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V. Satyanarayana v. A.P Travel And Tourism Development Corporation Ltd. And Another.
Structured Summary of the Opinion (T. Ranga Rao, J.)
Factual and Procedural Background
The petitioner is the accused in Criminal Complaint matters C.C. Nos. 393 to 420 of 1994 on the file of the XIth Metropolitan Magistrate, Secunderabad. The respondent in all petitions is A.P. Travel and Tourism Development Corporation Limited (a State-owned corporation). The petitioner, proprietor of Sri Venkateswara Travel Agency, was appointed as an authorised agent by the complainant for operations from Amalapuram on 30 August 1993. The agency arrangement required a security deposit and an occupancy guarantee; the petitioner subsequently issued several account-payee cheques to the complainant in lieu of advance payments. When those cheques were presented, the banker returned them with endorsements such as "not arranged for" and "balance not sufficient". The complainant served registered notices on the petitioner at the address shown in the petitions (Sri Venkateswara Travel Agents, Main Road, Amalapuram). The postal authorities returned the notices with endorsements indicating that the addressee was residing at Gangalakurru Agraharam and, on re-direction, that neither the addressee nor the care of were residing there, and the notices were returned to sender. The complaints were filed after expiry of the statutory notice period. The accused moved Criminal Miscellaneous Petitions to drop the proceedings before the magistrate on the ground that the legal notice was not served; the magistrate dismissed those petitions after referring to postal endorsements and holding that the complainant had bona fide sent notices to the known address and that the matter of service was one of evidence. The petitioner then filed petitions under section 482 CrPC in this High Court seeking quashing of the proceedings.
Legal Issues Presented
- Whether a complaint under section 138 of the Negotiable Instruments Act can be quashed or dismissed under section 482 CrPC merely because the statutory notice was not served on the accused, without enquiring into the factual circumstances that led to non-service (including whether the accused deliberately evaded service or obtained false postal endorsements).
- Whether the notices in this case were sent to the correct address of the petitioner-accused and whether the endorsements by postal authorities indicate deliberate evasion or management of the postal process by the accused — i.e., whether non-service is a question of fact to be determined at trial.
- Whether the petitioner can invoke section 482 CrPC to quash criminal proceedings after having allowed the magistrate's order dismissing the earlier petitions to become final (as contended by the respondent).
Arguments of the Parties
Petitioner's Arguments
- The complaint is not maintainable because the statutory legal notice under section 138 NI Act was not served on the petitioner-accused.
- Relied upon precedent L. Mani v. Kandan Finance [1996] 86 Comp Cas 205 (Mad) and Kharar Rice & General Mills v. Jiwa Ram Prakash [1995] ISJ (Banking) 562 to support the contention that non-service of notice requires dismissal/quashing.
Respondent's Arguments
- The notices were correctly addressed to the petitioner's known address (Sri Venkateswara Travel Agents, Main Road, Amalapuram) and were returned with postal endorsements indicating diversion to Gangalakurru Agraharam and then non-availability there; these endorsements suggest the petitioner managed return of the registered notice and can be proved at trial.
- If the petitioner intentionally evaded receipt of notice, he cannot take advantage of his own tactics; the law should not help the wrongdoer.
- Because the petitioner allowed the magistrate's order on the issue to become final without revision, he should not be permitted to file a fresh petition under section 482 CrPC to quash the proceedings.
