Citation Codes

Equivalent Citations

citation codes

Case Number

Criminal Appeal No. 21 of 2003

Judges

N.A Britto, J.

Acts

Section 27 of the General Clauses Act in relation to Order 5, proviso to sub-rule (2) of R. 19-A, C.P.C
Section 27 of the General Clauses Act or Section 11 of the Indian Evidence Act.
SECTION 138 NEGOTIABLE INSTRUMENTS ACT 1881
Section 313 of the Code of Criminal Procedure, 1973.
Section 114(f) of the Indian Evidence Act, 1872
SECTION 27 GENERAL CLAUSES ACT 1897
Section 27 of the General Clause Act, 1897
Section 116 of the Indian Evidence Act.
sub-rule (2) of R. 19-A, C.P.C

See more information ...

Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This is the complainant's appeal challenging the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881. The acquittal was granted by the learned Judicial Magistrate, First Class, Vasco-da-Gama by Judgment/Order dated 21st September, 2002 in Criminal Case No. 163.N/2000.D.

The relevant factual matrix (as set out in the opinion) is as follows:

The complainant, a Credit Society (Bank), had advanced a loan of Rs. 1,50,000/- to the accused.
On or about 9th October, 2000 (the opinion also refers to 30th September, 2000 in certain places concerning account statements and liabilities), the accused issued a cheque for Rs. 90,000/- drawn on Bank of India, Headland Sada Branch, Vasco-da-Gama.
The cheque, when presented to the Goa State Co-operative Bank Limited, was returned endorsed "Funds insufficient".
The complainant claims to have sent a registered letter dated 23rd October, 2000, informing the accused of the cheque's return and calling upon payment within 15 days. On non-compliance, the complainant filed a complaint on or about 21st November, 2000.
During trial the complainant examined its Secretary and produced documents including the cheque and notice (registered postal A.D. card).
The learned Judicial Magistrate acquitted the accused on two principal bases: (a) that the A.D. card's signature did not tally with the accused's signature and therefore it could not be said that the accused had received the notice (the presumption in favour of the complainant was held to be rebutted); and (b) that the outstanding liability of the accused as on the date of issuance of the cheque was only Rs. 86,089/-, not Rs. 90,000/-, so the cheque was not in discharge of an existing liability.

Legal Issues Presented

Whether the statutory notice required by Section 138 of the Negotiable Instruments Act (demand notice within 30 days of receipt of banking information about dishonour) could be held to have been duly given by the complainant where the notice was dispatched by registered post and the A.D. card bore a signature that did not prima facie tally with the accused's signature.
Whether the presumption of service/deemed delivery under Section 27 of the General Clauses Act (and related presumptions under the Evidence Act/CPC jurisprudence) applies to notices sent by registered post in Section 138 cases and if so what is required to rebut that presumption.
Whether, on the evidence produced, the cheque for Rs. 90,000/- was issued towards the discharge (in whole or in part) of a debt or liability existing on the date of issuance—i.e., whether the accused's liability on that date was sufficient to bring the case within Section 138.

Arguments of the Parties

Appellant's Arguments (Mr. M.S. Sonak)

The Secretary examined for the complainant never unequivocally stated that the signature on the A.D. card was not the accused's; thus the accused could not simply rely on a signature discrepancy to defeat the presumption of service.
When a registered article is delivered at the business address of the accused (the address given by the accused when obtaining the loan and the address at which the accused had been served earlier), the presumption of service under Section 138 read with the presumption rules is satisfied.
Reliance was placed on authorities (cited in the opinion) to support that a properly addressed, prepaid and posted registered letter creates a rebuttable presumption of delivery/service which the accused failed to adequately rebut.

