AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 847
X X X X Extracts X X X X
X X X X Extracts X X X X
....etitioner guilty for the offence punishable under Section 138 of the Negotiable Instruments Act and further sentenced the petitioner to undergo rigorous imprisonment for one year coupled with compensation of entire cheque amount of Rs. 80,000/- towards compensation of the cheque amount and litigation cost in terms of Section 357(3) of the Code of Criminal Procedure. Submission on behalf of the petitioner 5. The learned counsel for the petitioner submits that the impugned judgement of conviction of the petitioner as well as the sentence for offence under Section 138 of Negotiable Instruments Act is ex-facie perverse and cannot be sustained in the eyes of law. She has submitted that there is no finding recorded by the learned courts below regarding service of legal notice in connection with bouncing of the cheque which is a condition precedent for filing of case under Section 138 of Negotiable Instruments Act. She has further stated that even the complainant remained totally silent on the point of service of notice to the petitioner. 6. The learned counsel for the petitioner further submitted that the legal notice dated 24.07.2007 was said to be sent under certificate of posting a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also within the stipulated period as per the provisions of Section 138 of Negotiable Instruments Act, 1881. 10. The learned counsel for the opposite party no. 2 has further submitted that both the learned courts below have convicted the petitioner. The scope of interference in revisional jurisdiction is very limited. He submitted that there is no scope for re-appreciation of evidences on record and coming to a different finding in absence of any material irregularity or perversity in the impugned judgements. 11. The learned counsel appearing on behalf of the opposite party- State has supported the submissions made on behalf of the opposite party no.2. Findings of this Court 12. As per the prosecution story, the accused-petitioner has received different amount on different dates till December, 2004 towards friendly loan from the complainant with promise to return the entire loan amount. The relevant dates are as under: - a. 03.03.2007 and 30.05.2007 - the dates of the two cheques- Rs. 50,000/- and Rs. 30,000/-. b. 11.06.2007 -the complainant produced the two cheques for encashment, but both the cheques bounced owing to "insufficiency of funds". c. 15.06.07- the complain....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on account of its being non- MICR, could call for prosecution under Section 138 of Negotiable Instruments Act, 1881? If the answer of the aforesaid question is in negative, further question would be- Whether the cheques bounced upon their first presentation on 11.06.2007 on account of insufficiency of funds can still be taken as a trigger point for constituting offence under Section 138 of Negotiable Instruments Act, 1881? b) Whether the dispatch of demand notice under certificate of posting can be said to a valid mode of service under the provisions of Section 138 of Negotiable Instruments Act, 1881? If the answer to the aforesaid question is in the affirmative, further question would be, When can the demand notice dispatched under certificate of posting be said to have been served upon the addressee in absence of any proof of its service, either documentary or circumstantial? And also Whether on the date of filing of the complaint case under section 138 of the Negotiable Instruments Act, 1881, the cause of action had crystalized or the complaint itself was pre-mature? Point no. (a) 14. This Court finds that it was the specific case of the prosecution that the cheques ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e were not acceptable by the bank itself on account of technical reasons. As per proviso (a) of section 138 of the Negotiable Instrument Act, 1881, the cheque has to be presented within six months from the date it is drawn or within the period of its validity, whichever is earlier. This Court is of the considered view that bouncing of cheques upon second presentation on account of them being not acceptable by the bank (on account of being non-MICR cheque) was not on account of any act or omission of the petitioner. Accordingly, the said bouncing of cheques on second presentation cannot be a ground for prosecution under Section 138 of the Negotiable Instruments Act, 1881 as one of the conditions precedent for prosecution i.e the cheque itself should be valid on the date of its presentation, is not satisfied when the cheques are returned as not acceptable to the bank on account of being non-MICR cheques. 18. In order to answer the connected question to question no. (a) as mentioned above, admittedly, the cheques were accepted by the bank upon their first presentation on 11.06.2007 when they bounced due to insufficient funds. In the present case the legal notice was sent through Ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e notice. 21. Accordingly, this court is of the considered view that dispatch of demand notice under Section 138 of Negotiable Instruments Act, 1881 under "certificate of posting" is permissible in law. 22. So far as service of notice dispatched under certificate of posting is concerned, the same cannot have the same status as that of notice sent under registered cover or speed post which are specifically covered under the provisions of section 27 of the General Clauses Act. This aspect of the matter has also been considered by the Hon'ble Supreme Court in the aforesaid judgement in the case of "Mohd. Asif Naseer vs. West Watch Company through its Proprietor" (supra). 