9911796707
TMI Blog2022 (6) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... mited, Barabazar Branch, Kolkata in favour of the complainant/company on 15th March, 2013. The said cheque was deposited for encashment with the banker of the complainant/company, but it was dishonoured on the ground "funds insufficient" on 16th March, 2013. This led the complainant to issue a notice through his learned Advocate on 11th April, 2013 and 16th April, 2013 respectively requesting the respondents to make payment of the said sum of Rs.20 lakhs within a period of 15 days from the date of receipt of the respective notices. The respondents neglected and refused to pay the said sum of Rs.20 lakhs in spite of receipt of demand notice. So was the complaint under Section 138 of the Negotiable Instrument Act was initiated. 3. During trial, authorized representative of the complainant/company was examined. Copy of notice under Section 138(b) of the Negotiable Instrument Act, postal receipt and postal track report in respect of respondent No.1/company were exhibited. 4. The learned Magistrate, on completion of trial dismissed the said complaint case and acquitted the respondents under Section 255(1) of the Code of Criminal Procedure holding, inter alia, that the notice demanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... postal receipt. The learned trial judge wrongly held that no demand notice was served upon the respondent No.1/company. 7. It is further submitted by the learned Advocate for the appellant that notice was also sent to the respondent No.2 who is one of the directors and authorized signatory of the impugned cheque under registered speed post with AD. The said notice was duly served upon the respondent No.2. It is submitted by the learned Advocate for the appellant that the respondent No.2 represented the respondent No.1/company throughout the transaction which is the subject matter of the complaint under Section 138 of the Negotiable Instrument Act. He is one of the directors and authorized signatory of the company. He issued the promissory note in favour of the complainant/company on receipt of a cheque of Rs.20 lakhs on 17th August, 2012. The said promissory note was marked during trial as Exhibit-2. He also issued the dishonoured cheque in favour of the complainant/company. Under such factual background, the respondent No.2 can be safely assumed to be the alter ego of the company. He is the human agency representing a corporate entity in the transaction which is the subject matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the dishonoured cheque shall be deemed to be a notice issued upon the company itself inasmuch as the knowledge of the said human agency of the notice may be attributed to the body corporate itself. 14. It has finally been argued that the notice under section 138(b) of the Act must be construed strictly as it forms a part of a penal provision. Traditionally, penal provisions call for strict interpretation but such view is increasingly yielding to a more purposive interpretation in recent times. While interpreting the requirement of sending a notice under section 138(b) of the Act in this perspective the object and intention of the legislature must not be lost sight of and a narrow pedantic approach ought not to be taken so that a defaulter may escape penal consequences. Negotiable Instruments Act is a legislation operating in the commercial field and section 138 thereof was incorporated to give tooth and claw to the legislation so as to ensure greater accountability and creditability in commercial transactions relating to cheques. This legislative intention ought to be the guiding principle while construing the validity of notice issued under the aforesaid provision of law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served and that he was not responsible for such non-service. 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. Coming to the instant case it is repeatedly urged by the learned Advocate for the appellant that the notice was sent to the respondents/company in the address written on the copy of the notice (Exhibit-5). The postal track shows that it was duly served upon the respondent/company on 12th April, 2013. Therefore, the service of notice qua the complainant/company cannot be disputed. 10. It is however submitted by the learned Advocate for the appellant that during trial the appellant failed to prove service of notice upon respondent No.2 out of inadvertence. The complainant/company is in possession of the documents to prove that the notice was served upon the respondent No.2. The complainant may be permitted to bring the said fact and documents in evidence and an order of remand with proper direction upon the learned Magistrate may be passed in the instant appeal. 11. Learned Advocate for the respondents, on the other hand, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company was not arraigned as accused. No demand notice was served upon the company. Under such factual backdrop the Hon'ble Supreme Court held that in the absence of the company being arraigned as accused, prosecution of appellant/accused is not maintainable. As there was no demand notice against company and proceedings under Section 138 of the Negotiable Instrument Act was not applied with, the complaint under Section 138 was quashed by the Supreme Court. It is submitted by the learned Counsel for the appellant that in view of the decision in Himanshu, the decision of a Coordinate Bench of this Court in Gena Marketing Pvt. Ltd. (supra) is no longer a good law. 12. It is further submitted by the learned Counsel for the respondent placing reliance of Yogendra Pratap Singh vs Savitri Pandey & Anr. reported in (2014) 10 SCC 713. It is submitted by the learned Advocate for the respondents that an offence under Section 138 of the Negotiable Instrument Act cannot be said to have been committed when the period provided in Clause (c) of the proviso to Section 138 has not expired. A bare reading of clause (c) of the proviso makes it clear that no complaint can be filed for an offence un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in the case of K. Vaskaran (Supra). The Division Bench of the Orissa High Court rejected such contention holding, inter alia, that such submission was wholly untenable in law and cannot be accepted at all in the reason that notice must be served upon the addressee as per the mandatory requirement to constitute an offence under Section 138 of the Negotiable Instrument Act. Merely because of an endorsement on the unserved cover containing the noting that "the addressee was absent and the notice was returned unserved" cannot be a ground to constitute that there is a deemed service of notice upon the petitioner. 