Rakesh Kushwaha vs State of U.P. and Others

Vijay Prakash Pathak, J.—This petition u/s 482, Cr.P.C. has been filed by the petitioner with the prayer to quash the further proceedings of complaint case No. 1202/08, Nawab Singh v. Rakesh Kushwaha u/s 138 of the Negotiable Instruments Act, (hereinafter referred to as the Act), PS Chaubeypur, District Kanpur Dehat and also to quash the impugned summoning order dated 25.6.07 passed by the Addl. Civil Judge, (Jr. Division)/J.M., Kanpur Dehat in the aforesaid case. The brief facts of the case are that opposite party No. 2 Nawab Singh Yadav filed a complaint against the applicant Rakesh Kushwaha u/s 138 of the Act alleging therein that on 5.1.07 the applicant took a loan of Rs. 30,000/- from the complainant in order to complete his business and thereafter the complainant again advanced Rs. 2000/- to him. In total Rs. 32,000/- was borrowed by the applicant, who assured to return the same till 15th of February, 2007. When the applicant did not return the money borrowed, the opposite party, No. 2, demanded the same from him, on which the applicant sought further time of 15 days and gave a cheque of Rs. 32,000/- of Union Bank of India, Branch Ravatpur, Kanpur, to the opposite party No. 2 and told him to encash the same from the Bank-after February. The opposite party No. 2 waited till 27.3.07 with a belief that the applicant will return his money in cash instead of cheque given but in vain and on the next day i.e. on 28.3.07, when he presented the said cheque for encashment in the Bank, aforesaid, the same was dishonoured as sufficient money was not there in the account. Thereafter the opposite party No. 2 met the applicant many times for getting his money back but inspite of assurance given, the applicant did not return his money and instead on 10.4.07, the applicant abused him and threatened to kill him. It is also alleged that a registered notice was also sent by the opposite party No. 2 through his counsel on 11.4.07, but no reply was given to the same nor any money was returned.

The learned Magistrate after taking cognizance of the complaint, recorded the statement of the complainant u/s 200, Cr.P.C. and after considering the contents of the complaint, statement of the complainant as well as the documentary evidence i.e. copy of the notice as well as the cheque, prima facie found the offence u/s 138 of the Act to be made out against the applicant and accordingly summoned him to face trial for the said offence.

Heard Sri Prashant Kumar Singh holding brief of Sri Manvendra Singh, learned counsel for the applicant, Sri Deepak Gaur, learned counsel for the opposite party No. 2 as well as learned AG A and perused the record.

Learned counsel for the applicant has contended that the learned Magistrate has illegally summoned the applicant to face trial u/s 138 of the Negotiable Instruments Act without applying his judicial mind. It is further contended that the opposite party No. 2 in his complaint did not mention the date when he presented cheque for encashment in the Bank nor did he mention the date when he received the information from the Bank regarding dishonour of the cheque. Thus it is submitted that there was no cause of action for the complainant (opposite party No. 2) to file the instant complaint. It is further contended that the date of service of notice upon the applicant has not been mentioned in the complaint as required u/s 138(c) of the Act and hence for this reason also, no cause of action can be said to have accrued to the complainant to file the present complaint against the applicant.

Per contra, learned counsel for the opposite party No. 2 has contended that against the loan liability of Rs. 32,000/- against Rakesh Kushwaha (applicant), a cheque payable at Union Bank of India, Branch Ravatpur, Kanpur Dehat was given for repayment of the loan. The said cheque was presented by opposite party No. 2 on 28.3.07 in his Kanpur Regional Gramin Bank, Chaubeypur for its encashment but the same was not cleared and was returned by the said Branch of Union Bank of India with a memorandum that the amount is not sufficient for clearing off the cheque and hence the cheque was dishonoured on its presentation on the same day. It is further contended that thereafter a demand was made by opposite party No. 2 but the applicant did not repay the said amount. Therefore, in compliance of the proviso (b) to Section 138 of the Act, within 15 days from the date of 28.3.07, a registered notice dated 11.4.07 was sent to the applicant making demand for repayment but inspite of service of the said notice, the amount was not paid and hence, the complaint along with true copy of cheque, memorandum of the Bank dated 28.3.07 issued by Union Bank of India, dishonouring the cheque, notice dated 11.4.07 with postal receipt was filed.

