intimation given,not claimed-not deemed delivery-new definition

Equivalent Citation: 2005(1)ALD(Cri)33, IV(2004)BC1, 2004(3)CTC573
IN THE HIGH COURT OF MADRAS
Criminal Appeal No. 352 of 1997
Decided On: 02.04.2004
Appellants: S.S. Ummul Habiba, Proprietor, Alim Auto Supplies
Vs.
Respondent: B. Rajendran
Hon'ble Judges:
R. Banumathi, J.
Counsels:
For Appellant/Petitioner/Plaintiff: M. Ajmal Kahn, Adv.
For Respondents/Defendant: No appearance
Subject: Criminal
Catch Words
Mentioned IN
Acts/Rules/Orders:
Negotiable Instuments Act, 1881 - Sections 138 and 139
Cases Referred:
K. Bhaskaran v. Sankaran Vaidhyan Balan, 1999 (3) CTC 358
Disposition:
Appeal dismissed
Case Note:


(i) Commercial – debt - Sections 138 and 139 of Negotiable Instruments Act, 1881 – only to ensure fairness in business transactions Sections 138 and 139 introduced – fair play and equity is not only required from accused but also from complainant – merely because complainant is holder of cheque he does not stand in a higher position excepting to extent of raising presumption in his favour under Section 139 – by evidence and materials on record presumption stands rebutted – finding of Trial Court that there is 'no legally enforceable debt' is well balanced.

(ii) Presumption of notice – to raise presumption of deemed notice there should be clear averment in complaint that appellant had sent statutory notice on demand intimating dishonour of cheque and that respondents were evading service – in absence of such averment no presumption of deemed notice could be raised – general burden is upon complainant to prove facts constituting sending of notice and deliberate evasion of service of notice by accused.


ORDER
R. Banumathi, J.
1. Complainant in C.C.415/1993 on the file of Judicial Magistrate, Periyakulam is the Appellant. By the Judgment dated 28.8.1996, the Judicial Magistrate, Periyakulam had acquitted the Respondent/accused under Section 138 of Negotiable Instruments Act, 1881 (for short 'N.I.Act'). Aggrieved over the order of acquittal, Complainant has preferred this Appeal.
2. Case of Complainant is that he is doing business of selling auto parts under the name and style M/s. Alim Auto Supplies. The accused and his brother one Kanagaraj are having transport business running two lorries under the name and style "M/s. Angala Easwari & Santhi Lorry Services". The accused purchased auto parts from the complainant's shop on credit for both the lorries.
3. As on 20.5.1992, the outstanding credit balance on account of the two lorries was Rs. 24,415. Towards discharge of part of the balance amount, the accused issued Ex.P.1-Cheque for Rs. 24,400 on 30.9.1992 at Periyakulam drawn on State Bank of India, Theni Branch. The Complainant presented the cheque in Lakshmi Vilas Bank, Periyakulam for collection. The cheque was dishonoured for "insufficient funds". The same was intimated to the Complainant by his Bank under Ex.P.2 - Memo on 9.12.1992.
4. On 19.12.1992, the accused issued Ex.P.3-lawyer's notice demanding the amount due on the cheque. The accused intentionally evaded service of the notice and the notice returned to the sender with the endorsement "intimation given; not claimed". Since the accused evaded the service of notice, it must be deemed to be constructive notice and sufficient service of notice on the accused. The accused failed to pay the cheque amount till 15.1.1993. Hence, the Complaint was filed against the accused under Section 138 of N.I.Act.
5. To substantiate the averments in the Complaint, on behalf of the complainant, complainant examined himself as P.W.1. P.W.2 is the Banker of the complainant. Exs.P-1 to P-6 are marked. No oral evidence was adduced on behalf of Respondent/accused. But Exs.D-1 to D-6 were marked on the side of the accused.