- Relied on authorities (listed in the opinion) supporting the propositions that deliberate evasion amounts to constructive service and that return of notice is a question of fact for trial.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| L. Mani v. Kandan Finance, [1996] 86 Comp Cas 205 (Mad) | Held complaint not maintainable where notice returned as "addressee not found" and there was no case that the accused deliberately evaded receipt. | The court distinguished this decision on facts: in the present case the respondent alleges deliberate evasion/management of postal endorsements by the accused, so L. Mani was not helpful to the petitioner. |
| Kharar Rice and General Mills v. Jiwa Ram Prakash, [1995] ISJ (Banking) 562 | Where there was no allegation of deliberate evasion and notice was returned "undelivered", complaint was held not maintainable in that case. | The court distinguished this authority because, unlike that case, here the respondent alleges the accused intentionally avoided receipt and managed return endorsements. |
| S. Prasanna v. R. Vijayalakshmi, [1992] Crl. LJ 1233 : [1993] 76 Comp Cas 522 (Mad) | Deliberate evasion of receipt of registered notice amounts to constructive service of notice; law will not allow deliberate avoidance to frustrate statutory notice requirement. | The court relied on this principle to support the view that deliberate evasion constitutes constructive service and that non-service alone is not an automatic bar to proceedings. |
| A.B. Steels v. Coromandel Steel Products, [1992] 74 Comp Cas 762 : [1992] 1 Crimes 60 | Reiterated the principle that deliberate evasion leading to return of notice cannot be used to defeat the statutory notice requirement. | Referenced as supporting authority for the proposition that deliberate avoidance amounts to constructive service. |
| Syed Hamid Bafaky, Proprietor… v. Moideen…, [1996] 85 Comp Cas 267 : [1996] Crl. LJ 1013 (Ker) | The effect of return of service of notice is a question of fact; such factual questions should ordinarily be decided at trial and not by quashing proceedings under section 482. | The court relied on this authority to emphasise that factual enquiries about service must be left to trial and that section 482 should not be used to short-circuit such factual determinations. |
| K. Madhu v. Omega Pipes Ltd., [1996] 85 Comp Cas 263 : [1994] 1 Alt Crl. 603 (Ker) | Interpreted "giving notice" in section 138 NI Act: sending notice to the correct address reasonably ahead of the expiry period suffices; law will not help an evader who prevents receipt. | The court adopted this reasoning to hold that dispatch to the correct address can amount to giving notice, and the law should not help those who evade receipt. |
| State of Madhya Pradesh v. Hiralal, [1996] JT 7 SC 669 | If a party manages to have notices returned with postal remarks such as "not available in the house", "house locked" and "shop closed", the notices may be deemed to have been served. | Used to reinforce the proposition that managed or feigned non-service may be treated as constructive service; supports leaving the factual enquiry to the trial court. |
Court's Reasoning and Analysis
The court examined the material endorsements on the returned registered notices and the sequence of events: notices addressed to the petitioner's stated address in Amalapuram were returned with endorsements that the addressee was at present at Gangalakurru Agraharam and, upon redirection, that neither the addressee nor the care of were residing there. Given that the petitioner's address is admittedly Amalapuram and was the address used in the petitions, the court concluded that it could not be said the complainant sent notices to a wrong address.
The court emphasised that whether the petitioner deliberately evaded receipt or managed postal authorities to obtain false endorsements is essentially a question of fact. The court reviewed and applied existing authorities establishing two key principles: (a) deliberate evasion of receipt of registered notice amounts to constructive service and the law will not assist a wrongdoer; and (b) the effect of return of service is a factual matter that should ordinarily be adjudicated at trial rather than by exercising the extraordinary power under section 482 CrPC to quash proceedings.
The court distinguished authorities relied upon by the petitioner (notably L. Mani and Kharar Rice) on the ground that in those cases there was no allegation of deliberate evasion; whereas in the present matter the respondent specifically contended that the petitioner managed postal endorsements to avoid service. On that basis, the court held that the complaints could not be quashed simply because the notice was returned; an enquiry into the circumstances leading to non-service is required.
The court therefore concluded that the petitioner was not entitled to quash the proceedings under section 482 CrPC and directed that the trial court decide the matters on evidence without being influenced by the observations in the High Court's order.
Holding and Implications
Holding: The court's final decision is that the criminal petitions are dismissed and the petitioner is not entitled to quash the proceedings in C.C. Nos. 393 to 420 of 1994 on the file of the XI Metropolitan Magistrate, Secunderabad. The core ruling is:
DISMISSED
Implications:
- Direct effect on parties: The complaints under section 138 NI Act will proceed to trial; the trial court is directed to dispose of the matters by considering the evidence and without being influenced by the High Court's observations.
- Factual findings to be made at trial: Whether the notices were sent to the correct address and whether the petitioner deliberately evaded service or managed postal endorsements are questions of fact to be determined during trial; constructive service may be found if deliberate evasion is proved.
- On precedent and law: The court applied and relied upon existing authorities (as summarized above) to hold that non-service alone does not automatically warrant quashing; the opinion does not purport to create a new precedent but applies established principles that "law shall not help the wrongdoer" and that return of notice is a factual matter for trial.
