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CHEQUE BOUNS

NON SERVICE OF NOTICE AS THE SIGNATURE IN ACKNOWLEDGEMENT CARD AND CHEQUE ARE DIFFERENT – In the decision reported in Indo Automobiles v. Jai Durga Enterprises (2008 (3) KLT 480 (SC) it was held that: “Once notice has been sent by registered post with acknowledgment due in correct address, it must be presumed that service has been made effective.”

Parts of a cheque based on a UK example drawee...

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 IN THE HIGH COURT OF KERALA AT ERNAKULAM

CRL.A.No. 1973 of 2003()

1. M.J.SABU
 ... Petitioner

 Vs

1. JOSSY VARGHESE
 ... Respondent

 For Petitioner :SRI.JOICE GEORGE

 For Respondent :PUBLIC PROSECUTOR

The Hon'ble MR. Justice M.L.JOSEPH FRANCIS

 Dated :03/01/2011

 O R D E R
 M.L. JOSEPH FRANCIS, J.
 - - - - - - - - - - - - - - - - - - - - - - - - - -
 Crl.A. No. 1973 of 2003
 - - - - - - - - - - - - - - - - - - - - - - - - - -
 Dated this the 3rd day of January, 2010

 JUDGMENT

 This appeal is filed by the complainant in C.C..No. 146 of

2000 on the file of the Judicial First Class Magistrate Court,

Nedumkandom. The first respondent herein was the accused in

that case, which was filed by the complainant alleging

commission of the offence under Section 138 of the N.I. Act.

 2. The case of the appellant/complainant is as follows.

The first respondent/accused borrowed an amount of

Rs.1,50,000/- from the appellant and in discharge of the said

liability, issued a cheque dt.28.11.1999 drawn on Idukki District

Co-operative Bank, Kumili branch for an amount of

Rs.1,50,000/- The appellant presented that cheque for collection

on 28.11.1999 and the same was dishonoured on 31.12.1999

due to insufficiency of funds in the account of the accused. The

Crl.A. No. 1973 of 2003

 2

appellant sent a registered lawyer notice to the accused on 6.1.2000

intimating the dishonour of the cheque and demanding back the

amount, which was received by the accused on 30.1.2000. Even after

receipt of the notice, the accused did not repay any amount. Hence

the complaint.

 3. In the Magistrate Court, on the side of the complainant, PW1

was examined and Exts.P1 to P6 were marked. No evidence was

adduced from the defence side. The learned Magistrate, on considering

the evidence, found that Ext.P1 cheque was issued by the accused in

favour of the complainant in discharge of a legally enforceable debt of

Rs.1,50,000/- and that the cheque was dishonourned due to

insufficiency of funds in the account of the accused. But the was

acquitted under Section 255(1) Cr.P.C. on the ground that the

complainant has failed to prove that notice was served on the accused.

Against that judgment of acquittal the complainant filed this appeal.

 4. Heard learned counsel for the appellant and the learned

counsel for the first respondent.

Crl.A. No. 1973 of 2003

 3

 5. The learned counsel for the appellant raised the following

contentions at the time of argument. The learned counsel submitted

that the learned Magistrate went wrong in holding that there was no

proper notice as contemplated under the N.I. Act as the signature in

the cheque and the acknowledgment card differs. The learned counsel

further stated that the learned Magistrate ought to have seen that

Ext.P4 postal receipt and Ext.P5 acknowledgment card are issued by

the postal authorities and the presumption under Section 139 of the

Act is in favour of the appellant. The accused did not adduce any

evidence to rebut the said presumption.

 6. The learned counsel for the appellant submitted that the

learned Magistrate went wrong in acquitting the accused after having

been found that the accused had issued the cheque in favour of the

appellant for discharge of the liability of an amount of Rs.1,50,000/-

The learned Magistrate ought to have found that the difference in the

signatures in the cheque and the acknowledgment card is not fatal to

the case of the complainant. The learned Magistrate ought to have

Crl.A. No. 1973 of 2003

 4

considered the possibility of putting a different signature on the

acknowledgment card by a crooked man like the accused, who was

trying to evade payment of the amount to the complainant.