6. The defence is that Ex.P.1-cheque was issued as security for the business transaction of Angala Easwari Lorry alone and there is no legally enforceable debt from the accused. Another lorry by name Santhi Lorry Service is owned and run by the brother of the accused namely, Kanagaraj. Amount payable by the accused was already discharged under Exs.D-4 to D-6 and there is no subsisting debt from the accused. Further case of the defence is that the complainant is not right in clubbing the amount to that of the accused even if there is any amount due from Santhi Lorry.
7. Upon consideration of the evidence and materials, the trial Court found:
(i) while A4-Notice was sent to both accused and his brother Kanagaraj, the said Kanagaraj is not shown as accused in the complaint, which fatally affects the complaint;
(ii) that there is no evidence showing the amount payable by the accused and the complainant failed to establish that. Ex.P.1-Cheque was given to prove the legally enforceable debt due from the accused;
(iii) Ex.P.4-statutory notice was returned with an endorsement "intimation given; not claimed" and that the same cannot be construed as constructive notice and there is no sufficient service of notice upon the accused.
On the above reasonings, finding that the essential ingredients of Sections 138 and 142 of N.I.Act are not proved, the learned Magistrate acquitted the Respondent/accused.
8. Aggrieved over the order of acquittal, the Complainant has preferred this Appeal.
9. The learned counsel for the Appellant/Complainant submitted that once the cheque is issued, the presumption under Section 138 of N.I.Act arises and the trial Court erred in finding that there is no legally enforceable debt from the accused. Drawing the attention of the Court to the averments in Ex.P.4 -Notice and the Statement of Accounts maintained by the Complainant, the learned counsel further contended that when the accused is jointly and severally liable to pay the amount due from the joint business of M/s. Angala Easwari and Santhi Lorry Services, the trial Court committed serious error in finding that there is no legally enforceable debt from the accused. Assailing the findings of the trial Court that there is no sufficient notice and placing reliance upon K. Bhaskaran v. Sankaran Vaidhyan Balan, MANU/SC/0625/1999, the learned counsel further contended that the mere sending of notice to the correct address itself is sufficient compliance of the requirement and the trial Court erred in finding that there was no sufficient notice.
10. In this appeal, though notice was served upon the respondent, the respondent has not entered appearance. His name was printed in the cause list. Though the respondent remains unrepresented, the defence and the contentious points urged by the accused before the trial Court is taken into consideration while appreciating the contentious points urged by the appellant in this appeal.
11. Upon reassessment of the evidence and materials on record, impugned judgment and reasonings for acquittal and submissions of the complainant, the following points arise for consideration in this appeal:
(1) Whether any amount due payable by M/s. Angala Easwari Lorry is proved by the complainant ?
(2) Can the complainant make the claim against the accused (under Ex.P.1 - Cheque) for the amount payable by M/s. Angala Easwari and Santhi Lorry Services claiming the same as the joint business ?
(3) Whether Ex.P-1 is proved to have been issued for legally enforceable debt from the accused ?
(4) Whether the reasonings and the order of acquittal by the trial Court suffer from serious and substantial error warranting interference ?
12. This is an Appeal against the acquittal. Normally in an Appeal against acquittal, the High Court would be very slow to interfere. Unless there are glaring infirmities in the assessment of evidence and the findings suffer from serious and substantial error, this Court would not interfere in the order of acquittal. It is to be seen whether the findings of the Trial Magistrate in acquitting the accused under Section 138 of N.I.Act suffer from such serious infirmity warranting interference.
13. Firstly let us consider the correctness of the findings of the trial Court that there is no legally enforceable debt. Strict liability under Section 138 of Negotiable Instruments Act (hereinafter referred to as 'N.I.Act') can be enforced only when the cheque is issued in discharge of any legally enforceable debt or other liability, partly or wholly. Explanation to Section 138 of the N.I.Act provides that a debt or liability under this Section means only a legally enforceable debt or other liability. To attract the penal provisions under Section 138 of N.I.Act, a cheque must have been drawn by the accused on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part, of any debt or other liability due. That means, the cheque must have been issued in discharge of a debt or other liability wholly or in part.
