Sri. P.G. Sukandaraj Rao vs Smt. Chithra

Hon''ble Mr Justice K.N. Keshavanarayana

This appeal by the complainant is directed against the judgment and order dated 27.2.2006 passed by the XVIII Additional CMM, Bangalore in C.C. No. 36801/2001 acquitting the respondent / accused of the charge levelled against her for the offence punishable u/s 138 of Negotiable Instruments Act (for short ''the N.I. Act'').

The appellant filed private complaint against the respondent alleging offence punishable u/s 138 of the N.I. Act inter alia contending that the accused borrowed a sum of Rs. 1,50,000/- from the complainant as hand loan on 18.5.2000 with an understanding that she would repay the said amount with interest at 24% per annum within six months; that the accused along with her sister executed on demand promissory note and consideration receipt in favour of the complainant for the said amount; that even after expiry of six months the accused did not repay the said amount and when the complainant approached her for repayment of the amount she pleaded her inability to arrange for the amount and requested for grant of further time of three months for repayment; that at that time the accused issued post dated cheque bearing No. 0894036 dated 75.6.2001 drawn on Canara Bank, Nandidurga Road Branch for Rs. 1,50,000/- in favour of the complainant and assured that she would make arrangement for honouring the said cheque on the date of presentation; that when the complainant approached the accused for payment of the amount covered under the said cheque, the accused requested the complainant not to present the same as she could not arrange the money and requested the complainant to present the cheque only during October 2001 and accordingly, the complainant presented the cheque on 10.10.2001 Mthrough his banker but the cheque was returned unpaid with banker''s endorsement "insufficient funds"; that immediately the complainant caused notice to the accused informing her about dishonour of the cheque and called upon her to pay the amount covered under the cheque within the period allowed under the law; that though the said legal notice sent through Registered Post Acknowledgement Due returned with postal shara "not claimed", however legal notice sent under certificate of posting has been received by the accused; that in spire of the same, the accused has failed to pay the amount covered under the cheque. Therefore, the accused is guilty of the offence punishable u/s 138 of the N.I. Act.

The respondent. / accused on her appearance befor the learned Magistrate pleaded not guilty for the accusations made against her and claimed to be tried. In support of his contention, the complainant examined himself as PW. 1 and produced documentary evidence. The accused examined herself as DW.1 and her husband as DW. 2. She also produced documentary evidence. Ex.P.2 is promissory note and Ex. P.3 is receipt said to have been executed by the accused.

The defence of the accused was that she did not borrow the amount of Rs. 1,50,000/ from the complainant as stated in the complaint at any time nor the cheque in question was issued for discharge of debt or liability due by her at any time. According to her, the complainant was running a chit and she and her sister were subscribers to the chit run by the complainant and when she, as successful bidder received the chit amount, on insistence by the complainant she delivered signed blank promissory note as well as cheque and subsequently the signed blank cheque has been misused by the complainant. Thus according to her, she was not due any amount to the complainant as such she is not guilty of the offence punishable u/s 138 of the N.I. Act; that during 1999 she was married to one Chandrashekar and till then she was staying with her parents and after her marriage she started living with her husband at House No. 176, 3rd Main Road, Kalappa Layout, HAL Post, Banglaore-17 where she resided till May 2004 and therefore, notice purported to have been issued by the complainant to the address of her father has not been received by her as such there was no proper notice, therefore, the offence u/s 138 of the N.I. Act is not made out.

The learned Magistrate on assessment of oral and documentary evidence by the Judgment under appeal, acquitted the accused holding that the complainant has failed to prove the existence of debt and the cheque having been issued for the discharge of such debt. The learned Magistrate also held that the documentary evidence produced by the accused as per Ex.D.1 which is admitted by the complainant would show that it was a chit transaction and therefore the say of the accused that the cheque in question was delivered as a signed blank cheque in relation to the chit transaction appears to be probable and therefore the learned Magistrate held that the cheque in question was not issued for discharge of debt or liability. The learned Magistrate also held that the notice said to have been issued by the complainant in compliance of clause (b) of Section 138 of the N.I. Act was not properly addressed to the accused and therefore there cannot be a deemed service of notice as such in the absence or any proof regarding service of notice on the accused, the offence u/s 138 of the N.I. Act is not made out. In that view of the matter. the learned Magistrate acquitted trie accused and dismissed the complaint. Aggrieved by the said judgment of acquittal, the complainant is in appeal before this Court.

I have heard the learned counsel appearing for the appellant as well as the respondent. Perused the records and the judgment under appeal.

