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Andhra Pradesh High Court
K.Muralidhar Rao - Appellant
Versus
State OF A.P. - RESPONDENT
Decided On: 07-30-97
The payee or holder in due course is not required to specifically mention a 15-day time period for payment in the notice issued under Section 138 of the Negotiable Instruments Act.
Headnote:
NEGOTIABLE INSTRUMENTS ACT - SECTION 138 - NOTICE UNDER SECTION 138 - INTERPRETATION - WAITING PERIOD FOR PAYMENT - NO OBLIGATION TO MENTION 15 DAYS TIME IN NOTICE - COMPLAINT FILED WITHIN ONE MONTH AFTER EXPIRY OF 15 DAYS FROM DATE OF RECEIPT OF NOTICE - VALID.
Fact of the Case:
The petitioner issued a cheque for Rs. 50,000 to the complainant as part payment of a loan. The cheque was dishonoured due to insufficient funds. The complainant issued a notice to the petitioner demanding payment within 15 days, but the petitioner failed to pay. The complainant filed a complaint under Sections 138 and 142 of the Negotiable Instruments Act.
Finding of the Court:
The court held that there is no obligation on the part of the payee or the holder in due course to specifically mention demanding to pay the said amount within fifteen days and there is no substance in the contention of the learned Counsel for the petitioner.
Issues: Whether the notice issued by the complainant under Section 138 of the Negotiable Instruments Act was valid, despite not specifically mentioning a 15-day time period for payment.
Ratio Decidendi: The court interpreted Section 138 of the Negotiable Instruments Act and held that the only obligation on the part of the payee or holder in due course is to wait for fifteen days after receipt of the notice by the drawer, giving the drawer an opportunity to pay the amount payable on account of the dishonour of the cheque. The court also held that the complaint was filed within one month after the expiry of fifteen days from the date of receipt of the notice, which is in accordance with the requirements of Section 138.
Final Decision: The court dismissed the petition filed by the petitioner to quash the proceedings against him.
( 1 ) THIS petition is filed under Section 482, Cr. P. C. to quash the proceedings in CC No. 325 of 1997 on the file of the Vth Metropolitan Magistrate, Hyderabad.
( 2 ) THE facts in giving rise to the petition are, briefly, as follows :- The second respondent, M/s. Genius Financial Services Limited, filed complaint against the petitioner for the offences under section 138 and 142 of the Negotiable Instruments Act (for short the act ) alleging that the petitioner approached the complainant for a loan of Rs. 3,00,000. 00 and the same was sanctioned on 17-9-1995 repayable on 17-1-1996. He sought extention of time for repayment of the said loan amount from time to time and ultimately issued a cheques for Rs. 50,000. 00 to discharge part of the liability on 31-12-1996 drawn on Canara Bank, Somajiguda Branch, Hyderabad in favour of the complainant and the same was presented and it was returned from the bank with an endorsement funds insufficient . Then the complainant got issued notice to the petitioner-accused for the dishonour of the cheque and calling upon him to pay the amount. The petitioner received the notice on 17-1-1997. As the petitioner-accused failed to pay the said amount, he filed complaint under the above sections of law.
( 3 ) NOW the petitioner-accused filed this petition to quash the proceedings.
( 4 ) THE learned Counsel for the petitioner urged only one ground before me stating that in the notice issued on 15-1-1997 it is mentioned that the cheque was dishonoured and directed to pay the said amount on or before 25-1-1997 failing which he threatened to proceed legally against him, thus it is clear that the second respondent has not given fifteen days time for payment of the said amount, as provided under clause (c), proviso to Section 138 of the Act, and as the second respondent failed to comply with the mandatory provisions of Section 138 of the Act, the complaint is not maintainable and liable to be quashed.
( 5 ) BUT the learned Counsel for the respondent submitted that the date is mentioned in the notice demanding to pay the amount on or before 25-1-1997, yet he waited for more than fifteen days from the date of receipt of notice by the petitioner herein and as he failed to pay the said amount fifteen days from the date of receipt of notice, as contemplated under Section 138, Proviso (c), and then cause of action arose and he filed the complaint on 1-3-97. He further submitted that the provisions of Section 138 do not contemplate of mentioning specifically in the notice to pay the amount on account of dishonour of the cheque within fifteen days and the drawer of the cheque is entitled to pay the amount within fifteen days and thus there is no substance in the contention of the learned Counsel for the petitioner.
( 6 ) IT is useful to extract Section 138 of the Negotiable Instruments Act to appreciate the contentions of both the parties and reads as follows :-". . . 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 of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both; Provided that nothing contained in this Section shall apply unless; a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; b) the payee or the holder in due course, as the case
