HDFC Bank Ltd. Vs Reena (Himachal Pradesh High Court)
Summary: The Himachal Pradesh High Court, in HDFC Bank Ltd. Vs Reena, dismissed the bank’s application seeking special leave to appeal against the acquittal of the accused in a cheque dishonour case under Section 138 of the Negotiable Instruments Act, 1881. The dispute arose from an agricultural loan of ₹8 lakh and a cheque issued towards repayment of the outstanding liability, which was dishonoured for insufficient funds. The Trial Court had convicted the accused and imposed imprisonment and compensation. However, the Appellate Court reversed the conviction, holding that the complaint had been filed prematurely because the statutory period following service of the demand notice had not expired. Aggrieved by the acquittal, HDFC Bank approached the High Court, contending that the notice dispatched by registered post on 9 August 2019 should be presumed to have been delivered within seven days.
The High Court examined Section 27 of the General Clauses Act, 1897, and the judicial principles governing deemed service of statutory notices. Referring to Subodh S. Salaskar Vs Jayprakash M. Shah and Manoj Kumar Nag Vs State of Jharkhand, the Court observed that, where actual service is not established, a reasonable period of thirty days may be considered for presumed delivery of a notice sent by registered post. The bank had produced no evidence demonstrating that a letter dispatched from Shimla to Theog would necessarily reach the accused within seven days. Consequently, the Court rejected the bank’s proposed date of deemed service. It further relied on Gajanand Burange Vs Laxmi Chand Goyal and Yogendra Pratap Singh Vs Savitri Pandey to emphasise that the drawer must be allowed fifteen days after service of the statutory notice to discharge the cheque liability before a valid complaint can be instituted.
Applying these principles, the High Court held that the complaint filed on 6 September 2019 was premature because the statutory cause of action had not accrued. The Court clarified that a complaint instituted before expiry of the mandatory fifteen-day payment period cannot sustain proceedings under Section 138 merely because the prescribed period expires subsequently. It also distinguished N. Parameswaran Unni Vs G. Kannan, observing that the decision concerned the presumption of service rather than the precise period within which service should be presumed. Finding no legal infirmity in the Appellate Court’s decision, the High Court refused leave to appeal and dismissed the bank’s application and appeal, thereby leaving the accused’s acquittal undisturbed.
Cases Discussed
- Subodh S. Salaskar Vs Jayprakash M. Shah, (2008) 13 SCC 689 (Supreme Court) — Presumption of service of notice within a reasonable period.
- Manoj Kumar Nag Vs State of Jharkhand, 2021 SCC OnLine Jhar 458 (Jharkhand High Court) — Thirty-day deemed-service approach in the absence of evidence of actual service.
- Anil Kumar Goel Vs State of U.P., 2021 SCC OnLine All 410 (Allahabad High Court) — Discussed in connection with premature cheque dishonour complaints.
- N. Parameswaran Unni Vs G. Kannan & Another (Supreme Court) — Distinguished on the question of presumed timing of service.
- Gajanand Burange Vs Laxmi Chand Goyal, 2022 SCC OnLine SC 1711 (Supreme Court) — Premature complaints cannot sustain cognizance.
- Yogendra Pratap Singh Vs Savitri Pandey, (2014) 10 SCC 713 (Supreme Court) — Statutory fifteen-day period must expire before filing.
FULL TEXT OF THE JUDGMENT/ORDER OF HIMACHAL PRADESH HIGH COURT
The applicant has filed the present application for seeking special leave to appeal under Section 419(4) of Bhartiya Nagrik Suraksha Sanhita, 2023 (BNSS) against the judgment dated 14.5.2024., passed by learned Additional Sessions Judge, CBI, Shimla, (learned Appellate Court), vide which the appeal filed the respondent-non/applicant (accused before learned Trial Court) was accepted. (The parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience).