Respondent/Accused's Arguments (Mr. Nitin Sardessai)

To rebut the presumption of service it was not necessary for the accused personally to testify; the presumption could be rebutted from the evidence on record.
Once the complainant accepted that the signature on the A.D. card did not tally with the accused's signature, the complainant should have proved the notice's receipt by calling the postman (or similar evidence) to show actual reception by the accused.
Reliance was also placed on a local unreported decision (Shri Vijayanand Venktesh Naik v. Shri Thomas Rodrigues) which, according to the accused, holds that if the prosecution fails at the threshold to establish that a notice was duly received by the accused, the prosecution must fail.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Madan and Co. v. Wazir Jaivir Chand, (1989) 1 SCC 264 : AIR 1989 SC 630	Explains the practical operation of service by registered post and the limits of the postman's responsibilities; where a properly addressed registered letter is posted it is presumed delivered under Section 27 of the General Clauses Act.	Used to support the proposition that a sender who properly addresses and posts a registered letter can claim the benefit of a presumption of delivery under Section 27; emphasised that a postman's role differs from a process server.
Satish Jayantilal Shah v. Pankaj Mashruwala, 1996 Cri LJ 3099	Where dispatch by registered post is not under challenge and the address is correct, a presumption under Section 116 Indian Evidence Act can be raised that the notice reached the addressee.	Adopted to show that, despite differences in signature on A.D., correctness of address and dispatch allow raising a presumption of delivery.
K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 : 1999 Cri LJ 4606	Distinguishes "giving" notice from "receipt" for Section 138 purposes; accepts that Section 27 General Clauses Act principles can be imported where notice is correctly addressed and posted, and that such presumption is rebuttable but necessary to prevent evasion by dishonest drawers.	Heavily relied upon: court held that Section 27's presumption applies and that an accused cannot merely deny receipt (e.g., via denial on Section 313 statement) to rebut such presumption; more is required to rebut. This precedent formed the core basis for overturning the acquittal on the notice point.
Aparna Agencies v. P. Sudhakar Rao, 1999 (4) All MR (Journal) 11 : 2000 Cri LJ 1005	Interprets Section 27 General Clauses Act to require three conditions for presumed service by post: properly addressing, pre-paying, and posting by registered post; once these are satisfied and cover does not return, presumption arises.	Reiterated the necessity of the three requirements for deemed service; used to bolster the view that the complainant satisfied conditions for presumption of service.
Basant Singh v. Roman Catholic Mission, (2002) 7 SCC 531 : AIR 2002 SC 3557	Confirms that presumptions under Section 27 and analogous CPC provisions are rebuttable and that defendants may call material witnesses (e.g., postman) to contest the presumption.	Used to explain that while the presumption is rebuttable, the onus on the accused to produce convincing evidence (e.g., postman) exists; absence of such evidence weakens the accused's position.
Dalmia Cement Ltd. v. Galaxy Traders & Agencies Ltd., (2001) 6 SCC 463 : 2001 Cri LJ 972	Reiterates that Section 27 deals with the presumption of service of a letter sent by post; the despatcher can insist on this presumption but it is rebuttable and the despatcher then has options to prove or re-serve if needed.	Relied upon to show the complainant's right to claim the Section 27 presumption and to stress that the presumption is rebuttable but not easily displaced by mere denial; supports the conclusion that the Magistrate erred in finding the presumption rebutted here.
Shanku Concretes Pvt. Ltd. v. State of Gujarat, (2000) 3 Crimes 602 : 2000 Cri LJ 1988	Cited by the learned Magistrate below in relation to whether a cheque was issued in discharge of an existing debt or liability.	The Magistrate relied on this decision to conclude that because the recorded overdue was Rs. 86,089/- the cheque for Rs. 90,000/- was not in discharge of liability; the appellate court rejected that approach in light of other evidence showing larger liability.
Kochayippa v. Suprasidhan, 2002 (3) All MR (Journal) 31 : 2002 Cri LJ 4803	Holds that the amount in the cheque need not exactly match the amount of consideration; the phrase "in whole or in part" in Section 138 allows a cheque for a lesser (or different) amount to constitute a cause of action if it is towards satisfaction of debt or liability.	Relied upon to support that a cheque for Rs. 90,000/- could constitute part payment of a larger outstanding liability and thus fall within Section 138; used to reverse the Magistrate's finding on the liability point.
Shri Vijayanand Venktesh Naik v. Shri Thomas Rodrigues (unreported, Criminal Appeal No.26 of 2002 dated 4 July 2003)	Unreported decision relied upon by the accused to argue that failure to establish receipt of notice at threshold leads to collapse of prosecution.	The court noted this reliance but distinguished it on the basis that that unreported decision did not consider Section 27 General Clauses Act or the Supreme Court's K. Bhaskaran judgment; it therefore did not displace the cited authorities favouring deemed service in this appeal.