All content in this summary is taken exclusively from the provided opinion and does not add or infer facts beyond that text.
T. Ranga Rao, J.:— The petitioner in the above criminal petitions is the accused in C.C Nos. 393 to 420. of 1994, on the file of the Xlth Metropolitan Magistrate, Secunderabad. As the respondent in all the petitions is also the same and as the point involved in all these petitions is also the same, all the petitions are disposed of by a common order.
2. The facts giving rise to the filing of these petitions are briefly as follows:
The first respondent, A.P Travel and Tourism Development Corporation Limited, Secunderabad, is owned by the Government of Andhra Pradesh and the main objects of the corporation are to run, establish and manage transport units and transport centres and operate services and tours, etc. The petitioner-accused, the proprietor of Sri Venkateswara Travel Agency, approached the complainant to appoint him as the authorised agent of the complainant in Amalapuram to operate the services and tours from Amalapuram. Accordingly, he was appointed as the authorised agent for operation of buses from Amalapuram to Hyderabad and back on August 30, 1993. The agent has to deposit Rs. 30,000 as security deposit. It is further alleged that the accused had to deposit a minimum occupancy guarantee of 75 per cent, of Rs. 150 per seat one way and Rs. 300 two ways by way of demand draft in advance, before the vehicle moves from the garage and he deposited the same for some time. Subsequently, he requested to permit him to pay the said amount through cheques and the complainant has accepted the request of the petitioner/accused. Then the accused-petitioner started issuing account payee cheques drawn on the State Bank of India, Ambajipet branch, in favour, of the complainant. Thus, the accused gave several cheques and when they were presented through the bankers, the State Bank of Hyderabad, Begumpet branch, pertaining to the above cases, they were returned with a reason “not arranged for” and when the complainant contacted the petitioner-accused, he requested the complainant to resubmit the cheques and again the cheques were returned with an endorsement “balance not sufficient”. Then the complainant got issued notices to the petitioner-accused, which were returned with an endorsement “at present the addressee is residing at Gangalakurru Agraharam as per the detailed enquiry conducted” and re-directed to the sender. The accused failed to pay the amount and hence the complaints were filed within one month after expiry of the 15 days from the date of notice.
3. The said cases were taken on the file as C.C Nos. 393 to 420 of 1994. The accused filed Crl. M.P Nos. 1301 to 1329 of 1995 to drop the proceedings against him mainly contending that the legal notice was not served on the accused, and, therefore, the complaint is not maintainable.
4. The learned magistrate, after considering the endorsement on the returned notices, observed that the complainant has bona fide sent the notices to the known address of the accused and they were returned because the petitioner-accused was not available at the address. He further observed that it is always open to the petitioner-accused to establish that the complaint purposefully did not send the notice to his correct address and had personal knowledge of his address and dismissed the petitions.
5. Now, the petitioner filed these petitions under section 482 of the Criminal Procedure Code, 1973, to quash the proceedings.
6. Learned counsel for the petitioner submitted that when admittedly the notice was not served on the petitioner-accused, the complaint is not maintainable and he relied on a decision in L. Mani v. Kandan Finance, [1996] 86 Comp Cas 205 (Mad). He further relied on a decision of the Punjab and Haryana High Court in Kharar Rice and General Mills v. Jiwa Ram Prakash, [1995] ISJ (Banking) 562.
7. But learned counsel for the respondent submitted that the address of the petitioner is Venkateswara Travel Agents, Main Road, Amalapuram, East Godavari District and the notice was sent to that address only, it was returned with an endorsement that at present the addressee is residing at Gangulakurru Agraharam and it was re-directed to the said address and there the postal authorities endorsed that neither the addressee nor the care of are residing in agraharam and this endorsement clearly shows that the petitioner-accused managed to return the registered notice and the said fact can be proved during the trial of the case and if the petitioner has intentionally evaded the receipt of notice, he cannot take advantage of his tactics by contending that the complaint is not maintainable under section 138 of the Negotiable Instruments Act, 1881 (for short “the N.I Act”), as no notice was served on him and the law shall not help the wrongdoer and the learned magistrate has rightly referred to the endorsements of the postal authorities and dismissed the said petition observing that it is a matter of evidence and can be decided during the trial of the case. He further submitted that no revision is filed against the said order of the magistrate and the said order became final and now the petitioner cannot file the petition under section 482 of the Criminal Procedure Code, 1973, to quash the proceedings in a criminal case having allowed the said order of the learned magistrate to become final and requested for dismissal of the petitions. He relied on:
S. Prasanna v. R. Vijayalakshmi, [1992] Crl. LJ 1233 : [1993] 76 Comp Cas 522 (Mad).
A.B Steels v. Coromandel Steel Products, [1992] 74 Comp Cas 762 : [1992] 1 Crimes 60 (Syed Hamid Bafaky, Proprietor… v. Moideen…., [1996] 85 Comp Cas 267 (Ker) : [1996] Crl. LJ 1013.
