Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2009 Supreme(SC) 1114

2009(5) Supreme 121
SUPREME COURT OF INDIA
S.B. Sinha and Asok Kumar Ganguly, JJ.
Sivakumar — Appellant
versus
Natarajan — Respondent
Criminal Appeal No. 1077 of 2009
[Arising out of SLP (Crl.) No. 7797 of 2007]
Decided on : 15-05-2009

Advocates appeared:
For the Appellant :S. Mahendran, Advocate.
For the Respondent:B. Balaji, D. Kumaran, Satya Mitra Garg, Advocates.

IMPORTANT POINT
Clause (b) of Section 138 of Negotiable Instruments Act, 1881 mandates that notice should be issued “to the drawer of the cheque within thirty days of the receipt of information.

Headnote:Negotiable Instruments Act, 1881 – Section 138 – Complaint alleging Dishonour of cheque – Conviction of appellant by Trial Court – Appeal –Dismissed – Revision application thereagainst – Dismissed by High Court – Appeal – Both clauses (a) and (b) of proviso appended to Section 138 of the Act employed the term “within a period” – Whereas clause (a) refers to presentation of the cheque to the bank within a period of six months from the date on which it is drawn, clause (b) provides for issuance of notice “to the drawer of the cheque within thirty days of the receipt of information” – Indisputably, notice was issued on 31st day and not within a period of thirty days from date of receipt of intimation from bank – Plea of respondent, that appellant having entered into a settlement in terms whereof he had deposited a sum of Rs. 30,000/- and an assurance having been given that no action would be taken against judgment rendered by the High Court, this Court should not exercise its discretionary jurisdiction under Section 136 of the Constitution of India to interfere with impugned judgment held unsustainable – Since Appellant has a fundamental right of liberty in terms of Article 21 of the Constitution of India – Liberty of the appellant, therefore, could not have been taken away except in accordance with the procedure established by law – Principles of `Estoppel’ or `Waiver’ hence held inapplicable in the instant case – Impugned judgment being unsustainable set aside – Appeal allowed. (Paras 10 to 17)
       Facts of the Case :
        Present appeal has been filed against order of High Court in revision case where conviction of appellant for offence u/s 138 of NI Act, 1881 was confirmed.
       Findings of the Court :
        Both clauses (a) and (b) of proviso appended to Section 138 of the Act employed the term “within a period”. Whereas clause (a) refers to presentation of the cheque to the bank within a period of six months from the date on which it is drawn, clause (b) provides for issuance of notice “to the drawer of the cheque within thirty days of the receipt of information”. Indisputably, notice was issued on 31st day and not within a period of thirty days from date of receipt of intimation from bank. Plea of respondent, that appellant having entered into a settlement in terms whereof he had deposited a sum of Rs. 30,000/- and an assurance having been given that no action would be taken against judgment rendered by the High Court, this Court should not exercise its discretionary jurisdiction under Section 136 of the Constitution of India to interfere with impugned judgment was held unsustainable. Since Appellant had a fundamental right of liberty in terms of Article 21 of the Constitution of India. Liberty of the appellant, therefore, could not have been taken away except in accordance with the procedure established by law. Principles of ‘Estoppel’ or ‘Waiver’ was hence held inapplicable in the instant case. Impugned judgment being unsustainable was set aside.x Appeal allowed.
       Result : Appeal allowed.

JUDGMENT

S.B. Sinha, J.—

1. Leave granted.

2. This appeal is directed against a judgment and order dated 03.02.2007 passed by the Madurai Bench of the Madras High Court in Crl. Revision No. 849 of 2005 whereby and whereunder the Criminal Revision application filed by the appellant herein was dismissed affirming the judgment of the learned Principal Session Judge, Trichrapalli dated 08.11.2005 passed in Crl. A No. 87/2005, preferred against the judgment dated 03.05.2005 in CC No. 69/2004 by the learned Judicial Magistrate III, Tiruchirapalli.

3. On or about 14.08.2003, appellant borrowed a sum of Rs. 1,00,000/- for the purpose of his business as loan from the complainant-respondent. The said amount was to be repaid within a period of three months. On or about 20.11.2003 the appellant handed over a cheque bearing No. 0652756 dated 27.11.2003 for a sum of Rs. 1,00,000/- in favour of the respondent. The said cheque was presented by the complainant for collection to his banker namely UCO Bank, Trichy Main Branch on 27.11.2003. It was dishonoured with the remarks “insufficient funds” on 2.12.2003. Information thereabout was received by the respondent on 3.12.2003.

4. On 02.01.2004, the respondent issued a legal notice to the appellant calling upon him to pay the amount in question within 15 days from the date of the receipt of the notice. Admittedly, the appellant neither sent a reply to the said notice nor paid the amount due.

Respondent thereafter filed a complaint petition against the appellant under Section 138 of the Negotiable Instruments Act, 1881 (for short “the Act”) before the Judicial Magistrate No. III, Tiruchirapalli.

5. The learned Judicial Magistrate III convicted the appellant under Section 138 of the Act and sentenced him to undergo one year’s simple imprisonment and a fine of Rs. 5000/- and in default thereof to undergo further six months of simple imprisonment. He was also directed to pay a sum of Rs. 1,00,000/- as compensation to the respondent under section 357(1) of the Code of Criminal Procedure.

6. Aggrieved thereby and dissatisfied therewith, appellant preferred an appeal before the Principal Session Judge, Tirchirapalli, which was dismissed.

7. Appellant filed a revision application thereagainst before the High Court, which by reason of the impugned judgment has been dismissed. Appellant is, thus, before us.

8. Before proceeding further, we may place on record that subsequent to the passing of the impugned judgment, a settlement has been entered into by and between the appellant and the respondent wherein it has been stated:

“At this juncture, with the consensus of both the parties, on the assurance of the 2nd party, the 2nd party shall receive a sum of Rs. 30,000/- from the 1st party and shall not take any action against the judgment rendered by the court and there shall be no interest over the issue before or after the settlement and as such we both have signed in the presence of the witnesses. 2nd party has also consented to issue a receipt for having received the said amount to the 1st party.”

9. The core question which arises for consideration is as to whether the notice dated 2.01.2004 was issued within the stipulated period of thirty days from the date of receipt of intimation of the dishonour of cheque.

Section 138 of the Act reads as under:

“138. Dishonour of cheque for insufficiency, etc. of funds in the account. – – Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision

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2009 Supreme(SC) 1114

2009(5) Supreme 121SUPREME COURT OF INDIAS.B. Sinha and Asok Kumar Ganguly, JJ.Sivakumar — AppellantversusNatarajan — RespondentCriminal Appeal No. 1077 of 2009[Arising out of SLP (Crl.) No. 7797 of 2007]Decided on : 15-05-2009

IMPORTANT POINT Clause (b) of Section 138 of Negotiable Instruments Act, 1881 mandates that notice should be issued “to the drawer of the cheque within thirty days of the receipt of information.

Cases Referred (1)

2009(5) Supreme 121
SUPREME COURT OF INDIA
S.B. Sinha and Asok Kumar Ganguly, JJ.
Sivakumar — Appellant
versus
Natarajan — Respondent
Criminal Appeal No. 1077 of 2009
[Arising out of SLP (Crl.) No. 7797 of 2007]
Decided on : 15-05-2009

IMPORTANT POINT
Clause (b) of Section 138 of Negotiable Instruments Act, 1881 mandates that notice should be issued “to the drawer of the cheque within thirty days of the receipt of information.