Court's Reasoning and Analysis

The court conducted a two-fold analytical review corresponding to the two grounds on which the learned Judicial Magistrate had acquitted the accused.

On Service of Notice (Presumption under Section 27 General Clauses Act)

The court examined statutory and precedent-based principles regarding service by post: Section 138 requires a written demand within a prescribed period from the "receipt" of communication about dishonour; Section 27 of the General Clauses Act provides that service by registered post, where properly addressed, pre-paid and posted, is deemed to be effected unless the contrary is proved.
Authorities (Madan & Co., Satish Jayantilal Shah, K. Bhaskaran, Aparna Agencies, Basant Singh, Dalmia Cement) were analyzed to extract the following consistent principles from the jurisprudence cited in the opinion:
- Properly addressed, pre-paid and posted registered letters are presumptively delivered (Section 27); the postman's role and limitations mean the law treats posting as sufficient to raise a presumption of delivery.
- The presumption is rebuttable but the rebuttal requires cogent, convincing evidence — mere denial of receipt or a discrepancy in signature on the A.D. card may not, by itself, displace the presumption.
- For Section 138, "giving" notice and "receipt" of notice are distinct; to avoid encouraging evasive strategies by drawers of cheques, courts have held that deeming delivery upon proper posting is a reasonable and practical rule.
Applying these principles, the court found the learned Magistrate erred in concluding that the presumption was rebutted merely because the Secretary admitted the A.D. card signature did not tally with the accused's signature. The court held that such an admission was insufficient, without more, to displace the statutory presumption of delivery that arises when a registered article is sent to the correct address.
The court emphasized that the accused could have led stronger, direct evidence (for example, calling the postman) to rebut the presumption but did not do so; reliance on an isolated signature discrepancy was inadequate.

On Existence of Liability at Time of Cheque Issuance

The learned Magistrate had found that the liability as on the date of issue was Rs. 86,089/-, not Rs. 90,000/-, and therefore Section 138 would not attract. The appellate court reviewed the documentary and oral evidence produced by the complainant.
Two statements produced by the complainant were material: one statement showed total amount availed (Rs. 1,50,000/-) and an overdue figure of Rs. 86,089/-, while another statement showed that the balance in the accused's account as on 30th September, 2000 was Rs. 1,92,350/-. The complainant had argued that the balance due and payable was Rs. 1,92,350/- but the learned Magistrate appears to have overlooked that submission and only considered the 86,089 figure.
The appellate court concluded that on the evidence — oral and documentary — it was "abundantly clear" that the accused owed Rs. 1,92,350/- on 30th September, 2000, which was much more than the cheque amount of Rs. 90,000/-. Therefore, the cheque plainly represented payment towards an existing liability (in part), and Section 138 applied.
The court found the Magistrate's contrary finding to be perverse because it ignored or overlooked material evidence demonstrating a larger outstanding liability.
The court also relied on precedent (Kochayippa v. Suprasidhan and the reasoning in K. Bhaskaran) to reinforce that a cheque need not equal the full consideration or debt amount; part-payment cheques can support a Section 138 prosecution where the cheque is towards discharge, in whole or in part, of a debt or liability.

