Timber Company Pvt. Limited and Chinnammal Timber Co. (P) Ltd. are sister concerns. Now this notice is issued by Cauvery Timber Co. Pvt. Limited by rectifying the mistake in legal notice dated 15.9.2001.
10. I fully agree with the contention of the Counsel appearing for the accused/petitioner and in view of the judgment of the Apex Court cited supra, I have no hesitation to hold that the notice dated 15.9.2001 is the one that has to be taken into account for computing the period of limitation. Though the notice dated 15.9.2001 shows that it has been issued on behalf of Chinnammal Timber Company Pvt. Limited, when a subsequent notice dated 24.9.2001 had been issued to rectify the mistake that has occurred in the notice dated 15.9.2001, to the effect that the notice has been issued on behalf of the Cauvery Timber Mart [Cauvery Timber Company Pvt. Limited], then automatically the period of limitation has to be computed only from 15.9.2001 only and by applying the said ratio, if the period of limitation is computed, then the prosecution is clearly barred by limitation.
In the said decision while considering whether the issuance of second notice will vitiate the complaint, the learned Judge has observed that since the second notice is a rejoinder notice and the same has been issued as amendment, it got merged with the prior notice and hence it cannot be said that the statutory notice is not a proper notice in the eye of law.
13. In the decision in Girish Chandra Pandey v. Kanhaiyalal Chandak (supra), the Calcutta High Court has held that when a firm is served with a notice, each partner need not be served with separate notice individually and the failure of the partnership firm to receive the notice will not raise any cause of action. Basing reliance on the above said decisions, the learned Counsel submitted that the rejoinder notice dated 31.7.2006 got merged with legal notice dated 7.7.2006 and as such the defect in the notice dated 7.7.2006 is rectified and the question of limitation does not arise. The learned Counsel further submitted that since notice has been sent to the firm it will amount to service of notice on the petitioner who is the partner of the firm. The learned Counsel further submitted that on realising that the petitioner''s name had been wrongly mentioned in the legal notice, rejoinder was sent to the petitioner by showing his correct name.
14. I have carefully considered the above submissions made by the learned Counsel on either side.
15. As laid down in the decision in B. Roman and 2 Ors. v. Shasun Chemicals and Drugs Ltd. (supra), the starting of the process of service of notice on the person who represents the Firm, the drawer of the cheque and only if in spite of the demand of the cheque amount through service of notice the amount covered by the cheque is not paid within the stipulated time, the cause of action for filing the complaint would arise. The purpose of issuing a notice to the Firm as well as the Partners of the Firm is to put them on notice that they have to pay the amount covered by the cheque in question within the stipulated time of 15 days from the date of receipt of the notice as otherwise they are liable to be proceeded u/s 138 of the Negotiable Instruments Act. Only on their failure to pay the amount covered by the cheque, within the period of 15 days, the cause of action arises and not before that. Therefore, the service of notice is a must. Such notice should be sent within the time stipulated by the Act.
16. In this case, the notice of intimation from the Hunk about the return of the cheque was received by the complainant/respondent herein on 24.6.2006 and the legal notice was issued on 7.7.2006 i.e. within the stipulated time hut unfortunately legal notice was sent to a wrong person instead of to the petitioner herein who is a Partner of the first accused-Firm and as such there was no valid notice as far as the petitioner is concerned and subsequent lending of rejoinder dated 31.7.2006 i.e. after the stipulated period cannot cure the defect, In the considered view of this Court since the very name of the Partner of the first accused-Firm has been incorrectly stated, such a mistake cannot be considered to be an Insignificant mistake which can be cured. Similarly this cannot be considered to be a typographical error.
17. In the decision in Sri Meenakshi Saw Mill v. Cauvery Timber Company Pvt. Ltd. (supra), the notice in question came to be issued on behalf of M/s. Chinnammal Timber Company Private Limited and when the said mistake came to the knowledge of the complainant from the reply sent by the accused, the complainant sent another notice stating that by mistake the name has been wrongly mentioned and it was also stated that both the Companies were sister concerns. While considering the same, the learned Judge has held that the period of limitation has to be reckoned from the date of original notice. Thus the facts of that decision are totally different and the ratio laid down therein, in my view, does not apply to the facts of this case.
18. In the light of the Division Bench decisions in B. Raman and 2 Ors. v. Shasun Chemicals and Drugs Ltd. (supra), the decision in Girish Chandra Pandey v. Kanhaiyalal Chandak (supra), of the Calcutta High Court cannot be relied upon.
19. It is pertinent to point out that admittedly the notice sent to the Firm and other Partners namely A1 and A2 were not actually served on them. But in view of the postal endorsement contained in the returned cover namely "intimation" it can be taken as deemed service on Al and A2 until the contrary is proved by them. But such deemed service cannot be deemed to be a valid notice as far as the petitioner (A3) is concerned. If there had been actual service of notice on the Firm it could be held that notice to the Firm will amount to notice to the Partners and vice-versa.
20. Therefore, in the considered view of this Court the contention of the learned Counsel appearing for the petitioner merits acceptance and the contention of the learned Counsel appearing for the respondent is liable to be rejected and accordingly rejected. For the above said reasons, the Criminal Original Petition succeeds and the same is allowed. Consequently the connected M.P. is closed.