 7. The learned Magistrate ought to have found that the Postman,

who is suppose to know the accused in person, delivered the notice to

him and got the acknowledgment card signed and therefore there is no

question of disbelieving the genuineness of Ext.P5 especially when

Ext.P5 postal receipt was produced to corroborate the genuineness of

Ext.P5 acknowledgment. The case of the first respondent is that he

issued the cheque in question to the Goodwill Enterprises, of which the

appellant is a partner and the cheque was entrusted to the firm at the

time of bidding a chitty. For substantiating the defence case, no

evidence was adduced by the accused.

 8. The complainant was examined as PW1. He deposed that the

accused borrowed an amount of Rs.1,50,000/- from him and in

discharge of that liability, the accused executed Ext.P1 cheque on

28.11.1999. When PW1 presented that cheque for encashment, it was

Crl.A. No. 1973 of 2003

 5

dishonoured due to insufficiency of funds in the account of the

accused. Ext.P2 is the dishonour memo. PW1 sent a lawyer notice

to the accused intimating the dishonour of the cheque and demanding

back the amount. Ext.P3 is the copy of the lawyer notice, Ext.P4 is

the postal receipt and Ext.P5 is the postal acknowledgment signed by

the accused. PW1 deposed that inspite of the lawyer notice the

accused did not give back any amount. The accused has no case that

the address shown in the lawyer notice and the acknowledgment is not

correct. The accused has not gone to the witness box to dispute the

signature in Ext.P5 postal acknowledgment. The accused has no case

that there was sufficient amount in his account to honour Ext.P1

cheque.

 9. In the decision reported in Indo Automobiles v. Jai Durga

Enterprises (2008 (3) KLT 480 (SC) it was held that:

 "Once notice has been sent by registered post with

 acknowledgment due in correct address, it must be

 presumed that service has been made effective."

Crl.A. No. 1973 of 2003

 6

 10. In the decision reported in Alavi Haji v. Muhammed

(2007 (3) KLT 77 (SC) it was held that:

 " A person who does not pay within 15 days of

 receipt of summons from court along with copy of

 complaint, cannot obviously contend that there was no

 proper service of notice as required under S.138, by

 ignoring statutory presumption to the contrary under S.27

 of General Clauses Act and S.114 of Evidence Act."

 11. Since lawyer notice was sent in the correct address, it has to

be presumed that there was sufficient notice to the accused. Since the

complainant has proved all the essential elements of the offence under

Section 138 of the N.I. Act, the learned Magistrate is not justified in

acquitting the accused. As the accused committed the offence under

Section 138 of the Act he is convicted for that offence.

 12. In the decision reported in Damodar S. Prabhu v.

Sayed Babalal H (2010(2) KHC 428 (SC)), it was held that in a

Crl.A. No. 1973 of 2003

 7

case of dishonour of cheques, compensatory aspect of the remedy

should be given priority over the punitive aspect. Considering the

facts and circumstances of the case, I am of the view that

sentencing the accused to pay a fine of Rs.1,50,000/- would meet

the ends of justice.

 13. Accordingly this appeal is allowed. The judgment of

acquittal in C.C.No. 146 of 2000 on the file of the Judicial First

Class Magistrate, Nedumkandom is set aside and the accused is

found guilty and convicted under Section 138 of the N.I. Act and

he is sentenced to pay a fine of Rs.1,50,000/- The said fine shall

be paid to the appellant as compensation under Section 357(1) of

Cr.P.C. The accused is permitted either to deposit the fine amount

before the court below or directly pay the compensation to the

appellant within three months from today and produce a memo to

that effect before the court below in case of direct payment. If the

accused fails to deposit or pay the said amount within the aforesaid

Crl.A. No. 1973 of 2003

 8

period, he shall suffer S.I. for a period of three months by way of

default sentence.

 (M.L. JOSEPH FRANCIS)
 Judge
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