15. It is further submitted by the learned Advocate for the respondents that in respect of a penal provision, before a penalty can be levied, the procedures laid down therein must be complied with. For construction of a penal provision, it is trite, the golden rule of literal interpretation should be applied. The difficulty which may be faced by the complainant is of no consequence. In support of his contention learned Counsel for the respondents refers to the following decisions:- (i) Commissioner, Central Excise and Customs Mumbai & Ors vs. ITC Ltd & Ors. reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: 22 [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.- For the purposes of this section,- (a) "company" means any body corporate and includes a firm or other association of individuals; and (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt it appears that in the postal receipt the name of the respondent/company was typed as Basukinath F Pero Ltd, Topsia Road, KOL-700046. It is needless to mention that postal receipt is not the document to ascertain whether the notice was served in the correct address of the respondent No.1/company or not. It is the postal envelope on which the address of respondent No.1/company is recorded is the relevant document to ascertain the fact as to whether notice was duly sent in the proper address of the respondent No.1/company or not. Nowhere it is urged by the respondents that the registered envelope contained wrong name and address of respondent No.1/company. From the postal track report it is ascertained that the notice sent in the name of respondent/company was duly served upon the respondent. In such view of the matter the learned Magistrate ought not to have held that no notice was served upon the respondent No.1/company. It is contended on behalf of the appellant that a copy of demand notice was also sent to the accused No.2 under registered speed post with acknowledgement. The accused No.2 duly received the said notice. However, during trial the copy of the said notice and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantially the same rules. 'All modern Acts are framed with regard to equitable as well as legal principles.' 'A hundred years ago,' said the court in Lyons' case, 'statutes were required to be perfectly precise and resort was not had to a reasonable construction of the Act, and thereby criminals were often allowed to escape. This is not the present mode of construing Acts of Parliament. They are construed now with reference to the true meaning and real intention of the legislature." At p. 532 of the same book, observations of Sedgwick are quoted as under: "The more correct version of the doctrine appears to be that statutes of this class are to be fairly construed and faithfully applied according to the intent of the legislature, without unwarrantable severity on the one hand or unjustifiable lenity on the other, in cases of doubt the courts inclining to mercy." 25. Hon'ble Supreme Court further held that even in interpretation of penal statutes the mischief Rule or Heydon's Rule may be resorted to:- "36. The rule of interpretation requiring strict construction of penal statutes does not warrant a narrow and pedantic construction of a provision so as to leave loopholes for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the High Court committed error in recording a finding that there was no notice to the drawer of the cheque, as required under Section 138 of the Negotiable Instruments Act. In our opinion, after the cheques were dischonoured by the bank the payee had served due notice and yet there was failure on the part of the accused to pay the money, who had signed the cheques, as the Director of the company." 27. It is humbly recorded that in the case of Himanshu (supra), Bilakchand Gayachand (supra) and Rajneesh Aggarwal (supra) were not considered. In Himanshu the Hon'ble Supreme Court followed the ratio laid down in Aneeta Hada vs. Godfather Travel & Tours Pvt. Ltd : (2012) 5 SCC 661 and Msr. Leathers vs. S. Palaniappan: (2013) 1 SCC 177. In Aneeta Hada the Apex Court was pleased to consider the question as to whether prosecution of a director could be maintained in the absence of prosecution of the accused/company. The Apex Court held that the prosecution of an accused/company was sine qua non for prosecution of a director save and except where prosecution of the company is a legal impossibility. 28. In the instant appeal, however, it is not the question to be decided as to whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt the law of presumption under Section 27 of the General Clauses Act coupled with the principle laid down in K. Bhaskaran (supra) by the Hon'ble Supreme Court. 30. In fine, this court on due consideration of the materials on record, submission made by the learned Counsels for the appellant and the respondents and on careful perusal of the relevant statute as well as the pronouncement of the Apex Court and the High Court finds that the learned Magistrate committed error in holding that no notice was served upon the accused No.1/company for the reason that the name of the accused No.1/company and its address was recorded in the postal receipt issued by the post office to the sender of the notice. The postal receipt (Exhibit-5/1) only proves that a notice was sent under registered speed post with AD. The question as to whether it was sent to the accused/company or that it was served or not in correct address is a question of fact to be determined from the copy of the notice and the postal track report. The copy of the notice, it is recorded hereinabove contains correct address of the accused No.1/company. The postal track report shows that it was duly served upon the accused/company ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