Holding and Implications

Core Ruling: The appeal is allowed and the accused is held guilty under Section 138 of the Negotiable Instruments Act, 1881.

Implications and Consequences

Direct effect on the parties: The earlier judgment/order of acquittal by the learned Judicial Magistrate, First Class is set aside and the accused is found guilty under Section 138 for issuing a cheque that was dishonoured and which was towards the discharge (in part) of an existing liability.
On legal principles: The court reaffirmed that presumptions of delivery under Section 27 of the General Clauses Act (and related presumptions in the Evidence Act/CPC jurisprudence) apply to notices sent by registered post; such presumptions are rebuttable but cannot be displaced merely by a signature discrepancy on an A.D. card or a bare denial — the accused must lead cogent evidence to rebut delivery (for example, testimony of the postman or other convincing material evidence).
On precedent and practice: The decision follows and applies established Supreme Court authorities (including K. Bhaskaran, Madan & Co., Dalmia Cement and others) and emphasizes that judicial interpretation should avoid enabling dishonest evasion of statutory notice requirements in Section 138 prosecutions.
Scope as precedent: The opinion applies and clarifies existing law as to deemed service by registered post and proof of liability at the time of cheque issuance. The court did not purport to create novel law beyond the precedents it relied upon; rather, it applied and reconciled them to the facts before it.

Note: This summary is prepared strictly from the content of the provided opinion. No information beyond the opinion has been added or inferred.

Show full summary ...

Vasco Urban Co-Op. Credit Society Ltd. v. Mrs. Shobha D. Korgaonkar .

1. This is complainant's appeal against acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881 (Act, for short) by Judgment/Order dated 21st September, 2002 of the learned Judicial Magistrate, First Class, Vasco-da-Gama, in Criminal Case No. 163.N/2000.D.

2. There is no dispute that the complain ant-Credit Society had advanced a loan of Rs. 1,50,000/- to the accused. On or about 9th October, 2000, the accused issued a cheque to complainant in the sum of Rs. 90,000/- drawn on Bank of India, Headland Sada Branch, Vasco-da-Gama. When the said cheque was presented to the Goa State Co-operative Bank Limited, the same was returned with endorsement “Funds insufficient”. The complainant claims to have sent a registered letter dated 23rd October, 2000, informing the accused that the said cheque was returned with the said remark and calling upon the accused to make the payment of Rs. 90,000/- within a period of 15 days from the receipt of the said notice. As the said notice was not complied with, the complainant filed a complaint on or about 21st November, 2000, and thereafter, in the course of the trial, the complainant examined their Secretary and produced necessary documents including the said cheque, notice, etc.

3. The learned Judicial Magistrate, First Class, has acquitted the accused on two counts. The first is on the basis that the A.D card produced by the complainant it could not be said that the accused had received the said notice. The second is that what was due and payable by the accused to the complainant as on the date of issuance of the said cheque on 30th September, 2000. was Rs. 86,089/- and, therefore, there was no existing liability on the part of the accused to pay Rs. 90,000/- being the amount of the cheque issued to the said complainant.

4. Admittedly, the learned Judicial Magistrate, First Class, has concluded that the notice issued was addressed to the accused at her business address, an address which was given by the accused when she obtained the said loan as well as the address where the accused was served with the summons sent to the accused in the said criminal case. It is also an admitted position that the said Secretary who was examined on behalf of the complainant admitted in his evidence that the signature on the A.D card did not tally with the signature of the accused. On facts, the learned Judicial Magistrate, First Class, concluded that it could not be said that the accused had received the said notice, and therefore, was not liable for an offence under Section 138 of the Act. The learned Judicial Magistrate, First Class also came to the conclusion that the presumption which was otherwise available in favour of the complainant, was rebutted.

