IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS THURSDAY, THE 9TH DECEMBER 2010 / 18TH AGRAHAYANA 1932 CRL.A.No. 617 of 2002() ----------------------- ST.218/1997 of JUDL. MAGISTRATE OF FIRST CLASS-V, KOZHIKODE .................... APPELLANT(S): COMPLAINANT: -------------------------- P.AHAMMED KOYA, S/O. USMAN, 13/4394, A1 NOUFEEQ, CHAKKIRAKAD PARAMBA, ARAKKINAR P.O., KOZHIKODE. BY ADV. SRI.M.P.MOHAMMED ASLAM RESPONDENT(S): ACCUSED: ----------------------- 1. E.K.GOPALAN, S/O. KANARAN, ELLUKANDI VEEDU, CHERUKAD P.O., KOYILANDI, KOZHIKODE. 2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. ADV. SRI.V.V.SURENDRAN FOR R1 PUBLIC PROSECUTOR THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 01/12/2010, THE COURT ON 09/12/2010 DELIVERED THE FOLLOWING: M.L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - - - - - Crl.A. No. 617 of 2002 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 9th day of December, 2010 JUDGMENT This appeal is filed by the complainant in S.T. No. 218 of 1997 on the file of Judicial First Class Magistrate Court -V, Kozhikode. 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 N.I. Act. 2. The case of the complainant is briefly as follows. The accused owed Rs.1,51,000/- to the complainant and to discharge that liability the accused issued a cheque dt.29.6.1996. When the cheque was presented for collection on 12.8.1996, it was dishonoured for the reason that 'funds insufficient' and on 12.9.1996 it was intimated to the complainant by the bank. On 20.9.1996, the complainant sent a lawyer notice to the accused demanding the amount, Crl.A. No. 617 of 2002 2 which was refused by the accused. Hence the accused had committed the offence under Section 138 of the N.I. Act. 3. In the Magistrate Court, on the side of the complainant Pws.1 to 3 were examined and Exts.P1 to P6 were marked. On the defence side, the accused was examined as DW1. The learned Magistrate, on considering the evidence, found that Ext.P1 cheque was issued by the accused for discharge of a legally enforceable debt and that the cheque was dishonoured for the reason of insufficiency of funds in the account of the accused. But the accused was acquitted under Section 255(1) Cr.P.C. on the ground that no statutory notice was served on the accused as contemplated under Section 138(b) of the N.I. Act. Against that judgment of acquittal, the complainant filed this appeal. 4. Heard the learned counsel for the appellant and the learned counsel for the first respondent. Crl.A. No. 617 of 2002 3 5. The learned counsel for the appellant submitted that the court below ought to have found that the notice was returned unclaimed and not that it was refused for wrong description and that there was proper service of statutory notice as contemplated under clause (b) of Section 138 of the N.I. Act. The learned counsel for the appellant submitted that the complainant has proved all the necessary ingredients of the offence under Section 138 of the N.I. Act and therefore the Court below ought to have convicted and sentenced the accused under Section 138 of the N.I. Act. The learned counsel for the first respondent supported the judgment of the Court below. 6. The complainant was examined as PW1. He deposed that during February, 1995 the accused borrowed Rs.1,51,000/- from him and to discharge that liability a cheque was issued. The said cheque when presented on 12.8.1996 through his bank, it was returned on 12.9.1996 due to the reason that 'funds insufficient'. Crl.A. No. 617 of 2002 4 Eventhough lawyer notice was sent to the accused, it was not received by him and the amount was not paid. Ext.P1 is the cheque issued to the complainant. The memo issued from the Federal Bank is Ext.P2 and the memo issued from the Canara Bank is Ext.P3. The postal cover is Ext.P4 and copy of the notice sent to the accused is Ext.P5. The unserved notice is Ext.P6. During cross examination PW1 deposed that the name of the father of the accused is Kanaran. He knew the accused for the last 15 years. He knew the name of the father of the accused. The accused has asked for Rs.1,60,000/- but he gave only Rs.1,51,000/- There is no reason for not stating the date of payment of the amount in the notice and in the complaint. After the payment of the amount, the accused was missing. He was traced out and there was a mediation talk. After that the cheque was issued. No document was received by him at the time of payment of the amount. Crl.A. No. 617 of 2002 5 7. PW2 is the Postman of Cherukad Post Office. He deposed that eventhough intimation was given to the house of the accused on 