M. K. Thakker
1. This application is filed seeking leave to prefer an appeal against the judgment and order of acquittal passed by the learned Chief Judicial Magistrate, Ahmedabad (Rural) at Mirzapur, Ahmedabad in Criminal Case No.3881 of 2017 dated 09.11.2020.
2. It is the case of the complainant that the complainant is the Bank and has provided the financial facilities to the respondent Nos.1 and 2 against the mortgage of the property. For the repayment of the loan amount, cheque bearing No.065837 of Rs.5,00,000/- was issued and signed by the respondent No.2 and on depositing the same, it was dishonored with an endorsement of ‘funds insufficient’. On receiving the intimation from the concerned Bank, notice was issued, which was returned with an endorsement of ‘refused’. Thereafter, on following the due procedure under the Negotiable Instruments Act, 1886 (‘the N.I.Act’ referred hereinafter) the private complaint came to be filed before the competent court, wherein the respondent-accused appeared on receiving the summons and has claimed to be falsely implicated. In order to prove charge against the respondent-accused, the complainant himself was examined below Exhibit 3 and has produced 23 documentary evidence and at the end, after considering the evidence and the arguments advanced by the learned advocates for the respective parties, learned trial Court has acquitted the respondent-accused from the offence punishable under Section 138 of the N.I.Act, which is the subject matter of challenge before this Court.
3. Heard the learned advocate Mr.Ekant Ahuja for the applicant.
4. Learned advocate Mr.Ahuja submits that the learned trial Court has committed an error in acquitting the respondent-accused on the ground that the complaint did not satisfy the mandatory requirement as the notice under Section 138 of the N.I.Act came to be issued upon the respondent-accused. Learned advocate Mr.Ahuja submits that the notice, which is the part of record and was produced before the learned trial Court below Exhibit 21 having the name of the accused No.2 and as the accused No.1, whose name was stated in the envelop at Exhibit 17, has refused the same and it would amount to valid service of notice in the eye of law.
4.1. Learned advocate Mr.Ahuja submits that though the presumption, which is in favour of the complainant, has neither been rebutted nor the signature was disputed, learned trial Court has committed an error in acquitting the respondent-accused on the technical ground.
4.2. Learned advocate Mr.Ahuja has relied on the decisions rendered by the High Court of Tripura at Agartala in the case rendered in Criminal Appeal no.20 of 2022 and has submitted that reading of sub-clause (b) of section 138 of the N.I.Act, the payee has to make the demand by giving notice in writing. That was the only requirement to complete the offence and on failure of the drawer to pay the cheque amount within 15 days from the date of such giving of notice, the cause of action would start from that day itself. Learned advocate Mr.Ahuja submits that the learned trial Court ought not to have interpreted law in a manner which helps a dishonest evader and clips an honest payee as the same would defeat the very legislative measures.
4.3. Learned advocate Mr.Ahuja submits that the respondents-accused, who are husband and wife residing on the same address and on giving the notice mentioning the name of both the persons which was returned with an endorsement of refused would amount to a valid service of notice to both the respondents-accused, though the envelop mentioned the name of the accused No.1 only. Learned advocate Mr.Ahuja submits that the financial facilities were availed by both the respondents-accused and have signed the loan application form as well as the complainant and has also produced the loan sanction letter and for payment of the loan amount, the accused No.2 has issued the cheque in favour of the complainant from her account. Therefore, even if, envelop shows the name of the accused No.1 only then also it cannot be said that the accused No.2 is not having the knowledge of dishonor of the cheque as the accused Nos.1 and 2 are residing at the same address.
4.4. Learned advocate Mr.Ahuja submits that when the complainant established that cheque in question got dishonored, which was signed by the accused No.2, it can be ascertained that with an intention to repay the loan, the respondent No.2 has issued the cheque and on dishonoring the same, she is liable to be prosecuted under Section 138 of the N.I.Act. Learned advocate Mr.Ahuja submits that in absence of cogent and convincing reasons assigned by the learned trial Court while acquitting the respondents-accused, present application seeking leave to prefer an appeal is required to be granted and appeal is required to be admitted.
5. Considering the submissions made by the learned advocate as well as on perusing the record and proceedings, it transpires that the respondent-accused had availed the financial facilities from the complainant and at that point of time, the promissory note was also signed by both the respondents-accused. The loan papers also suggest that both the respondents-accused had signed the mortgage deed and thereafter, the loan was sanctioned and credited in their account. For repayment of the aforesaid loan, the cheque below Exhibit 90 issued by the respondent No.2 i.e. Parul Nitin Rajguru from her own account maintained with Bank of India, Panchwati Branch, Ahmedabad. On dishonoring of the cheque, the notice is issued by the complainant, which is produced below Exhibit 21 referring the name of both the respondents-accused. The envelop suggests the name of accused No.1 Nitinbhai Narendrabhai Rajguru as well as the postal receipt produced below Exhibit 18 also suggests the name of accused No.1 only. The said envelope was returned with an endorsement of “refused”, therefore, it can be averred that the notice is not refused by the accused No.2, who is the signatory of the cheque.