5. This first finding of the learned Judicial Magistrate, First Class has been challenged by Mr. M.S Sonak, learned Counsel of the appellant by placing reliance on various authorities. It is the submission of Mr. Sonak, learned Counsel that the said Secretary who was examined on behalf of the complainant had at no stage stated that the said signature on the said A.D card was not that of the accused and that it would be open for any accused to scribble anything on a A.D card and then turn around and say that the signature was not of the accused. It is his submission that as long as the said registered article was delivered at the business address of the accused, the provisions of section 138 of the Act r/w the presumption available to the complainant, would be satisfied.

6. On the other hand. Mr. Nitin Sardessai, learned Counsel of the respondent/accused has submitted that in order to rebut the said presumption it was not necessary for the accused to have stepped into the witness box and the said presumption could also be rebutted from the evidence led on behalf of the complainant. Mr. Sardessai, learned Counsel has submitted that once it was accepted on behalf of the complainant that the signature was not that of the accused, it was for the complainant to have proved, by examining the postman, that the postal article was in fact received by the accused.

7. Section 138(b) of the Act, inter alia,. provides that the payee or the holder in due course of the cheque, as the case may be, is required to make a demand for the payment of money by giving a notice in writing, to the drawer of the cheque, within 30 days from the receipt of the amount from the Bank regarding the return of the cheque, as unpaid. Section 27 of the General Clauses Act, 1897, deals with meaning of service by post and provides that where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression “serve” or either of the expression “give” or “send” or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected al the time at which the letter would be delivered in the ordinary course of post.

8. In the case of Madan and Co. v. Wazir Jaivir Chand, (1989) 1 SCC 264 : (AIR 1989 SC 630) the Apex Court was dealing with a notice despatched by registered post and in this context, the Supreme Court stated that all that a landlord can do to comply with this provision is to post an acknowledgment due or otherwise containing the tenant's correct address and once he does this and the letter is delivered to the post office, he has no control over it. It is then presumed to have been delivered to the addressee under Section 27 of the General Clauses Act. Under the rules of the post office, the letter is to be delivered to the addressee or person authorized by him. Such a person may either accept the letter or decline to accept it. In either case, there is no difficulty, for the acceptance or refusal can be treated as a service on, and receipt by, the addressee. The difficulty is where the postman calls at the address mentioned and is unable to contact the addressee or a person authorised to receive the letter. All that he can then do is to return it to the sender. The Indian Post Office Rules do not prescribe any detailed procedure regarding the delivery of such registered letters. When Lhe postman is unable to deliver it on his first visit, the general practice is for the postman to attempt to deliver it on the next one or two days also before returning it to the sender. However, he has neither the power nor the time to make enquiries regarding the whereabouts of the addressee; he is not expected to detain the letter until the addressee chooses to return and accept it; and he is not authorised to affix the letter on the premises because of the assessee's absence. His responsibilities cannot, therefore, be equated to those of a process server entrusted with the responsibilities of serving the summons of a Court under Order V of the CPC. The Hon'ble Supreme Court further proceeded to observe that they had to choose the more reasonable, effective, equitable and practical interpretation and that would be to read the word “served” as “sent by post”, correctly and properly addressed to the tenant, and the word “receipt” as the tender of the letter by the postal peon at the address mentioned in the letter. No other interpretation, would fit the situation as it was simply not possible for a landlord to ensure that a registered letter sent by him gets served on, or is received by, the tenant.

9. In the case of Satish Jayantilal Shah v. Pankaj Mashruwala, 1996 Cri LJ 3099, the Court was dealing with the service of legal notice as contemplated under sub clause (b) to the proviso of Section 138 of the Act. The contention raised was that the notice did not bear the signature of the applicant and it was found that the signature of the A.D differed from the cheque in question. The Court noticed that the question was whether it was received or reached at the address mentioned and that the correctness of the address as mentioned in the cause title of the notice as well as on the acknowledgment was not in dispute. The Court, therefore, concluded that since the despatch of notice by registered post was not under challenge a presumption that notice/letter had reached and delivered to the addressee could be raised under Section 116 of the Indian Evidence Act. Since the address was correct and the letter posted by ordinary course reaches to the addressee the Court had no hesitation in raising presumption that the notice in question did reach to the addressee and had been delivered to the addressee or any authorised person on his behalf and, therefore, the contention was rejected.

