1996 (3) TMI 568 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of complaints filed in personal names without impleading proprietary concerns.
2. Applicability of Section 138 of the Negotiable Instruments Act when the body of the cheque is not written by the drawer.
3. Validity of the cheques as discharge of legal debt or liability.
4. Service of legal notice under Section 138(b) of the Negotiable Instruments Act.
5. Comparison of signatures by the court under Section 73 of the Indian Evidence Act.
6. Nature of dishonour of cheque as a civil wrong and criminal liability.

Detailed Analysis:

1. Validity of Complaints Filed in Personal Names:
The applicant argued that since the cheques were given by a proprietary concern to another proprietary concern, the complaints should have been filed in the names of the proprietary concerns and not in personal names. The court held that proprietary concerns are not legal entities or juridic persons; they are synonymous with their proprietors. Therefore, the omission to name the proprietary concerns does not invalidate the complaints. The court referenced the definition of "person" under Section 11 of the Indian Penal Code and Section 3(42) of the General Clauses Act, concluding that a proprietary concern cannot initiate or be subject to proceedings independently of its proprietor.

2. Applicability of Section 138 When the Body of the Cheque is Not Written by the Drawer:
The applicant contended that the body of the cheques was not written by the drawer, and thus, the provisions of Section 138 of the Negotiable Instruments Act were not applicable. The court dismissed this argument, stating that what is material is the signature of the drawer or maker, not the body writing. The court emphasized that the applicant admitted to issuing the cheques, and the only defense at trial was that the cheques were given as advance payment, which was not a valid defense under the law.

3. Validity of the Cheques as Discharge of Legal Debt or Liability:
The court found that the complainant had provided ample evidence that goods were sold and delivered to the applicant, and the cheques were given towards payment of these goods. The court noted that the amounts on the cheques matched the invoice amounts, indicating they were given in discharge of legal dues and liability. The court also referenced the presumption under Section 118 of the Negotiable Instruments Act that a negotiable instrument is made or drawn for valid consideration, which the applicant failed to rebut.

4. Service of Legal Notice Under Section 138(b):
The applicant argued that no legal notice was served as required under Section 138(b) of the Negotiable Instruments Act. The court found that notices were sent by registered post to the correct address, and the acknowledgment receipts were produced. The court raised a presumption under Section 16 of the Indian Evidence Act that the notices reached the addressee. The court also referenced a Supreme Court decision stating that service of notice is valid even if the addressee manages to have the notice returned with certain postal remarks.

5. Comparison of Signatures by the Court:
The applicant raised an issue regarding the court comparing signatures under Section 73 of the Indian Evidence Act. The court clarified that while it is not an expert, it can compare signatures in light of other admitted evidence on record. The court noted that its findings were not based solely on the comparison of signatures but were supported by other cogent material and evidence.

6. Nature of Dishonour of Cheque as Civil Wrong and Criminal Liability:
The court acknowledged that the dishonour of a cheque is fundamentally a civil wrong arising from a breach of contract. However, Section 138 of the Negotiable Instruments Act introduces criminal liability to prevent dishonesty and abuse of negotiable instruments. The court emphasized that the criminal liability is intended to restore faith in banking operations and commercial transactions. The court held that any irregularity in the service of notice would be procedural and not substantive, and would not vitiate the proceedings.

Conclusion:
The court concluded that the applicant committed an offense under Section 138 of the Negotiable Instruments Act and upheld the concurrent findings of the lower courts. The court found no illegality or error in the appreciation of evidence or exercise of jurisdiction. The revision applications were rejected, and the applicant was granted time to surrender before the trial court to serve the sentence.