K. Madhu v. Omega Pipes Ltd., [1996] 85 Comp Cas 263 (Ker) : [1994] 1 Alt Crl. 603.
8. It is true that even in the petition filed before this court under section 482 of the Criminal Procedure Code, 1973, as well as in the complaints filed against the petitioner in C.C Nos. 393 to 420 of 1994, the address of the petitioner is mentioned as Sri Venkateswara Travel Agents, Main Road, Amalapuram, East Godavari District. The complainant got issued the notice to the same address after the cheques were dishonoured and the complainant filed nearly 28 cases and in all the cases, the notice was addressed to the same address as mentioned in these petitions. But the postal authorities endorsed that the addressee is at present residing at Gangalakurru Agraharam and it was re-directed to that address and there the postal authorities endorsed that neither the addressee nor the care of are residing in the agraharam, and, therefore, returned it to the sender. When admittedly, the petitioner's address is at Amalapuram and the same address is given in these petitions, in the aforesaid circumstances and in view of the endorsement of the postal authorities, it cannot be said that the complainant sent the notices to the wrong address of the petitioner. It appears that there is some force in the contention of the respondent. Even otherwise, it is a matter of evidence whether the petitioner has purposely addressed the notices to a wrong address of the petitioner or whether the petitioner/accused wilfully avoided to receive the notices and managed with the postal authorities to get such an endorsement and during trial of the case if it is established that the petitioner-accused managed to get a false endorsement stating that at present he is residing at Gangalakurru then the law shall not help the wrongdoer to take advantage of his tactics and in the said circumstances, it would clearly amount to constructive service of notice about the dishonour of the cheques and the complainant demanded to pay the said amount.
9. Thangamani J. observed in L. Mani v. Kandan Finance, [1996] 86 Comp Cas 205 (Mad) that the notice was returned with an endorsement that the addressee was not found and it is not as if the notice is returned as “refused to receive” and also further observed that it is not the case of the complainant that the petitioner has deliberately refused to receive the ‘notice, and therefore, in the aforesaid circumstances, held that the complaint is not maintainable. But, in the present case, it is the specific case of learned counsel for the respondent that the petitioner-accused managed with the postal authorities to get the endorsement that he is residing at Gangalakurru Agraharam and when the letter was re-directed to the said address, there the postal authorities endorsed that such an addressee is not found and returned it to the sender. Thus, the facts leading to the above decision in L. Mani v. Kandan Finance, [1996] 86 Comp Cas 205 (Mad) are different from the facts of the case on hand and not helpful to the petitioner.
10. The other decision relied on by learned counsel for the petitioner is Kharar Rice and General Mills v. Jiwa Ram Prakash, [1995] ISJ (Banking) 562, wherein the complainant filed a complaint under section 138 of the Negotiable Instruments Act, 1881, against the drawer for the dishonour of the cheques and the said complaint was dismissed on July 5, 1993, for default and the same was restored to file on July 20, 1993. The accused filed a petition to quash the proceedings under section 482 of the Criminal Procedure Code, 1973, and also took the contention that the notice was not served on him, and, therefore, the complaint is not maintainable, besides questioning the correctness of the order of the magistrate in restoring the complaint dismissed for default. It appears that the complainant has not contended that the petitioner-accused intentionally evaded to receive the notice and managed to return the same with an endorsement “undelivered” and in the absence of any such allegation that the notice was not served on the petitioner-accused, it was held that the complaint is not maintainable. But the facts in the present case are distinguishable as it is the contention of the complainant that the accused after knowing the demanding of the payment by the complainant avoided to receive the notice and managed to return the same. Therefore, the said decision is of no assistance to the petitioner-accused.