10. In the case of K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 : (1999 Cri LJ 4606) the Apex Court was considering whether a cause of action would arise in a case where the notice was returned with endorsement as “unclaimed” and the Apex Court observed that on the part of the payee he has to make a demand by giving a notice in writing. If that was the only requirement to complete the offence on the failure of the drawer to pay the cheque amount within 15 days from the date of “giving”, the travails of the prosecution would have been very much lessened but the Legislature says that failure on the part of the drawer to pay the amount should be within 15 days “of the receipt”. It is, therefore, clear that “giving notice” in the context is not the same as receipt of notice. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the notice to the drawer at the correct address. The Court then referred to the Black's Law Dictionary and observed that if a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act. it must be borne in mind that the Court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure. Referring to a notice which is unclaimed the Apex Court proceeded to refer to Section 27 of the General Clauses Act, 1897 and observed further that no doubt Section 138 of the Act does not require that the notice should be given only by “post”. Nonetheless the principle incorporated in Section 27 can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was really not served and that he was not responsible for such non-service. Any other interpretation can be proved to lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice.

11. In the case of Aparna Agencies, Hyderabad v. P. Sudhakar Rao, 1999 (4) All MR (Journal) 11 : (2000 Cri LJ 1005) the Andhra Pradesh High Court referring to Section 27 of the General Clause Act, 1897 and while dealing with a case under Section 138 of the Act observed that the language of Section 27 was plain and immediately three requirements were to be fulfilled for presuming deemed service namely:— (1) properly addressing, (2) pre-paying, and (3) posting of registered post. The High Court observed that if the registered cover did not return back it is a situation which was not at all contemplated either by Section 27 of the General Clauses Act or Section 11 of the Indian Evidence Act. The Court further observed that service shall be deemed to have been effected by (1) properly addressing, (2) pre-paying, and (3) posting of registered post and once the said requirements were complied with the raising of presumption of deemed service were made out.

12. In the case of Basant Singh v. Ro man Catholic Mission, (2002) 7 SCC 531 : AIR 2002 SC 3557, the Apex Court again dealing with Section 27 of the General Clauses Act in relation to Order 5, proviso to sub-rule (2) of R. 19-A, C.P.C observed that once it is proved that summons were sent by registered post to a correct and given address, the defendants' own conduct becomes important. The Apex Court observed that the presumption both under Section 27 of the General Clauses Act,. 1897 as well as O. 5, proviso to sub-rule (2) of R. 19-A, C.P.C were rebuttable and it was always open to the defendants to rebut the presumption by leading convincing and cogent evidence. In the context of the facts of that case, the Apex Court observed that the defendants could have examined the postman who might have been a material witness and whose evidence might have had a material bearing for proper adjudication but had failed to discharge the onus passed upon them.

13. On the other hand, on behalf of the accused, reliance has been placed on an unreported decision of this Court dated 4th July, 2003, in Criminal Appeal No. 26 of 2002 in the case of Shri Vijayanand Venktesh Naik v. Shri Thomas Rodrigues. In this case, this Court observed that if the prosecution at the very threshold fails to establish that a notice has been duly received by the accused, the prosecution so launched is bound to fail. Apparently, it was a case where the A.D card had a signature of one Amonkar and not the accused Thomas Rodrigues. However, it is seen that there is no reference in that case either to Section 27 of the General Clauses Act, 1897 or to the judgment of the Supreme Court in the case of K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999 Cri LJ 4606) (supra).