23. The Hon'ble Supreme Court at para-17 and 18 considered the earlier judicial pronouncements on the point and held as under: - "17. On the contrary, in the case of Sumitra Devi vs. Sampuran Singh (2011) 3 SCC 556, which has been relied upon by learned Senior Counsel for the Appellant, this Court had held that "it will all depend on the facts of each case whether the presumption of service of notice sent under postal certificate should be drawn. It is true that as observed by the Privy Council in its abo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 30(1) of the Rent Control Act in the Court and other attending circumstances, as have been considered by the Prescribed Authority, would all clearly go to show that there was sufficient proof of service of notice, which finding of fact has been affirmed by the Appellate Authority, and we see no reason for the Writ Court to have unsettled such concurrent findings of fact." 24. The aforesaid judgement of the Hon'ble supreme court is, interalia, on the point as to whether service of notice under certificate of posting is permissible when the statute is silent on the point of mode of service of notice and also on the point that mere receipt of notice having been sent under certificate of posting, in itself, may not be sufficient proof of service, but if the same is coupled with other facts and circumstances which go to show that the party had notice, the same could be held to be sufficient service on the party. The said judgement also considered the earlier judicial pronouncement that the presumption regarding service of notice would apply with greater force to letters which are sent by registered post, yet, when facts so justify, such presumption is expected to be drawn even in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inst the accused beyond all reasonable doubt and hence I hold the accused guilty for the offence punishable under Section 138 of the N.I. Act. The bail bond of the accused is being cancelled and he is being taken into custody." (emphasis supplied) 26. It is now well settled by virtue of the aforesaid judgement of the Hon'ble Supreme Court that mere receipt of notice having been sent under certificate of posting, in itself, may not be sufficient proof of service, but if the same is coupled with other facts and circumstances which go to show that the party had notice, the same could be held to be sufficient service on the party. This court finds that the learned trial court has not at all given any finding regarding service of demand notice upon the petitioner said to have been dispatched under certificate of posting and the petitioner has been convicted by holding that the case was filed within a period of 30 days after arising of cause of action which is after 15 days from the dispatch/service of notice. Before the appellate court, a plea was raised by the defence that the demand notice was incorrectly addressed and there was non-service of demand notice but the said plea was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g been sent under certificate of posting, there is no other material or other facts and circumstances to show that the petitioner was served with the demand notice much less any particular date of service of demand notice. 30. This court is of the considered view that both the learned courts below have failed to consider that there was no evidence regarding service of demand notice to the petitioner sent under certificate of posting. This court is of the considered view that no presumption in connection with such demand notice under Section 138 of Negotiable Instruments Act, 1881 sent through certificate of posting can be drawn unless it is coupled with other facts and circumstances which go to show that the party had notice. This Court is of the considered view that presumption of deemed service of notice only by virtue of the same having been sent through registered post/speed post can be drawn by virtue of the provisions of Section 27 of the General Clauses Act which specifically refers to registered post but has no reference to letters sent under certificate of posting. Accordingly, in absence of any finding regarding any other facts and circumstances proving that the petition....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iso. For completion of an offence under Section 138 of the NI Act not only the satisfaction of the ingredients of offence set out in the main part of the provision is necessary but it is also imperative that all the three eventualities mentioned in clauses (a), (b) and (c) of the proviso are satisfied. Mere issuance of a cheque and dishonour thereof would not constitute an offence by itself under Section 138. 31. Section 138 of the NI Act has been analysed by this Court in Kusum Ingots & Alloys Ltd. wherein this Court said that the following ingredients are required to be satisfied ......... 36. A complaint filed before the expiry of 15 days from the date on which notice has been served on drawer/accused cannot be said to disclose the cause of action in terms of clause (c) of the proviso to Section 138 and upon such complaint which does not disclose the cause of action the court is not competent to take cognizance. A conjoint reading of Section 138, which defines as to when and under what circumstances an offence can be said to have been committed, with Section 142(b) of the NI Act, that reiterates the position of the point of time when the cause of action has arisen, leaves no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ervice report of legal notice in the present case which was sent under certificate of posting and not by registered post. Even if it is assumed for the sake of arguments that legal notice sent under certificate of posting would draw a presumption of deemed service, though under section 27 of the General Clauses Act, 1887 the question of presumption of service of letter arises only when it is sent under registered post, then also the complaint case filed by the complainant in the instant case is pre-mature when considered in the light of the time-lines prescribed under Section 138 of Negotiable Instruments Act, 1881. Even if the best case of the Complainant is taken into consideration, then the date of dispatch of legal notice regarding bouncing of the cheques by the complainant is 24.07.2007 (under certificate of posting), the date of deemed service of legal notice upon the petitioner would be on or about 24.08.2007 (30 days from dispatch of legal notice) and 15 days from the date of service of notice would expire only on or about 08.09.2007 and present complaint case has been filed on 06.09.2007. 36. This Court finds that in the light of the judgment passed by the Hon'ble Sup....