2. Briefly stated, the facts giving rise to the appeal are that the complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act. It was asserted that the complainant is a bank engaged in banking activities. The accused approached the complainant with a request to grant an agricultural loan of 18.00 lacs. The complainant advanced the loan of 18.00 lacs on 27.6.2015 in her favour. The accused executed various loan documents and mortgaged her immovable property in favour of the complainant. The loan was to be repaid in yearly instalments along with interest and other charges. The accused defaulted on the payment of the loan as per the schedule; hence she issued a cheque of 18.00 lacs to discharge her liability. This cheque was drawn on HDFC Bank Ltd. Theog, District Shimla, H.P. The accused had an outstanding liability of t 9,69,364./ – on the date of issuance of the cheque. She assured the complainant that the cheque would be honoured on its presentation. The complainant presented the cheque but it was dishonored with the remarks ‘funds insufficient’. The complainant served a notice upon the accused asking her to pay the amount within 15 days of the receipt of the notice. The notice was sent through registered post (acknowledgment due) to the address furnished by the accused. It was presumed to be delivered to the accused on or before 16.8.2009. The accused failed to pay the amount; hence a complaint was filed for taking action against the accused.
3. Learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to her for the commission of an offence punishable under Section 138 of the Negotiable Instrument Act. The accused pleaded not guilty and claimed to be tried.
4. The complainant examined Dinesh Kumar to prove its case.
5. The accused in her statement recorded under Section 313 Cr. P.C. stated that a loan of 7.00 Lacs was taken by her. She had issued the cheque as security and the complainant misused it. She stated that she wanted to lead defence evidence; however, no defence evidence was led despite opportunity and learned Trial Court closed the evidence of the accused vide order dated 13.12.2023.
6. Learned Trial Court held that the issuance of the cheque was not disputed by the accused in her statement recorded under Section 313 Cr.P.C. The cheque carried a presumption of consideration and the burden was upon the accused to rebut this presumption by providing satisfactory evidence. Even the issuance of a security cheque will not assist the accused when the amount mentioned in the cheque was due on the date of issuance of the cheque. The loan was not time-barred on the date of the issuance of the cheque because the accused had made a part payment towards the loan in March 2018. The cheque was dishonoured due to insufficient funds and the accused failed to pay the amount despite deemed service of notice. Hence, the accused was convicted of the commission of an offence punishable under Section 138 of the NI Act and she was sentenced to undergo simple imprisonment of one year and six months and to pay a compensation of 1i6.00 lacs for the commission of an offence punishable under Section 138 of NI Act.
7. Being aggrieved from the judgment and order passed by the learned Trial Court, the accused filed an appeal which was decided by learned Additional Sessions Judge, CBI Court, Shimla (learned Appellate Court). Learned Appellate Court held that the statement of account shows that an amount of 18.00 lacs was sanctioned on 27.6.2015. The accused admitted the issuance of the cheque. Her version that the cheque was issued towards security would not assist her as she was liable to pay the amount mentioned in the cheque. Even a cheque issued towards the time-barred debt can form the subject matter of the proceedings under Section 138 of the NI Act. The complainant had issued a notice but it was not served. The complainant stated that the notice would be presumed to have been served on or before 16.8.2019, however, as per the judgment of Hon’ble Supreme Court in Subodh S. Salaskar Vs. Jaiprakash M. Shah (2008) 13 SCC 689 as interpreted by Jharkhand High Court in Manoj Kumar Nag Vs. State of Jharkhand, Cr. Revision No. 827 of 2012, decided on 13.7.2021 the notice is presumed to have been served within thirty days. A period of fifteen days has to be granted to the accused to make the payment of the amount. Thus, the cause of action would have accrued on 23.9.2019, however, the complaint was filed on 6.9.2019, and such a complaint was a premature complaint. No action could have been taken on the same. Hence, the appeal filed by the accused was allowed and the complaint was dismissed.