14. Under Section 139 of N.I.Act, there is presumption, unless the contrary is proved, that the holder of a cheque received the cheque for the discharge, in whole or in part of any debt or other liability. But this presumption is only a rebuttable presumption. The presumption so raised under Section 138 of N.I.Act could be rebutted either by direct evidence or from the facts and the circumstances forthcoming.
15. While there may be a debt payable in existence, that alone is not sufficient to prove that the cheque was drawn in discharge of the debt. If the accused substantially proves that there is dispute on the amount payable and that there is no debt in particular, the presumption is rebutted and the accused cannot be held liable.
16. On the evidence adduced, the trial Court found that Ex.P.1-Cheque was not issued for legally enforceable debt thus finding that the presumption is rebutted. It is to be seen whether this finding of the trial Court suffers from any erroneous approach.
17. According to the Complainant, the accused and his brother Kanagaraj are jointly running lorry business by operating two lorries in the names of Angala Easwari and Santhi and that business is the joint business. Further case of the Complainant is that accused issued the cheque - Ex.P-1 (3.9.1992) for Rs. 24,400 towards discharge of the amount due from the joint business. In support of his claim, the Complainant relies upon the averments in Ex.P.4-legaI notice and the joint statement of accounts of Angala Easwari and Santhi enclosed with Ex.P-4. The case of the Complainant is that amount of Rs. 24,415 is payable on the joint account of Angala Easwari and Santhi. Ex.P.4 - Notice was issued to the accused alleging that the accused and his brother Kanagaraj are plying lorries in the name and style of Angala Easwari & Santhi Lorry Services; both of them used to purchase spare parts for their lorries from the Complainant on credit; that the accused and his brother jointly and severally owed a sum of Rs. 24,415 and Rs. 60 as on 20th May 1992 to the Complainant as per the ledger extract annexed with Ex.P-4.
18. Thus the Complaint proceeds on the footing:-
(i) that the lorry business M/s. Angala Easwari and Santhi is the joint business of the accused and his brother Kanagaraj;
(ii) the accused and his brother Kanagaraj jointly and severally owe a sum of Rs. 24,415 for the discharge of which the accused had issued Ex.P.1 - Cheque for Rs. 24,400;
19. The accused denies any joint business between him and his brother Kanagaraj. According to him, he is separately operating Angala Easwari lorry and his brother is separately operating the lorry Santhi. The defence is that amount payable by the accused-Angala Easwari was already discharged by paying the amount which is evidenced from the receipts-Exs.D-4 to D-6. Further case of the defence is that the Complainant is not right in tagging the amount due from Kanagaraj to that of the accused. P.W.1-Complainant was elaborately cross examined on this aspect. The Complainant has not produced any document showing running of joint lorry business by the accused and his brother Kanagaraj. In his cross examination, P.W.1 has also admitted that he has not verified any documents to satisfy himself that the brothers are running joint business. When there is no definite evidence showing joint business of accused and his brother, it is not open to the Complainant to claim the amount from the accused claiming to be the amount due from the joint business.
20. The accused had adduced documentary evidence showing that there is no joint business and joint account and that he made the purchase of auto parts separately for his lorry Angala Easwari. In fact when P.W.1 was cross examined, he has admitted (Editor: The text of the vernacular matter has not been reproduced. Please write to contact@manupatra.com if the vernacular matter is required.)
21. Contention of the accused is strengthened by the production of Exs.D-1 to D-6:
Exs.D-1 & D-2 } showing purchase of spare parts Debit Bills } by Sri Angala Easwari TN59 Z 1814.
*******
Ex.D-3 } issued separately to Sri Angala
Statement of } Easwari Lorry TN59 Z 1814.
the Accounts }
Likewise, Exs.D-4 to D-6 are the bills issued by Alim Auto Supplies -Complainant for receipt of cash from the accused towards part payment from Angala Easwari Lorry - No. TN59 Z 1814. Thus Exs.D-1 to D-6 clearly proves the defence that they are issued to the accused by the Complainant while he is separately dealing with his lorry Angala Easwari.