I have considered the arguments advanced on behalf of parties'' counsel and perused the entire record.

In order to set the controversy at rest, Section 138 of the Act and the conditions stipulated in its proviso are very relevant. It is provided in this Section that a person is liable for prosecution if any cheque for the discharge, in whole or in part, of any debt or other liability, is returned by the Bank 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 that Bank. It appears that this Section was enacted to punish those unscrupulous persons who purported to discharge their liability by issuing cheques without really intending to do so. However with a view to avert unnecessary prosecution by an honest drawer of the cheque and with a view to give an opportunity to him to make amends, the prosecution u/s 138 of the Act has been made subject to certain conditions. These conditions are stipulated in proviso to this Section, which are reproduced hereinbelow:--

Provided that nothing contained in this section shall apply unless--

(a) that 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 (substituted for "within fifteen days by Act No. 55 of 2002 w.e.f. 6.2.03) 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 lire holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation--For purpose of this section "debt or other liability" means a legally enforceable debt or other liability.

Now I may proceed to examine the contentions raised on behalf of the respective parties'' counsel to see whether conditions as enumerated in proviso to Section 138 of the Act have been complied with and also the case law in this regard.

Learned counsel for the applicant has contended that opposite party No. 2 in his complaint did not mention the date when he presented the cheque for encashment in the Bank nor did he mention the date when he received the information from the Bank regarding the dishonour of the cheque. In this context reference may be made to the complaint itself where it has been asserted that the said cheque was presented on 28.3.07 by the complainant in his Kanpur Regional Gramin Bank, Branch Chaubeypur, which was returned with a memorandum that it exceeds the amount arranged to be paid from that account. Along with the complaint, the copy of the cheque and the memorandum of the Bank i.e. Union Bank of India, dated 28.3.07 were also filed, in which it has been mentioned that the amount of cheque exceeds the amount arranged to be paid.

Thus it is clear that the cheque was presented in time before the Bank but it was returned with the memorandum that the amount exceeds the amount arranged to be paid. Hence it was dishonoured. It is also averred in the complaint itself that when the cheque was dishonoured, the complainant contacted the applicant but he refused to pay the amount and abused and threatened the complainant to kill him. Then a notice dated 11.4.07 through registered post by his counsel Sri Dinesh Chandra Shukla, Advocate was sent to the applicant, which was accepted by the applicant but he neither replied the same in time nor paid the money as promised by him and thereafter the complaint u/s 138 of the Act was filed on 11.5.07 against the applicant.

In this context, the averments made in the affidavit given by the applicant in support of the present petition are also very relevant. The applicant in his affidavit has never denied to have accepted said notice but he has said only this much that the date of service of notice has not been mentioned in the complaint and the same having not been mentioned as required u/s 138(c) of the Act, no cause of action accrued to the opposite party No. 2 to file the complaint.

In the affidavit the petitioner has also denied to have taken any money from opposite party No. 2 and stated that he gave the cheque as surely for transaction of his business and not for discharge of any debt or liability.

Learned counsel for the opposite party No. 2 on the other hand has submitted that the registered notice was sent to the applicant, which was received by him, hence the proviso (c) to Section 138 of the Act has been fully complied with, He has also cited the verdict of Hon''ble Apex Court reported in C.C. Alavi Haji Vs. Palapetty Muhammed and Another, .

The Hon''ble Apex Court in the aforesaid verdict has been pleased to elaborate the question of service of notice in terms of clause (b) of proviso to Section 138 of the Act after considering the verdict of its own Court given in D. Vinod Shivappa Vs. Nanda Belliappa, and the law laid down in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, . Hon''ble Apex Court has been pleased to observe that the words in clause (b) of the proviso to Section 138 of the Act show that payee has a statutory obligation to "make a demand" by giving notice. The thrust in the clause is on the need to "make a demand." It is only the mode for making such demand which the Legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is dispatched, his part is over and next depends on what the sender does. It is also observed that though Section 138 of the Act does not require that notice should be given only by post yet in case where the sender has dispatched notice by post with correct address written on it, the principle incorporated in Section 27 of the General Clauses Act, 1987 could profitably be imported in such a case and it was held that in this situation, service of notice is deemed to have been effected on the sender unless he proves that it was not really served and that he was not responsible for such non-service.