There is no dispute that the cheque Ex.P. I relates to the account held by the accused in Canara Bank. Nandidurga Road Branch. Bangalore and it bears her signature. Ex.P.2 is the promissory note and Ex.P.3 is the consideration receipt, said to have been executed by the accused. The accused in her cross-examination has not disputed her signature found on Ex.P.2 and Ex.P.3. However as noticed supra, it was her specific defence that the cheque as well as promissory note were delivered to the complainant in a blank condition and the same has been subsequently filled in by the complainant. It was also her defence that there was no loan transaction between the complainant and herself but on the other hand she was a subscriber to the chit run by the complainant. In order to prove the same she relied on Ex.D.1- statement of account. PW. 1 in his oral evidence though at one stage denied of running any chit., later admitted that the accused as well as her sister were regularly paying the monthly installments towards the chit. Admission in this behalf is as under:

From the above admission, it is clear that there was some chit transaction between the complainant and the accused. In the cross-examination, PW. 1 has admitted his signature found on Ex.D. 1. However, he tried to come out with an explanation that particulars mentioned in Ex.D. 1 relate tc monetary transaction between his younger brother and the accused According to him. he was receiving money as mentioned in Ex.D.1 from the accused and he was handing over them to his younger brother Prakash. However as rightly noticed by the learned Magistrate, the complainant has not examined his younger brother Prakash to show that the amounts, receipt of which have been acknowledged in Ex.D.1. relate to the transaction between his younger brother Prakash and the accused. No doubt the complainant sought to produce certain documents such as cheque, marked as Ex. P. 10: promissory note and account extract purported to be relating to transaction between his younger brother and the accused. Promissory note and account extracts are not marked. Merely producing certain documents purporting to be in relation to transaction between brother of the complainant and the accused itself would not establish that the payment received under Ex.D.1 were towards that transaction between his brother and the accused. It is not forthcoming as to why the complainant should go on receiving the money from the accused and acknowledge the same if it relates to the transaction between his younger brother and the accused. The best person to explain this was the complainant''s brother himself and non-examination of his brother has been rightly viewed seriously by the learned Magistrate. The contents of Ex.D.1 coupled with admissions made by the accused regarding chit transaction substantiates the defence theory that there was no loan transaction between the parties but the transaction was oniy a chit transaction. As could be seen from Ex.D.1 various monthly installments have been paid by the accused and her sister and the same have been acknowledged by the complainant. It is also pertinent to note that in Ex.D.1 a sum of Rs. 16,800/-has been deducted by mentioning as "Prakash Chit amount" and after deducting the same, the total amount due has been mentioned as Rs. 3,84,800/-. If really the transaction mentioned in Ex.D.1 related to Prakash, brother of the complainant, there was no occasion for deducting the amount outstanding in the chit run by Prakash. This also falsifies the case of the complainant. Therefore, in my considered opinion, the learned Magistrate is justified in holding that Ex.D.1 relates to the transaction between the complainant and the accused and it was a chit transaction and not a loan transaction. In the light of these, the learned Magistrate is justified in accepting the defence theory that the cheque in question was not issued for discharge of any debt or liability. On the other hand, the defence theory that the cheque - Ex.P.1 was delivered as a blank cheque appears to be highly probable. The said finding recorded by the court below is sound and reasonable having regard to the evidence on record. Therefore, it does not call for interference by this Court.

As noticed supra, yet another ground on which the learned Magistrate dismissed the complaint was that there was no proper notice as required by law and therefore there was no cause of action for the complainant to lodge the complaint. Reading of Section 138 of the N.I. Act makes it clear that several factors constitute cause of action for the drawee of the cheque to file a complaint. The cause of action for the drawee of the cheque to file a complaint would arise upon failure of the drawer of the cheque to pay the amount covered under the cheque within 15 days from the date of receipt of the notice issued by the drawee making a demand for payment of money. Therefore, the failure on the part of drawer of the cheque to pay the amount covered under the dishonoured cheque within 15 days from the date of service of notice of demand in writing on the drawer of the cheque, is the ultimate factor which gives cause of action to the drawee of the cheque to file the complaint. Under these circumstances, it is incumbent upon the complainant to prove service of notice on the respondent - accused.

In the case on hand according to the complainant, the intimation as to the dishonour of cheque was received by him from his Bank on 12.10.2001 and thereafter on 20.10.2001. he caused a legal notice as per Ex.P.6 and notice sent through Registered Post Acknowledgement Due was returned with postal shara " not claimed." However according to the complainant, the copy of notice sent to through certificate of posting has been served on the accused. As noticed supra, it is the specific defence of the accused that the notice was not properly addressed to her. As could be seen from Ex.P.6. notice was addressed to the accused as under:

Smt.Chitra, W/o Chandrashekar, No.41 (111), I Main Road, Jayachamarajendra Nagar, Bangalore-560 006.

