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2007(2) Bankmann 114
SUPREME COURT OF INDIA
(From Kerala High Court at
Ernakulam)
K.G. Balakrishnan, R.V. Raveendran & D.K. Jain, JJ.
C.C. Alavi Haji — Appellant
versus
Palapetty Muhammed
& Anr. — Respondents
Appeal (Crl.) 767 of 2007
Decided on 18-05-2007
Negotiable Instruments Act, 1881 — Section 138 (b) — Complaint alleging dishonour of cheque — Averment made in complaint that even though complainant issued lawyers notice intimating dishonour of cheque and demanded payment same was returned saying that accused was out of station - No averment in complaint that notice was sent at correct address of drawer of cheque by registered post acknowledgement due - Returned envelope was however annexed to complaint and it, formed a part of complaint which showed that notice was sent by registered post acknowledgement due to correct address and was returned with an endorsement that addressee was abroad — Held requirements of Section 138 were sufficiently complied with in fact of the case. (Paras 18, 19 and 20)
Facts of the case :
1. Reference pertaining to question of service of notice in terms of 138(b) of N.I. Act to a larger bench was made herein in the instant case on plea that while rendering decision in D.Vinod Shivappa v. Nanda Belliappa, Court failed to take into consideration, presumption in respect of an official act as provided u/s. 114 of Evidence Act. Issue in consideration was whether in absence of any averments in complaint to effect that accused had a role to play in matter of non receipt of legal notice, or that accused deliberately avoided service of notice, same could have been entertained keeping in view said decision.
2. Findings of the Court :
The court held that in view of presumption available under section 27 it is not necessary to aver in complaint under Section 138 that service of notice was evaded by accused or that accused had a role to play in return of notice unserved. Insofar as question of disclosure of necessary particulars with regard to issue of notice in terms of proviso (b) of Section 138 in order to enable Court to draw presumption or inference either under Section 27 of G.C. Act or Section 114 of Evidence Act, is concerned, there is no material difference between two provisions. Hence held that when notice is sent by registered post by correctly addressing drawer of cheque, mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 stands complied with.
Result : Appeal dismissed.
D.K. JAIN, J.—
1. Leave granted.
2. The matter has been placed before the three Judge Bench in view of a Reference made by a two-Judge Bench of this Court, pertaining to the question of service of notice in terms of Clause (b) of proviso to Section 138 of the Negotiable Instruments Act, 1881 (in short The Act). Observing that while rendering the decision in D.Vinod Shivappa v. Nanda Belliappa1 this Court has not taken into consideration the presumption in respect of an official act as provided under Section 114 of the Indian Evidence Act, 1872, the following question has been referred for consideration of the larger Bench:
“Whether in absence of any averments in the complaint to the effect that the accused had a role to lay in the matter of non-receipt of legal notice; or that the accused deliberately avoided service of notice, the same could have been entertained keeping in view the decision of this Court in Vinod Shivappas case (supra)?”
3. As it hardly needs emphasis that necessary averments in regard to the mode and the manner of compliance with the mandatory requirements of Section 138 of the Act are required to be made in the complaint, from the format of the question, the scope of controversy appears to lie in a narrow compass but bearing in mind the fact that the issue raised has wider implication with regard to the very maintainability of the complaint itself, we deem it necessary to deal with the issue in little more detail.
4. Chapter XVII of the Act originally containing Sections 138 to 142 was inserted in the Act by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 ith the object of promoting and inculcating faith in the efficacy of banking system and its operations and giving credibility to negotiable instruments in business transaction. The introduction of the said Chapter was intended to create an atmosphere of faith and reliance on banking system by discouraging people from not honouring their commitments by way of payment through cheques. Section 138 of the Act was enacted to punish those unscrupulous persons who purported to discharge their liability by issuing cheques without really intending to do so. To make the provisions contained in the said Chapter more effective, some more Sections were inserted in the Chapter and some amendments in the existing provisions were made. Though, in this reference, we are not directly concerned with these amendments but they do indicate the anxiety of the Legislature to make the provisions more result oriented. Therefore, while construing the provision, the object of the legislation has to be borne in mind.
5. As noted above, the controversy arises in the context of service of notice in terms of Section 138 of the Act. The conditions pertaining to the notice to be given to the drawer, have been formulated and incorporated in Clauses (b) and (c) of the proviso to Section 138 of the Act, which read as follows:
“Provided that nothing contained in this section shall apply unless—
(a) ..... ..... .....
(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, 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 the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
6. As noted hereinbefore, Section 138 of the Act was enacted to punish unscrupulous drawers of cheques who, though purport to discharge their liability by issuing cheque, have no intention of really doing so. Apart from civil liability, criminal liability is sought to be imposed by the said provision on such unscrupulous drawers of cheques. However, with a view to avert unnecessary prosecution of an honest drawer
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