11. In S. Prasanna v. R. Vijayalakshmi, [1992] Crl. LJ 1233 : [1993] 76 Comp Cas 522 (Mad) in similar circumstances when the notice was returned as “addressee not found”, Mr. Pratap Singh J. observed as follows (page 525):
“In the complaint, it is stated that the accused deliberately evaded receipt of registered notice. This would amount to his knowledge that such a notice was sent by the complainant and deliberate refusal of the same. That would clearly amount to constructive service of notice. The very purpose of the Act cannot be thwarted by simply refusing the notice. I am clear that deliberate evasion of receipt of registered notice would amount to constructive service of notice and so I do not accept this contention.”
12. He also reiterated the same principle in another decision in A.B Steels v. Coromandel Steel Products, [1992] 74 Comp Cas 762 : [1992] 1 Crimes 60 (Mad).
13. The Kerala High Court in Syed Hamid Bafaky, Proprietor… v. Moideen…., [1996] 85 Comp Cas 267 : [1996] Crl. LJ 1013, when a similar question arose for consideration, N. Dhinakar J. observed that the effect of return of service of notice is a question of fact and can be decided during the trial of the case and an opportunity should be given to the complainant to prove the same and the court in exercise of powers under section 482 will not interfere with the finding of fact and declined to quash the proceedings.
14. In K. Madhu v. Omega Pipes Ltd., [1996] 85 Comp Cas 263 (Ker) : [1994] 1 Alt Crl. 603, K.T Thomas J. considered the scope of section 138, clauses (b) and (c), of the Negotiable Instruments Act, 1881, and observed as follows (page 266):
“…. in clause (c) of the proviso the drawer of the cheque is given fifteen days from the date ‘of receipt of the said notice’ for making payment. This affords clear indication that ‘giving notice’ in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment. The payee has to perform the former process by sending the notice to the drawer at his correct address. If receipt or even tender of notice is indispensable for giving the notice in the context envisaged in clause (b), an evader would successfully keep the postal article at bay at least till the period of fifteen days expires. Law shall not help the wrongdoer to take advantage of his tactics. Hence, the realistic interpretation for the expression ‘giving notice’ in the present context is that, if the payee has despatched notice in the correct address of the drawer reasonably ahead of the expiry of fifteen days, it can be regarded that he made the demand by giving notice within the statutory period. Any other interpretation is likely to frustrate the purpose for providing such a notice.”
15. If the contention of learned counsel for the petitioner that simply because the notice was not served, the complaint is liable to be dismissed without enquiring into the circumstances under which the notice was returned, is accepted, it would facilitate evil-minded persons to manage the postal authorities to return the notice and then to claim that the complaint under section 138 is not maintainable and in such circumstances, the very object of incorporating sections 138 to 142 would be defeated. The Kerala High Court in K. Madhu v. Omega Pipes Ltd., [1996] 85 Comp Cas 263 : [1994] 1 Alt Crl. 603 (Ker) also took the same view that law shall not help the wrongdoer to take advantage of his tactics. The Madras High Court in S. Prasanna v. R. Vijayalahshmi, [1992] Crl. LJ 1233 : [1993] 76 Comp Cas 522 also observed that if the accused deliberately avoids to receive the notice, it would amount to constructive service of notice. The apex court in the State of Madhya Pradesh v. Hiralal, [1996] JT 7 SC 669 also observed that if the respondent obviously managed to have the notice returned with the postal remarks “not available in the house”, “house locked” and “shop closed” then it must be deemed that the notices have been served on the respondents.
16. Therefore, the crucial question is whether the notices were sent to the correct address of the petitioner-accused and whether the petitioner-accused managed the postal authorities to return the notices with some false endorsements are questions of fact which can be decided during the trial of the case only. A complaint under section 138 of the Negotiable Instruments Act cannot be quashed or dismissed merely because the notice was not served on the accused or drawer without enquiring into the circumstances leading to the non-service of notice. In the light of the foregoing discussion, I hold that the petitioner is not entitled to the relief of quashing the proceedings in C.C Nos. 393 to 420 of 1994, on the file of the XI Metropolitan Magistrate, Secunderabad.
17. However, the trial court is directed to dispose of the matters taking into consideration the evidence adduced before it and without being influenced by any observations made in this order.
18. All the criminal petitions are dismissed accordingly.
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