8. Being aggrieved from the judgment passed by the learned Appellate Court, the complainant has filed the present appeal with an application seeking leave to file the appeal. It has been asserted that the judgment passed by the learned Appellate Court is illegal, perverse, bad in law, contrary to the principles of natural justice and the judgment delivered by the Hon’ble Supreme Court of India. The learned Appellate Court erred in holding that the complaint was premature. Section 27 of the General Clauses Act was not properly interpreted. The bank had not received any acknowledgement from the accused and the notice would be deemed to have been served on or before 16.8.2019. There is a presumption under Section 27 of the General Clauses Act regarding the delivery of the notice sent by registered post acknowledgement due. The accused is a resident of Tehsil Theog within District Shimla. The notice was sent to the correct address on 9.8.2019 and would be deemed to be delivered within seven days i.e. on or before 16.8.2019. The accused had failed to rebut the presumption regarding the delivery. The statutory period of 15 days expired on 31.8.2019. The complaint was filed on 6.9.2019 within the limitation. Learned Appellate Court erred in holding that the complaint was premature. Therefore, it was prayed that the present application be allowed and leave to appeal be granted to the complainant/appellant.
9. I have heard Mr. Jitender P. Ranote, learned counsel for the petitioner/complainant who submitted that the learned Appellate Court erred in holding that the notice is deemed to have been served within 3o days from the date of issuance of the notice. The period of service would be seven days considering that the notice was to be served at Theog. If the date of service is taken to be 16.8.2019, the complaint was within limitation and not premature. Learned Appellate Court erred in holding that the complaint was premature. He relied upon the judgment of the Hon’ble Supreme Court in Subodh S. Salaskar Vs. Jaiprakash M. Shah (2008) STPL 16453 SC and N. Parameswaran Unni Vs. G. Kannan and another 2017 STPL 3391 SC in support of his submission.
10. I have given considerable thought to the submissions made at the bar and have gone through the records carefully.
11. The learned Appellate Court had acquitted the accused on the ground that the complaint was premature and thirty days had to be provided for the deemed service of the accused. It was laid down by the Hon’ble Supreme Court in Subodh S. Salaskar v. Jayprakash M. Shah, (2008) 13 SCC 689: (2009) 3 SCC (Cri) 834: 2008 SCC OnLine SC 1174 that where a notice was sent by registered post acknowledge due, the presumption of service of notice can be raised within a reasonable time and it would be deemed to have been served within thirty days from the date of the issuance. It was observed at page 699:
“23. Thirty days ordinarily must be held to be sufficient for service of notice. In fact, when the service of notice is sought to be effected by speed post, ordinarily the service takes place within a few days. Even under Order 5 Rule 9(5) of the Code of Civil Procedure, 1908, a summons is presumed to be served if it does not come back within thirty days. In a situation of this nature, there was no occasion for the Court to hold that service of notice could not be effected within a period of thirty days.”
13. The Jharkhand High Court considered this question in Manoj Kumar Nag v. State of Jharkhand, 2021 SCC OnLine Jhar 458 and held that when there is no evidence regarding the service, the presumption regarding the delivery of the notice can be made after thirty days of the issuance. It was observed:
“22. This Court finds that there is no material on record regarding the service of legal notice dated 03.03.2008 dispatched by registry on 04.03.2008 upon the petitioner and it is not the case of the complainant that the legal notice was returned unserved or returned for any other reason. This court is also of the considered view that presumption regarding service of notice sent through registered cover can be drawn only upon expiry of 3o days from the date of dispatch of notice as has been held by the Hon’ble Supreme Court in the judgment reported in (2008) 13 SCC 689 (Subodh S. Salaskar v. Jayprakash M. Sah). 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 3o 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.”
12. A similar view was taken in Anil Kumar Goel v. State of U.P., 2021 SCC OnLine All 410 wherein it was observed:
13. Coming to the facts of the present case, the notice having been sent on 19.09.2012, if the presumption of service of notice within a reasonable time is raised, shall be deemed to have been served, at best within a period of 30 days from the date of issuance thereof i.e. 19.09.2012. The applicant was required to make payment in terms of the said notice within 15 days thereafter i.e. on or about 3.11.2012. The complaint, therefore, should have been filed by 03.12.12, Admittedly, the complaint was filed on 19.11.2012 and therefore, at this stage, it cannot be said that no proceedings under Section 138 of the Act could be drawn against the applicant.”
