2006(1) Bankmann 544
SUPREME COURT OF INDIA
K.T. Thomas & M.B. Shah, JJ.
K. Bhaskaran — Appellant
versus
Sankaran Vaidhyan Balan
& Anr. — Respondents
Crl. Appeal No. 1015 of 1999
Decided on 29-9-1999

IMPORTANT POINTS
(1)In a complaint for offence of dishonour of cheque complainant can choose any one of those Courts having jurisdiction over any one of local areas within territorial limits of which any one of the five acts constituting offence was done.
(2)Notice under Section 138(b) of Negotiable Instruments Act refused to be accepted by addressee can be presumed to be served on him.

Headnote:(i) Negotiable Instruments Act, 1881—Sections 118 and 139—Dishonour of cheque—Complainant was brother of accused-appellant—Defence plea was that complainant had snatched away some signed blank cheque leaves and utilised one such cheque—Conviction—Appeal—As signature in cheque was admitted, presumption under Section 118 of the Act could legally be inferred that cheque was drawn for consideration—Burden was on accused to rebut said presumption—No reason to differ with courts below.

       Held: As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received if for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. The Trial Court was not persuaded to rely on the interested testimony of DW 1 to rebut the presumption. The said finding was upheld by the High Court. It is not now open to the accused to contend differently on that aspect. (Para 9)

       (ii) Negotiable Instruments Act, 1881—Section 138—Criminal Procedure Code, 1973—Section 177 and 178(d)—Dishonour of cheque—Prosecution—Territorial jurisdiction—Locality where bank which dishonoured the cheque was situated could not be regarded as sole criteria to determine the place of offence—Complainant could choose any one of those courts having jurisdiction over any one of local areas within territorial limits of which one of the five pre-conditions of offence was done.

       Held: The locality where the Bank (which dishonoured the cheque) is situated cannot be regarded as the sole criteria to determine the place of offence. It must be remembered that offence under Section 138 would not be completed with the dishonour of the cheque. It attains completion only with the failure of the drawer of the cheque to pay the cheque amount within the expiry of 15 days mentioned in Clause (c) of the proviso to Section 138 of the Act. It is normally difficult to fix up a particular locality as the place of failure to pay the amount covered by the cheque. A place, for that purpose, would depend upon a variety of factors. It can either be at the place where the drawer resides or at the place where the payee resides or at the place where either of them carries on business. Hence, the difficulty to fix up any particular locality as the place of occurrence for the offence under Section 138 of the Act. (Para 11)

       The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. Following are the acts which are components of the said offence: (1) Drawing of the cheque, (2) Presentation of the cheque to the Bank, (3) Returning the cheque unpaid by the drawee Bank, (4) Giving notice in writing to the drawer of the cheque amount, (5) Failure of the drawer to make payment within 15 days of the receipt of the notice.

       It is not necessary that all the above five acts should have been perpetrated, at the same locality. It is possible that each of those five acts could be done at 5 different localities. But concatenation of all the above five is a sine qua non for the compensation of the offence under Section 138 of the Code. In this context a reference to Section 178(d) of the Code is useful. It is extracted below:

       “Where the offence consists of several acts done in different local areas, it may be enquired into or tried by a Court having jurisdiction over any of such local areas.”

       Thus it is clear, if the five different acts were done in five different localities any one of the Courts exercising jurisdiction in one of the five local areas can become the place of trial for the offences under Section 138 of the Act. In other words, the complainant can choose any one of those Courts having jurisdiction over anyone of the local areas within the territorial limits of which anyone of those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under Section 138 of the Act. (Paras 14 to 16)

       (iii) Negotiable Instruments Act, 1881—Section 138—Dishonouring cheque—Prosecution—Notice sent by complainant was returned as “unclaimed”—Notice refused to be accepted by accused could be presumed to have been served on him—When notice is returned by sendee unclaimed, such data could be the commencing date in reckoning period of 15 days contemplated under Section 138(d) of the Act—Accused however could establish that he had no knowledge that notice was brought to his address.

       Held: It is well settled that a notice refused to be accepted by the addressee can be presumed to have been served on him, [vide Harcharan Singh v. Smt. Shivrani and Ors., 1981(2) SCC 535, and Jagdish Singh v. Natthu Singh, 1992(1) SCC 647].

       Hence the notice is returned as unclaimed and not as refused. Will there be any significant difference between the two so far as the presumption of service is concerned? In this connection a reference to Section 27 of the General Clauses Act will be useful. (Paras 21 & 22)

       Thus, when a notice is returned by the sendee as unclaimed such date would be the commencing date in reckoning the period of 15 days contemplated in Clause (d) to the proviso of Section 138 of the Act. Of course such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address. In the present case the accused did not even attempt to discharge the burden to rebut the aforesaid presumption.

       The High Court is, therefore, right in holding the accused guilty of the offences under Section 138 of the Act. Still there is one more aspect, though neither side has argued about it before us, which requires elucidation. We will deal with that aspect now. (Paras 24 & 25)

       (iv) Negotiable Instruments Act, 1881—Section 138—Criminal Procedure Code, 1973—Sections 29(2), 386 & 357(3)—Dishonour of cheque—Conviction—Sentence—Trial Court imposed sentence of six months imprisonment and fine of Rs. one lakh—High Court affirmed sentence—Magistrate could not have imposed a fine exceeding

       Rs. 5,000/- besides imprisonment—High Court while convicting accused also could not impose a sentence of fine exceeding the said limit—Court however could make liberal use of Section 357(3) Cr.P.C. in awarding compensation.

       Held: The trial in this case was held before a Judicial Magistrate of First Class who could not have imposed a fine exceeding Rs. 5,000/- besides imprisonment. The High Court while convicting the accused in the same case could not impose a sentence of fine exceeding the said limit.

       It is true, if a judicial Magistrate of First Class was to order compensation to be paid to the complainant from out of the fine realised the complainant will be the loser when the cheque amount exceeded the said limit. In such a case a complainant would get only the maximum amount of rupees five thousand.

       However, the Magistrate in such cases can alleviate the grievance of the complainant by making resort to Section 357(3) of the Code. It is well to remember that this Court has emphasised the need for making liberal use of that provision in the case of Hari Krishan and State of Haryana v. Sukhbir Singh & Ors., AIR 1988 SC 2127. No limit is mentioned in the sub-section and, therefore, a Magistrate can award any sum as compensation. Of course while fixing the quantum of such compensation the Magistrate has to consider what would be the reasonable amount of compensation payable to the complainant. Thus, even if the trial was before a Court of Magistrate of First Class in respect of a cheque which covers an amount exceeding Rs. 5,000/- the Court has power to award compensation to be paid to the complainant.

       The question of sentence and award of compensation must be considered by the Trial Court. We deem it feasible that the Magistrate shall hear the prosecution and the accused on those aspects. Of course, if the complainant and accused settle their disputes regarding this cheque, in the meanwhile, that fact can certainly be taken into consideration in determining the extent or quantum of sentence.

       (Paras 28 to 31)

       Result: Appeal disposed of accordingly.