14. In the case of Dalmia Cement Ltd. v. Galaxy Traders and Agencies Ltd., (2001) 6 SCC 463 : (2001 Cri LJ 972) the Apex Court referred to the case of K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999 Cri LJ 4606) (supra) and again observed that Section 27 of the General Clauses Act deals with the presumption of service of a letter sent by post. The despatcher of a notice, has, therefore, a right to insist upon and claim the benefit of such a presumption. But as the presumption is a rebuttable one, he has two options before him. One is to concede to the stand of the sendee that as a matter of fact he did not receive the notice and the other is to contest the sendee's stand and take the risk for proving that he, in fact received the notice. It is open to the despatoher to adopt either of the opinion if he opts for the former, he can afford to take appropriate steps for the effective service of notice upon the addressee. Such a course appears to have been adopted by the appellant-Company in this case and the complaint filed, admittedly, within limitation from the date of the notice of service conceded to have been served upon the respondents. It may be noted that in this case, the accused by their letter dated 13-6-1998, had intimated to the complainant that they had in fact received empty envelops without any contents and requested the appellants to mail the contents and as a abundant caution the cheque was presented again and after its dishonour another statutory notice was issued to the accused which was received by the accused on 27-7-1998.

15. The submission made on behalf of the accused that the ratio of K. Bhaskaran's case, (1999 Cri LJ 4606) will not be attracted to the case at hand cannot be accepted. This is a case where the notice was sent at the business address of the accused and was received at the business address of the accused, about which there is no dispute. If the presumption available under Section 27 of the General Clauses Act, 1897 can be imported in a case where the notice is returned as “unclaimed” it can with equal force if not more be imported in a case where the postal article is received at the business address of the accused irrespective of whether it was received by the accused himself or herself or by some other member of his or her family. No doubt, the presumption under Section 27 of the General Clauses Act, 1897 is a rebuttable presumption but the said presumption cannot be rebutted by an accused only by denying the receipt of the notice in the statement under Section 313 of the Code of Criminal Procedure, 1973. Certainly, something more than that is required to be done on the part of the accused to rebut the said presumption. As rightly observed by the Apex Court in the case of K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999 Cri LJ 4606) (supra) any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice. It also cannot be ruled out that a cunning accused person may just scribble something on the A.D card and not his real signature with a view to take a plea that such a notice was not received by the accused and this also could not be ruled out in the case at hand. As observed by the Supreme Court in the case of Dalmia Cement Ltd. v. Galaxy Traders and Agencies Ltd., (2001 Cri LJ 972) (surpa) efforts to defeat the objectives of law by resorting to innovative measures and methods are to be discouraged, lest it may affect the commercial and mercantile activities in a smooth and healthy manner, ultimately affecting the economy of the country. The laws relating to the Act which, therefore, requires to be interpreted in the light of the object intended to be achieved by it despite there being deviation in the general law and the procedure provided for the redressal of the grievance to the litigants. The presumption available under Section 27 of the General Clauses Act or for that matter under Section 114(f) of the Indian Evidence Act, 1872 is available to both Civil as well as Criminal proceedings. It was for the accused to rebut the said presumption either through the evidence led by the complainant or by leading evidence-. In this case, accused has failed to rebut the said presumption available in favour of the complainant under Section 27 of the General Clauses Act, 1897. This being the position in my view, the learned Judicial Magistrate, First Class, committed a gross error in holding that the presumption in favour of the complainant was rebutted by the accused by establishing that she had not received the said notice. The, admission on behalf of the complainant that the signature on the A.D card did not tally with the signature of the accused was not sufficient to displace the said statutory presumption.

16. On the second count, the learned Judicial Magistrate, First Class, came to the conclusion that the liability of the accused as on 30th September, 2000, was only Rs. 86,089/- and not Rs. 90,000/-, being the value of the cheque which was issued in favour of the complainant. The learned Judicial Magistrate, First Class, relied on the case of Shanku Concretes Pvt. Ltd. v. State of Gujarat, (2000) 3 Crimes 602 : (2000 Cri LJ 1988) and held that since the cheque issued was not in discharge of the existence debt or liability, the provisions of Section 138 of the Negotiable Instruments Act, 1881 would not be attracted.