21.9.1996 regarding Ext.P6 registered notice, it was not received by the accused. In cross examination PW1 admitted that if the name of the father is changed, the addressee is not expected to receive the same. PW3 is the Post Master of Cherukad Post Office. He deposed that Ext.P6 notice was not returned for want of correct address and that it was kept in the post office for seven days and sent back and that he realised that the father's name shown in Ext.P6 is not correct. The address in Ext.P6 registered notice is 'Shri.E.K. Gopalan, S/o. Kumaran, Ellukandy house, Cherukad P.O.' The postal endorsement on Ext.P6 shows that the intimation was given on 21.9.1996 and it was returned to the sender on 27.9.1996 with the endorsement 'unclaimed'. 8. The accused was examined as DW1. He deposed that he has not borrowed any money from the complainant. He used to Crl.A. No. 617 of 2002 6 arrange finance for the vehicles and he gets commission for the same. He used to issue blank cheques as security. When Ext.P1 cheque was issued, he had signed on it. His father's name is Kanaran and the address shown in Ext.P6 is not that of him. No intimation was also served in his house. 9. In appreciating the evidence on record, the learned Magistrate found that there was nothing to disbelieve the case of the complainant. The learned Magistrate also observed that the accused failed to rebut the presumption under Sections 118 and 139 of the N.I. Act. Since the learned Magistrate arrived at the finding on properly appreciating the evidence on records, I find no reason to interfere with that finding. The accused has no case that there was sufficient fund in his account to encash Ext.P1 cheque. 10. The next question to be considered is whether there was service of statutory notice under Section 138(b) of the N.I. Act. Crl.A. No. 617 of 2002 7 In the decision reported in Ravi v. Ayyappa Roller Four Mills Ltd. (2009 (1) KLT 335), this Court held that to draw the presumption of service of notice on accused, there should be evidence that address in which the notice was sent is the correct address. In the decision reported in C.C. Alavi Haji v. Palapetty Muhammed and another ((2007) 6 SCC 555), it was held that when a notice is sent by registered post and is returned with a postal endorsement “refused” or “not available in the house” or “house locked” or “shop closed” or “addressee not in station”, due service has to be presumed. 11. In the decision reported in South Indian Bank Ltd. v. Union of India (2010 (4) KLT 657) it was held that it is well settled that when a notice sent by registered post is returned 'unclaimed', it could very well be treated as 'valid' and proper notice. Crl.A. No. 617 of 2002 8 12. In the present case, in the address shown in Ext.P6 registered notice, the name of the accused with his initial is given. Whether the name of the father of the accused is Kumaran or Kanaran, the initial of the accused is 'E.K.' as shown in Ext.P6 registered notice. In that address the house name and name of post office are also given. For serving a notice to the addressee, the name of the father is not necessary. The accused has no case that there is another E.K. Gopalan with the same house name in that locality. Since Ext.P6 registered notice is returned back not due to the defect in the address, but due to the failure of the accused to claim that notice and that notice is returned with the endorsement 'not claimed', it can be presumed that there was proper statutory notice under Section 138(b) of the N.I. Act. Since the complainant has proved all the ingredients of the offence under Section 138 of the N.I. Act, the learned Magistrate is not justified in Crl.A. No. 617 of 2002 9 acquitting the accused. As the accused committed the offence under Section 138 of the N.I. Act, he is convicted for that offence. 13. In the decision reported in Damodar S. Prabhu v. Sayed Babalal H (2010(2) KHC 428 (SC)), it was held that in a 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.1,51,000/- would meet the ends of justice. 14. Accordingly this appeal is allowed. The judgment of acquittal in S.T.No. 218 of 1997 on the file of the J.F.C.M. Court - V, Kozhikode under Section 255(1) 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.1,51,000/- 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 Crl.A. No. 617 of 2002 10 amount before the court below or directly pay the compensation to the appellant within four 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 period, he shall suffer S.I. for a period of three months by way of default sentence. (M.L. JOSEPH FRANCIS) Judge tm