22. The accused is no way concerned with lorry Santhi owned and separately operated by his brother Kanagaraj. It may be that, like the accused, his brother Kanagaraj might have had dealings with Complainant -Alim Auto Supplies making purchase on credit for his lorry - Santhi and that the amount might be payable by Santhi Lorry. But in the absence of evidence showing that it is the joint business, Complainant cannot claim to tag that amount with that of the accused under the pretext of claiming as the joint business. Excepting the ipse dixit of the Complainant, no other material showing that the business was the joint business and that the brothers had joint account with the Complainant. Considering the same, the trial Court was right in finding that there is no legally enforceable debt.
23. The learned counsel for the Complainant contended that the cheque need not be issued for the personal debt and that the same could be enforced even against the individual debt payable by his brother Kanagaraj. This contention has no merits. As noted earlier, the Complaint and the claim proceeds on the definite footing that the business is the joint business and the amount is due from the joint business. Ex.P.4 - Notice was also issued on the footing that the business is joint business. When the basis of the claim of the Complainant is disproved by the defence and thereby rebutting the presumption under Section 139 of N.I.Act, the Complainant cannot disown his case and adopt the alternative plea on the strength of the defence that the cheque could be enforced even for the amount payable by the brother of the accused. The complainant cannot be allowed to adopt such inconsistent plea of his claim.
24. Only to ensure fairness in the business transactions, Sections 138 and 139 of N.I.Act are introduced. Fair play and equity is not only required from the accused but also of the Complainant. Merely because the complainant is the holder of the cheque, he does not stand in a higher position excepting to the extent of raising presumption in his favour under Sec. 139 of N.I.Act. By the evidence and materials on record that presumption stands rebutted. The finding of the trial. Court that there is 'no legally enforceable debt' is well balanced based on the evidence on record.
25. Ex.P.4 - Notice was sent on 19.12.1992. That notice was returned "intimation served; not claimed". Applying the decision in 1995 (1) L.W.(Crl.) 354, the Trial Magistrate found that Section 138 of N.I.Act does not contemplate constructive notice. The trial Court further found that no notice was served upon the accused as contemplated under Section (b) of Sec. 138 of N.I.Act which would mean that no demand has been made within 15 days from the date of dishonour of the cheque.
26. Assailing the above findings of the trial Court, the learned counsel for the Appellant/Complainant contended that mere issuance of notice is sufficient compliance. In support of his contention, reliance is placed upon K. Bhaskaran v. Sankaran Vaidhyan Balan, MANU/SC/0625/1999.
27. "Giving Notice" to the drawer in the correct address itself was held to be sufficient in the factual matrix of the case and the same cannot be applied to the case in hand. In my view the return of postal cover as "Intimated-Unclaimed" by itself would not amount to constructive notice when it is not averred by the Complainant in the complaint that the Accused is evading the service. Although, in appropriate cases, deemed service is to be accepted by the Court, such presumption of deemed service is not a matter of course in all cases. To raise the presumption of deemed notice, there should be clear averment in the complaint that the Appellant/Complainant had sent the statutory notice on demand intimating the dishonour of cheque and that the Respondents/Accused were evading the service. In the absence of such averment, no such presumption of deemed notice could be raised.
28. Thus the general burden is upon the Complainant to prove the facts constituting the sending of notice and that there is deliberate evasion of service of notice by the accused. In the instant case, absolutely no averments are made either in the Complaint or in the evidence of P.W.1. Considering the facts of the present case, in my view, it is not an appropriate case to raise such presumption of constructive notice against the accused.
29. The appreciation of evidence and the findings of the trial Court that there is no legally enforceable debt from the accused is based on the evidence on record. The view taken by the trial Court that "there is no presumption of constructive notice" also does not suffer from any serious or substantial error warranting interference.
30. For the reasons stated above, this Appeal is dismissed.
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