2021 (10) TMI 33 - HC - Indian Laws

Dishonor of cheque - pre-mature filing of complaint before expiry of the statutory period 15 days from the date of deemed service of the demand notice - insufficient fund or closure of the account prior to the deposit of the cheque - section 139 of N.I. Act - HELD THAT - This Court is of the view that the presumption regarding service of demand notice sent even through registered cover can be drawn only upon expiry of 30 days from the date of dispatch of notice as has been held by the Hon'ble Supreme Court in SUBODH S. SALASKAR VERSUS. JAYPRAKASH M. SHAH ANR 2008 (8) TMI 795 - SUPREME COURT . In the said judgment the notice was sent through speed post and although the actual date of service of notice was not known, the Complainant proceeded on the basis that the same was served within the reasonable period. It was held that if the presumption of notice within the reasonable period is raised, the deemed service at best can be taken to be 30 days from the date of its issuance and the accused was required to make payment in terms of the said notice within 15 days thereafter and the complaint petition therefore could have been filed after expiry of 15 days given to the accused for payment of money after receipt of notice. This Court finds that the law has been well settled by the aforesaid judgment that the cause of action for filing a Complaint under Section 138 of the Negotiable Instruments Act cannot arise before expiry of 15 days from the date of service of notice upon the accused - this Court finds that in absence of the specific date regarding service of notice, the demand notice sent on 17.02.2006 under registered post would be deemed to be served upon the petitioner on 18.03.2006 i.e. only after expiry of 30 days from the date of issuance of the demand notice and the cause of action for filing the Complaint would have arisen on expiry of 15 days thereafter i.e. only after 02.04.2006 and the Complaint could have been filed thereafter, but the Complaint in the present case was filed on 17.03.2006. This Court is of the considered view that both the learned courts below have erred in holding that the Complaint was maintainable - this Court holds that the Complaint filed before expiry of the statutory period 15 days from the date of deemed service of the demand notice upon the petitioner regarding the dishonour of the cheques was premature in view of the fact that the cause of action for filing the Complaint had not arisen on 17.03.2006 and therefore, the Complaint itself was pre-matured and was not legally maintainable. The petitioner is acquitted on the ground that the complaint itself was pre-mature and consequently, he is discharged from the liability of his bail bond - the present criminal revision petition is hereby allowed.

Summary

Issues Involved:
1. Legality of the conviction under Section 138 of the Negotiable Instruments Act.
2. Validity of the sentence and compensation order under Section 357 of Cr.P.C.
3. Admissibility and service of demand notice.
4. Timeliness and maintainability of the complaint.

Detailed Analysis:

Legality of the Conviction under Section 138 of the Negotiable Instruments Act:
The petitioner was convicted under Section 138 of the Negotiable Instruments Act by the trial court and the conviction was upheld by the appellate court. The petitioner argued that the cheques were issued for admission purposes and misused by the complainant, thus not against a legal debt. The trial court found that the cheques were dishonored due to insufficient funds and account closure, establishing a presumption of legally enforceable debt under Section 139 of the N.I. Act. The appellate court confirmed this, stating that the cheques were issued in lieu of a ?20 lakh debt, making the complainant a holder-in-due course.

Validity of the Sentence and Compensation Order under Section 357 of Cr.P.C.:
The trial court sentenced the petitioner to one year of simple imprisonment and a fine of ?2,000, with an additional compensation of ?19,50,000 to the complainant. The appellate court set aside the compensation order and remanded the case to the trial court for rehearing on the sentence, in line with the law laid down by the Supreme Court in R. Vijjayan vs. Bebi and Section 357(3) of Cr.P.C.

Admissibility and Service of Demand Notice:
The petitioner contended that there was no proof of service of the demand notice, making the complaint premature. The appellate court noted that the postal receipt and the complainant's testimony indicated the notice was sent, but there was no cross-examination on the service point. The court presumed valid service based on the postal receipt and the petitioner's admission of the correct address.

Timeliness and Maintainability of the Complaint:
The court found that the complaint was filed prematurely, as the legal notice was deemed served on 18.03.2006, and the complaint was filed on 17.03.2006, before the expiry of the statutory 15-day period required by Section 138(c) of the N.I. Act. The Supreme Court's judgments in Subodh S. Salaskar vs. Jayprakash M. Sah and Yogendra Pratap Singh vs. Savitri Pandey clarified that the cause of action arises only after the 15-day period post-service of notice. Consequently, the complaint was deemed premature and not legally maintainable.

Conclusion:
The High Court set aside the judgments of the lower courts, acquitted the petitioner, and discharged him from bail, ruling that the complaint was premature. The complainant was granted the liberty to file a fresh complaint in accordance with the law. The criminal revision petition was allowed, and pending interlocutory applications were closed. The lower court records were ordered to be sent back, and a copy of the judgment was to be communicated to the concerned court.