6. At this stage,Sub-section (b) and Sub-Section (c) of Section 138 of the N.I.Act is required to be referred which is reproduced herein below:
“138(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
138(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.”
7. The words in clause (b) of proviso to section 138 of the N.I.Act shows that payee has the statutory obligation “to make a demand by giving a notice”. Giving of anything as ordinarily understood is not complete unless it has reached the hands of the person to whom it has to be given, however, in the eye of law, giving is complete in many matters where it has been offered to a person, but not accepted by him. Tendering of a notice in a law means giving of a notice even though the person to whom it is tendered refused to accept it.
8. At this stage, the judgment of the Apex Court in the case of K. Bhaskaran vs. Sankaran Vaidhyan Balan and Another, reported in (1999) 7 SCC 510 is required to be referred which is produced hereinbelow:
“18. On the part of the payee he has to make a demand by “giving a notice” in writing. If that was the only requirement to complete the offence on the failure of the drawer to pay the cheque amount within 15 days from the date of such “giving” the travails of the prosecution would have been very much lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days “of the receipt” of the said notice. It is, therefore, clear that “giving notice” in the context is not the same as receipt of notice. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the notice to the drawer in the correct address.”
9. In the case of C.C. Alavi Haji vs Palapetty Muhammed and Another, reported in (2007) 6 SCC 555 where the Apex Court has held as under:
“6. As noted hereinbefore, Section 138 of the Act was enacted to punish unscrupulous drawers of cheques who, though purport to discharge their liability by issuing cheque, have no intention of really doing so. Apart from civil liability, criminal liability is sought to be imposed by the said provision on such unscrupulous drawers of cheques. However, with a view to avert unnecessary prosecution of an honest drawer of the cheque and with a view to give an opportunity to him to make amends, the prosecution under Section 138 of the Act has been made subject to certain conditions. These conditions are stipulated in the proviso to Section 138 of the Act, extracted above. Under Clause (b) of the proviso, the payee or the holder of the cheque in due course is required to give a written notice to the drawer of the cheque within a period of thirty days from the date of receipt of information from the bank regarding the return of the cheque as unpaid. Under Clause (c), the drawer is given fifteen days time from the date of receipt of the notice to make the payment and only if he fails to make the payment, a complaint may be filed against him. As noted above, the object of the proviso is to avoid unnecessary hardship to an honest drawer. Therefore, the observance of stipulations in quoted Clause (b) and its aftermath in Clause (c) being a pre-condition for invoking Section 138 of the Act, giving a notice to the drawer before filing complaint under Section 138 of the Act is a mandatory requirement.”
10. Keeping in mind the above ratio, if the cross examination of the complainant is to be referred then during the cross examination, complainant admits that no notice is issued to the accused No.2 i.e. Parulben and in the eye of law, the issuance of the notice is mandatory. The “RPAD slip suggests the name of Nitinbhai Rajguru.” The postal receipt also suggests the name of Nitinbhai only and the cheque is signed by the accused No.2 i.e. Parulben. Therefore, from above admissions, it appears that the cheque was issued from the individual account of the accused No.2 and the notice has not been sent to the accused No.2 and envelope of the notice which was returned with an endorsement of “refused” suggests the name of the accused No.1 only.
11. The purpose of notice must also be borne in mind. Notice is not an empty ritualistic formality. The drawer of the cheque must be given an opportunity to reverse the effect of dishonor within the specified period. The object of notice is to give a chance to drawer of the cheque to rectify her omission. On completion of the period specified in the notice, the cause of action would arise thereafter only. The legislation while enacting the provisions consciously imposed certain conditions, one of the conditions was service of notice, making a demand of payment of amount of the cheque. Such notice has to be issued within a period of 30 days from the date of receipt of the information from the Bank with regard to return of the cheque as unpaid. The statute envisaged application of the penal provisions and therefore, penal provisions should be construed strictly. The conditions precedent were for his service of notice and in absence of fulfilling the requirement under Section 138 of the N.I.Act, the complaint would not be maintainable.
12. The judgments which was relied by the learned advocate were on behalf of the accused, wherein wife of accused received the notice and inspite of receiving such notice, accused persons did not take any steps to liquidate their liability and has failed to make payment within stipulated period. In the background of the above facts, the learned trial Court has held that the wife of the respondent had duly received the notice and it was nowhere pleaded by the respondent that he and his wife were living separately during the relevant point of time hence, burden was upon the respondents-accused to substantiate that they did not receive the notice.
13. The case on hand is on the fact that the accused Nos.1 and 2 are residing on same address, where the notice, mentioning the name on the envelope of only accused No.1 was posted for the dishonor of the cheque, which was signed by the accused No.2, was refused by accused No.1. In that scenario, it cannot be said that accused No.2, who is the signatory of the cheque was in the knowledge with regard to the dishonor of the cheque and the service of notice. Therefore, this Court is of the view that the learned trial Court was justified in dismissing the complaint in absence of complying the mandatory requirement under Section 138 of the N.I.Act and hence, leave as prayed for is not required to be granted.
14. Resultantly, this application fails and dismissed accordingly.