Ex.9 is the returned postal cover with an endorsement "not claimed return to the sender". In her evidence, the accused has stated that in the year 1999 she married one Chandrashckar; after her marriage she started residing in her husband''s house at No. 176, 3rd Main Road, Kalappa Layout, HAL Post, Bangalore-17 and they resided in the said address till May 2004 and thereafter they have been residing at No. 2855, 8th Main Road, 2nd Block, Kumararswamy layout, Bangalore. She has further stated that before her marriage she was residing with her parents at House No. 41(111), 1st Main Road, J.C. Nagar, Bangalore and after her marriage she was not residing in her parental home and at no point of time she along with her husband resided in her parental home. PW. 1 in cross-examination has admitted that the address mentioned in the notice-Ex. P.6 is the address of the parents of the accused. PW. 1 in the cross-examination has admitted that in the year 1999 accused married one Chandrashekar. However he has pleaded ignorance to the suggestion that after her marriage in the year 1999 the accused started residing in House No. 176, 3rd Main Road, Kalappa Layout, HAL Post, Bangalore-17. The accused examined her husband as DW.2, who in his evidence has reiterated that at the time of his marriage with the accused, he was residing in House No. 176, 3rd Main Road, Kalappa Layout, HAL Post, Bangalore-17 and after the marriage he continued to reside in the said address with the accused till May 2004. In the cross-examination of DWs. 1 and 2 suggestions have been put to them that they were not: residing in the said address which have been denied by the witnesses. In view of the fact that the accused married DW. 2 in the year 1999, as admitted by PW. 1, it is reasonable to presume that after the marriage the accused started residing with her husband. Absolutely no evidence is placed by the complainant to show that even after the marriage the accused continued to reside with her parents. In the cross-examination of DWs. 1 and 2 nothing is elicited to show that they were not residing in House No. 176, 3rd Main Road, Kalappa Layout, HAL Post, Bangalore-17 nor there is anything to indicate that even after the marriage the accused continued to stay with her parents. ExS. D.4 and D.5 produced by the DW.2 would further strengthen their defence that after the marriage DWs. 1 and 2 resided in the aforesaid address till May 2004. Therefore, the evidence on record would satisfactorily establish that after her marriage in the year 1999 the accused resided with her husband DW.2 at No. 176, 3rd Main Road, Kalappa Layout. HAL Post, BangaLore-17. Admittedly, the notice Ex.P.6 was not sent to the said address. On the other hand, it was sent to the address of the parents of the accused. Of course, DW. 1 in her cross-examination has admitted that whatever communication addressed to her and received in the parental home would be handed over to her. However, that admission by itself cannot be a ground to draw a presumption of deemed service.

Section 27 of the General Clauses Act, 1897 provides for deemed service provided the document is properly addressed and posted. In the case on hand, though it is shown that notice as per Ex.P.6 was sent by Registered Post Acknowledgement Due in the name of the accused, but it was not sent to her proper address where she was residing with her husband. On the other hand, it has been sent to her parental address. Therefore, with aid of Section 27 of the General Clauses Act, presumption as to the deemed service cannot be drawn.

According to the complainant, the notice was also sent by certificate of posting. Ex.P.8 is the acknowledgment for having sent the notice under certificate of posting which is dated 8.11.2001. Again the notice sent under certificate of posting was also addressed to the parental house of the accused and not to her husband''s house where she was residing with her husband. Therefore, even if it is assumed that the notice sent by certificate of posting has been received in the said address, it cannot be held that it was received by the accused. In addition to this, notice by certificate of posting was dispatched on 8.11.2001. As noticed supra, the intimation regarding dishonour of cheque was received from the banker of the complainant on 12.10.2001. The Law which was in force as on that day required the drawee of the cheque to make a demand in writing within 15 days from the date of receipt of the information by him from the Banker regarding return of cheque as unpaid. Thus the notice under certificate of posting was dispatched beyond the period of 15 days from the date of receipt of the information from the bank regarding return of cheque unpaid. Therefore, on the basis of Ex.P.8 it cannot be said that there was a proper notice. Looking from any angle, there was no proper service of notice from the accused Therefore, the offence u/s 138 of the N.I. Act is not made out. In this view of the matter, the findings recorded by the learned Magistrate to acquit the accused are sound and do not call for interference by this Court.

Accordingly, the appeal is dismissed.