2015 (7) TMI 1373 - HC - Indian Laws

Dishonor of cheque - time limitation - cheque was issued towards discharge of a legally enforceable debt or not. Time Limitation - what should be the date of receipt of the notice in a case where there is a deemed service in which the drawer has either refused or the notice is returned as unclaimed. Whether it would be the actual date of the refusal or the date on which the drawer has unclaimed the envelope or it would be the date of intimation of such refusal to the payee? - HELD THAT - In the case of a service by post the same 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 it will be deemed to have been effected at the time at which the letter would be delivered in the ordinary course of post - it would be the date on which the drawer has actually refused or has unclaimed the envelope which will have to be reckoned as the date of deemed service and not the date on which the intimation of refusal is received by the payee. The provisions contained under Section 138 of the Act being penal in nature and moreso providing for a reverse onus have to be strictly complied and when the Legislature has purposely used the term from receipt of the notice it would not be possible to read into it the date of receipt of the intimation of the refusal as the relevant date (in a case of deemed service/refusal of the notice by the accused). That in my humble view would be doing violence to the language which is otherwise plain and explicit. I also find that the possible prejudice if any or the disadvantage caused to the complainant on account of the delayed receipt of an intimation of refusal can be adequately taken care of by the provisions permitting condonation of delay in filing the complaint. This is not to suggest that in every case this would be a sufficient ground for condonation of delay - the learned Magistrate has rightly come to conclusion that the complaint was not filed within time as the date of refusal has to be reckoned as 24/05/2011 and the complaint is filed on 13/07/2011. The learned Magistrate has also noticed that there was no prayer for condonation of delay. Even in the appeal or arguments advanced at the bar it was not urged that the delay if any may be condoned. The appellant all along claimed that the complaint is filed within time. Be that as it may in the result the point No. 1 is answered in the negative. Whether the cheque was passed in discharge of a legally enforceable debt or liability would fall into insignificance as the finding on the point No. 2 one way or other would not change the ultimate result of dismissal of the complaint? - HELD THAT - In a case where the accused admits the signature on the cheque a presumption arises under Section 139 of the Act in favour of the complainant. It is now well settled that while the prosecution is obliged to prove its case beyond reasonable doubt the accused can prove his defence or rebut the presumption as is available to the complainant under Section 139 of the Act on mere preponderance of probability - The presumption under Section 139 of the Act is a statutory presumption which is evident from employment of the word shall . Thus the Court is obliged to raise such a presumption once the facts necessary for raising of such presumption are established. It is further well settled that for rebuttal of such presumption it is not necessary as a rule that the accused shall enter into the witness box or should lead independent evidence. There were certain aspects about the envelope exhibit PW1/20 put to the witness in which he has admitted that the word refused on the envelope is cancelled and there is some scribbling there. He does not know as to who has done the said scribbling. He also admitted that the envelope was in torn condition. It was suggested to him that he has refused the legal notice which was denied. He stated that he is not aware if the respondent is in the business of developing plots. On consideration of the evidence it is found that non-production of the Income Tax Returns particularly in the wake of the fact that the appellant had admitted that the amount is reflected in the same would be sufficient to raise an adverse inference - The presumption stood rebutted - answered in the negative. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Whether the complaint can be said to be filed within time.
2. Whether the appellant proves that the cheque was issued towards discharge of a legally enforceable debt.

Issue-wise Detailed Analysis:

Point No. 1 - Limitation of Filing the Complaint:

The issue of limitation is crucial and must be addressed first. The relevant statutory provisions are Section 138 and Section 142(b) of the Negotiable Instruments Act, 1881. Section 138 outlines the conditions under which dishonour of a cheque constitutes an offence, including the requirement that the cheque be presented within six months, notice of dishonour be given within 30 days, and the drawer fails to pay within 15 days of receiving the notice. Section 142(b) mandates that the complaint must be filed within one month from the date on which the cause of action arises, i.e., the non-payment within 15 days of receipt of notice.

The primary question is the date of 'receipt' of the notice when it is refused or unclaimed by the drawer. The appellant argued that the date of receipt should be 01/06/2011, when the intimation of refusal was left at the appellant's house, making the complaint filed on 13/07/2011 timely. The respondent contended that the date of refusal, 24/05/2011, should be considered, making the complaint time-barred.

The court observed that under Section 27 of the General Clauses Act, 1897, service by post is deemed to be effected when properly addressed, pre-paid, and posted, unless proved otherwise. The court concluded that the date of actual refusal or unclaimed status (24/05/2011) should be considered the date of deemed service, not the date of intimation to the payee. This interpretation aligns with the statutory language and avoids placing the limitation period at the mercy of postal authorities.

The court also noted that the appellant did not seek condonation of delay, asserting that the complaint was timely. Consequently, the court found that the complaint was not filed within the prescribed time, answering Point No. 1 in the negative.

Point No. 2 - Legally Enforceable Debt:

Given the finding on Point No. 1, the issue of whether the cheque was issued towards a legally enforceable debt becomes secondary. However, the court addressed it for completeness.

Under Section 139 of the Act, a presumption arises in favour of the complainant when the accused admits the signature on the cheque. This presumption can be rebutted by the accused on a preponderance of probability, not necessarily requiring the accused to enter the witness box or produce independent evidence.

In this case, the appellant, an Advocate and Notary, claimed that the cheque was issued as repayment of a loan of Rs. 2 Lakhs. The respondent countered that the cheque was given as an advance for conveyancing services, which were not rendered. The appellant did not produce Income Tax Returns or other documents to substantiate the loan claim, despite stating that the amount was reflected in his returns. The court found that the non-production of these returns and other inconsistencies in the appellant's testimony raised an adverse inference.

The court concluded that the presumption under Section 139 was successfully rebutted by the respondent, answering Point No. 2 in the negative.

Conclusion:

The appeal was dismissed as the complaint was not filed within the statutory period, and the cheque was not proven to be issued towards a legally enforceable debt.