17. Section 138, inter alia, provides that where any cheque drawn by a person 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, is returned by the Bank unpaid, either because of the amount of money outstanding to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that Bank, such person shall be deemed to have committed an offence and shall, without prejudice to any provisions of this Act, be punished with imprisonment for a term…………. etc. In other words. Section 138 provides for issuance of a cheque towards debt or other liability in whole or in part. On behalf of Complainant in this case two statements were produced, one of which showed that the total amount availed by the accused was Rs. 1,50,000/- and which also showed that the total amount overdue by the accused as on 30th September, 2000, was Rs. 86,089/- and the other which showed that the balance in the account of the accused as on 30th September, 2000 was Rs. 1,92,350/-. In fact, it was argued before the learned Judicial Magistrate, First Class that the balance due and payable by the accused as per Exh. PW1.E was Rs. 1,92,350/-. However, it appears that the learned Judicial Magistrate, First Class, totally overlooked the said submission-made before him and considered only the submission which was made with reference to Exh. PW1/3-3 that the overdue amount as on 30th September, 2000, was Rs. 86,089/-. From the evidence produced on behalf of the complainant, both oral and documentary, it was abundantly clear that the accused owed to the Bank on 30th September, 2000, a total sum of Rs. 1,92,350/- and the cheque which was issued for Rs. 90,000/- was for an amount which was much less than the amount due.

18. It is the submission of Mr. Nitin Sardessai, learned Counsel of the respondent/accused that there is no perversity in the second finding given by the learned Judicial Magistrate, First Class. In my view, there is absolute perversity in the said finding because the learned Judicial Magistrate, First Class, has overlooked the fact that on the date of issuing the cheque, the accused had owed to the complainant-Bank a total sum of Rs. 1,92,350/- which was much more than the amount of the cheque of Rs. 90,000/- only and being so, the said cheque was issued only towards the part of the liability which the accused had towards the repayment of the loan taken by the accused. This finding deserves to be upset as perverse.

19. Mr. M.S Sonak, learned Counsel has placed reliance on the case of Kochayippa v. Suprasidhan, 2002 (3) All MR. (Journal) 31 : (2002 Cri LJ 4803) (Kerala). It has been held in this case that a perusal of the provisions of section 138 shows that the amount mentioned in the cheque need not be the same as the amount of consideration that actually passed. The words “in whole or in part” of any debt or other liability assumes significance in this context. Even if the cheque is for a lesser amount than the actual amount of consideration, still a cause of action would be available to the payee under Section 138 of the Negotiable Instruments Act. If that is so the question of a cheque for a larger amount than what is actually received by the accused also would make no difference provided the entire amount so mentioned is necessary to discharge the debt or legal liability. In conclusion, it may be observed that the finding given by the learned Judicial Magistrate, First Class on both counts deserves to be set aside as erroneous and perverse. Consequently, it must be held that the complainant had proved its case beyond reasonable doubt against the accused. The accused, is, therefore, hereby held guilty under Section 138 of the Negotiable Instruments Act, 1881.

20. Appeal allowed.

Vasco Urban Co-Op. Credit Society Ltd. v. Mrs. Shobha D. Korgaonkar .

Structured Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments (Mr. M.S. Sonak)

Respondent/Accused's Arguments (Mr. Nitin Sardessai)

Table of Precedents Cited

Court's Reasoning and Analysis

On Service of Notice (Presumption under Section 27 General Clauses Act)

On Existence of Liability at Time of Cheque Issuance

Holding and Implications

Implications and Consequences

Vasco Urban Co-Op. Credit Society Ltd. v. Mrs. Shobha D. Korgaonkar .

Comments