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2006(1) Bankmann 538
SUPREME COURT OF INDIA
Doraiswamy Raju & Arijit Pasayat, JJ.
K.R. Indira — Appellant
versus
Dr. G. Adinarayana — Respondent
Criminal Appeal No. 1136 of 2003 with Crl. A. No. 1137 of 2001
Decided on 9-10-2003
Counsel for the Parties:
For the Appellant :Ms. Sangeeta Kumar, Advocate.
For the Respondent:Mrs. Lalita Kaushik, Advocate
IMPORTANT POINT
If in a given case the consolidated notice is found to provide sufficient information envisaged by statutory provision and there was a specific demand for payment of sum covered by the cheque dishonoured, mere fact that it was a consolidated notice may not invalidate the same.
Headnote:Negotiable Instruments Act, 1881—Section 138(b)—Dishonour of cheques — Consolidated notice
for two complaints—Validity—If consolidated notice is found to provide sufficient information envisaged by statutory provision and there was specific demand for payment of sum covered by the cheque dishonoured mere fact that it was consolidated notice and/or that further demand in addition to statutorily envisaged demand was also found to have been made, might not invalidate the same—Notice in question in the case was however a demand of the loan amount and not of the cheque amount and it could not be described to be a demand for payment of cheque amount and in addition thereto further demand as well—Conclusion arrived by trial court holding notice invalid and confirmed by High Court called for no interference.
Held: Strong reliance was placed by learned Counsel for the appellants in Suman Sethi’s case (supra), to contend that if the indication in the notice of other amounts than that covered by the cheque issued, does not as held by this Court invalidate the notice, there is no reason as to why a consolidated notice for two complainants cannot be issued. The extreme plea as is sought to be raised in this case based upon Suman Sethi’s case (supra), is clearly untenable. Though no formal notice is prescribed in the provision, the statutory provision indicates in unmistakable terms as to what should be clearly indicated in the notice and what manner of demand it should make. In Suman Sethi’s case (supra), on considering the contents of the notice, it was observed that there was specific demand in respect of the amount covered by the cheque and the fact that certain additional demands incidental to it, in the form of expenses incurred for clearance and notice charges were also made did not vitiate the notice. In a given case if the consolidated notice is found to provide sufficient information envisaged by the statutory provision and there was a specific demand for the payment of the sum covered by the cheque dishonoured, mere fact that it was a consolidated notice, and/or that further demands in addition to the statutorily envisaged demand was also found to have been made may not invalidate the same. This position could not be disputed by learned Counsel for the respondent. However, according to the respondent, the notice in question is not separable in that way and that there was no specific demand made for payment of the amount covered by the cheque. We have perused the contents of the notice. Significantly, not only the cheque amounts were different from the alleged loan amounts but the demand was made not of the cheque amounts but only the loan amount as though it is a demand for the loan amount and not the demand for payment or the cheque amount; nor could it be said that it was a demand for payment of the cheque amount and in addition thereto made further demands as well. What is necessary is making of a demand for the amount covered by the bounced cheque which is conspicuously absent in the notice issued in this case. The notice in question is imperfect in this case not because it had any further or additional claims as well but it did not specifically contain any demand for the payment of the cheque amount, the non-compliance with such a demand only being the incriminating circumstance which exposes the drawer for being proceeded against under Section 138 or the Act. That being the position, the ultimate conclusion arrived at by the Trial Court and the High Court do not call for interference in these appeals, though for different reasons indicated by us. The appeals are, accordingly dismissed. (Para 11)
Result: Appeal dismissed.
Arijit Pasayat, J.—An interesting question, in the background of Clause (b) of the Proviso to Section 138 of the Negotiable Instruments Act, 1881 (in short the ‘Act’) arises in these appeals.
2. Filtering out unnecessary details the background facts are as follows:
Appellant Dr. K.G. Rama-chandra Gupta (in Crl. A. No. 1137/2001) and his wife. Smt. K.R. Indira, (appellant in Crl. A. No. 136/2001) filed complaints alleging that the respondent- Dr. G. Adinarayana, a friend of the appellant- Dr. K.G. Rama-chandra Gupta acted in a manner unbecoming of a friend. In essence, two doctors, were trying to use instruments in fighting out a bitter legal battle and not trying to save a person fighting for life. Three separate complaints were filed alleging that loans were advanced by the appellants to the respondent for which he executed pronotes with a view to ensure repayment of loans with interest. Four cheques were issued, two in the name of the husband and two in the name of the wife. As the cheques bounced when presented for collection with an endorsement ‘not arranged for’, notices were issued calling upon the accused-respondent to pay the cheque amounts within 15 days from the receipt of notices. Though the accused-respondent received the notices, he did not choose to respond and after waiting for the stipulated period of 15 days, complaints were filed by the appellants. The Trial Court came to the conclusion that the complainants failed to prove that the cheques were issued by way of repayment of the loans advanced by the complainants and accepted the contention of the accused that blank cheques given by him in good faith were misused. He further held that the accused has not committed any offence under Section 138 of the Act. Three appeals namely, Criminal Appeal Nos. 270/1996, 271/1996 and 272/1996 were filed by the two appellants. The appeals were disposed of by the impugned common Judgment.
3. One appeal i. e. Criminal Appeal No. 272/1996 was allowed and the respondent was found guilty of offence punishable under Section 138 of the Act. The other two appeals were dismissed and the Order of acquittal was affirmed. The basic conclusion which formed the foundation for upholding the acquittal was that the notices sent did not meet the requirements of law, more particularly, under Clause (b) of Proviso to Section 138 of the Act.
4. It has to be noted that one common notice of demand was sent by both the appellants which was served on the respondent. The High Court held that common notice was not in accordance with law and the essential ingredients to bring in application of Clause (b) of Proviso to Section 138 of the Act were not there. It was held that when separate cheques were allegedly issued, complainants were different and related to allegedly different loan transactions, a common notice is not contemplated.
5. In support of the appeals, learned Counsel for the appellants submitted that the essence of the notice is to be seen and a bare reading of the notice, even though it is consolidated one, shows that the requirements of Clause (b) of Proviso to Section 138 of the Act are met, it is sufficient and both the Trial Court and the High Court have failed to consider this aspect. It was submitted that the substance and not form should have primacy, and if sufficient compliance is there, question of deficiency does not arise.
6. Per contra, learned Counsel for the respondent submitted that the requirements being statutory and mandatory, there is no question of any substantial compliance with the requirement being considered to be sufficient, particularly, when the compliance relates to allegation of an offence being committed. With reference to the notice in question, it was submitted that the same was vague.
7. The only question for consideration by us is whether the notice in question purportedly issued under Clause (b) of Proviso to Section 138 of the Act was valid or not. Section 139 of the Act has also relevance and