In the said verdict, the observations of D. Vinod Shivappa Vs. Nanda Belliappa, have also been incorporated as it was observed that in each such case, the law is understood to mean that there has been no service of notice, it would completely defeat the very purpose of the Act. It would then be very easy for an unscrupulous and dishonest drawers of a cheque to make himself scarce for sometime after issuing the cheque so that the requisite statutory notice can never be served upon him and consequently he can never be prosecuted. It was further observed that once the payee of the cheque issues notice to the drawer of the cheque, the cause of action to file a complaint arises on the expiry of the period prescribed for payment by the drawer of the cheque. It was also observed that if the complainant is able to prove that the drawer of the cheque knew about the notice and deliberately evaded service and got a false endorsement made only to defeat the process of law, the Court shall presume service of notice. It is however matter of evidence and proof. It has further been observed that it is thus trite to say that where the payee dispatches notice by registered post with correct address of the drawer of the cheque, the principle incorporated u/s 27 of the General Clauses Act would be attracted; the requirement of Clause (b) of proviso to Section 138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in Clause (c) of the said proviso for payment by the drawer of the cheque. Nevertheless, it would be without prejudice to the right of the drawer to show that he had no knowledge that the notice was brought to his address. The Hon''ble Apex Court has further observed that in their opinion therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is well settled that at the time of taking cognizance of the complaint u/s 138 of the Act, the Court is required to be prima facie satisfied that a case under the said Section is made out and the aforenoted mandatory statutory procedural requirements have been complied with. It is further observed that the proviso is not meant to protect unscrupulous drawers who never intended to honour the cheques issued by them, it being part of their modus operandi to cheat unsuspecting persons.

Regarding service of notice by registered post, a single Bench of this Court has also considered in a case reported in Jagmohan Vs. State of U.P. and Another, relying upon the verdict of Hon''ble Apex Court in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, , in which it has been held that where a notice has been dispatched by post at the correct address, such notice shall be deemed to have been served on the sender, unless the sender proves that it was not really served and that he was not responsible for such non-service, which was based on an interpretation of Section 27 of the General Clauses Act, 1897, Therefore, the onus lies on the applicants to show at the trial that they have not received notice and also that they were not responsible for the non service of the same. At the stage, when an application u/s 482, Cr.P.C. is being considered, this plea of the applicants cannot be considered.

Coming to the facts of the present case as has been referred in the earlier part of this judgment, a cheque issued by the applicant in favour of the opposite party No. 2 was presented before the concerned Bank on 28/3/07 but the same was returned with the endorsement dated 28.3.07 that the amount exceeds the amount arranged for in the account and hence the said cheque was dishonoured on that date. Thereafter, a legal notice was sent by registered post on 11.4.07 at the address of the applicant making demand of the said money but inspite of the service of registered notice, the drawer (applicant) of the cheque failed to make the payment of the amount under the dishonoured cheque and thereafter on 11.5.07 the complaint was filed.

As registered notice was sent at the address of the applicant, which has been said to be served by the opposite party No. 2 and even the said notice shall be deemed to be served upon the applicant in view of Section 27 of the General Clauses Act as the said notice has not been returned back after service, hence the onus lies upon the applicant to show at the trial that he has not received notice and also that he was not responsible for non-service of the same.

As regards the averments made by the applicant in his affidavit that he has not taken any money from opposite party No. 2 and he gave the cheque as surety for transaction of his business and not for discharge of any debt or liability, the same are disputed questions of fact which cannot be adjudicated upon at this stage by this Court under its extra ordinary jurisdiction u/s 482, Cr.P.C.

In the above circumstances, in my opinion, the mandatory provisions of proviso (a) (b) and (c) to Section 138 of the Act have been fully complied with and the learned Magistrate has rightly summoned the applicant after considering the entire material on record to face trial u/s 138 of the Act, finding a prima facie case under the said Section to be made out, which does not require interference by this Court under its extra ordinary jurisdiction u/s 482, Cr.P.C. 1 find no infirmity, illegality, irregularity or jurisdictional error in the impugned summoning order. In view of the above considerations, this petition is meritless and is liable to be dismissed.

The petition is accordingly dismissed.