14. There is no evidence that a letter sent from Shimla to Theog would reach within a period of seven days as was asserted in the complaint or in the application seeking the leave to appeal. Therefore, the presumption laid down by the Hon’ble Supreme Court of delivery within 3o days has to be applied. Hence, the learned Trial Court had rightly held that the registered notice is deemed to have been served upon the accused within a period of thirty days and if the period of thirty days is taken, the complaint would be premature.
15. It was laid down by the Hon’ble Supreme Court in Gajanand Burange v. Laxmi Chand Goyal, 2022 SCC OnLine SC 1711 that no action can be taken on premature complaint and the same is liable to be dismissed. It was observed:
5. The issue which is raised in this appeal is no longer res Integra and is covered by a three-judge bench decision of this Court in Yogendra Pratap Singh v. Savitri Pandey (2014) 10 SCC Two issues were formulated for decision before the three-judge Bench, which were:
“1.1. (i) Can cognizance of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 be taken on the basis of a complaint filed before the expiry of the period of 15 days stipulated in the notice required to be served upon the drawer of the cheque in terms of Section 138(c) of the Act aforementioned? And,
1.2. (ii) If the answer to Question 1 is in the negative, can the complainant be permitted to present the complaint again notwithstanding the fact that the period of one month stipulated under Section 142(b) for the filing of such a complaint has expired?”
6. The first issue was resolved by paragraph 35 of the judgment, which is extracted below:
“35. Can an offence under Section 138 of the NI Act be said to have been committed when the period provided in clause (c) of the proviso has not expired? Section 2(d) of the Code defines ((complaint”. According to this definition, a complaint means any allegation made orally or in writing to a Magistrate with a view to taking action against a person who has committed an offence. Commission of an offence is a sine qua non for filing a complaint and for taking cognizance of such offence. A bare reading of the provision contained in clause (c) of the proviso makes it clear that no complaint can be filed for an offence under Section 138 of the NI Act unless the period of 15 days has elapsed. Any complaint filed before the expiry of 15 days from the date on which the notice has been served on the drawer/accused is no complaint at all in the eye of the law. It is not the question of prematurity of the complaint where it is filed before the expiry of 15 days from the date on which notice has been served on him, it is no complaint at all under law. As a matter of fact, Section 142 of the NI Act, inter alia, creates a legal bar on the court from taking cognizance of an offence under Section 138 except upon a written complaint. Since a complaint filed under Section 138 of the NI Act before the expiry of 15 days from the date on which the notice has been served on the drawer/accused is no complaint in the eye of the law, obviously, no cognizance of an offence can be taken on the basis of such complaint. Merely because at the time of taking cognizance by the court, the period of 15 days has expired from the date on which notice has been served on the drawer/accused, the court is not clothed with the jurisdiction to take cognizance of an offence under Section 138 on a complaint filed before the expiry of 15 days from the date of receipt of notice by the drawer of the cheque.”
7. In the present case, while the notice was received by the appellant on 8 November 2005, the complaint was filed before the period of fifteen days was complete. The complaint could have been filed only after 23 November 2005 but was filed on 22 November 2005. In view of the legal bar which is created by Section 142 of the NI Act, as explained in the three-judge Bench decision of this Court, taking of cognizance by the Court was contrary to the law and the complaint was not maintainable before the expiry of the period of fifteen days from the date of its receipt by the appellant.
8. The judgment of N. Parameswaran Unni (supra) deals with Section 27 of General Clauses Act and the presumption of service and not with the period when the service is presumed to have been effected; hence, it will not help the applicant.
17. Therefore, there is no infirmity in the reasoning of the learned Appellate Court and the leave to appeal cannot be granted to the complainant.
18. Consequently, the present application fails and the same is dismissed.
19. Since the application seeking leave to appeal is dismissed, hence this appeal is dismissed.
