2006(2) Bankmann 26
ANDHRA PRADESH HIGH COURT
P. Lakshmana Reddy, J.
M. Chandrashekar Rao — Appellant
versus
V. Kutumba Rao and
another — Respondents
Criminal Appeal No. 1152 of 2004
Decided 27-10-2005

IMPORTANT POINT
Where acquittal based on benefit of doubt is reversed for dishonour of cheque, in awarding sentence, ends of justice will be met if only compensation is granted.
JUDGMENT

Headnote:(i) Negotiable Instruments Act, 1881—Section 138—Dishonour of cheque—Five post-dated cheques, including one dated 10-9-1999 presented on 8-9-1999—Dishonoured for insufficient funds even to honour any one of them—Complaint after notice of demand—Acquittal on ground that notice was not according to law and complainant failed to prove the guilt—Whether correct? (No)—2000(2) SCC 380 referred.

       Held: It is clear that the object of the notice is to enable the drawer to comply with the amounts covered under the cheque in order to escape from the clutches of Section 138 of the Act and, therefrom, the drawer must be in a position to know the actual demand covered under each cheque in the event of the consolidated notice issued in respect of several cheques. Here in the instant case, as seen from Ex. P-7 the complainant specified the demand in respect of each cheque separately and also mentioned the dates of each cheque and its presentation. Therefore, there was no difficulty for the accused to know the demand under each cheque in order to comply the same to avoid prosecution under Section 138 of the Negotiable Instruments Act. Merely because the dishounour of one of the five cheques Ex. P-5 by the bank was not a valid dishonour for the reason of being premature, it cannot be said that the accused is not liable to comply with the demand in respect of other four cheques Exs. P-l to P-4 though the amounts covered under those dishonoured cheques were separately mentioned. If the accused had made payments covered under Exs. P-1 to P-4 ignoring the amount covered under Ex. P-5, the accused would have been absolved from the prosecution under Section 138 of the Negotiable Instruments Act. Merely because the additional amount i.e. the amount covered under Ex. P-5 is also demanded under the same notice, it cannot be said that the demand notice in respect of Exs.P-l to P-4 cheques also is invalid for that reason. The Apex Court in Suman Sethi’s case (supra) held that in a notice if any other sum is indicated in addition to the amount covered by the cheque, that does not invalidate the notice. So, here in the instant case the amount covered under Ex. P-5 is separate and additional demand in addition to the amounts covered under cheques Ex. P-1 to P-4. The learned counsel submitted that in the cited Apex Court’s judgment the amounts were not covered under the cheque and the said amount was in respect of the compensation, costs, and interest etc. whereas in the instant case, the additional amount is also covered under another cheque and, therefore, the decision of Suman Sethi’s Case (supra) is not applicable to the facts of the case. As already observed supra Ex. P-5 cannot be called as a cheque on 8-9-1999 as it is dated 10-9-1999 and that it is only a bill of exchange till 10-9-1999. Further, it does not make any difference whether it is an amount covered under improperly dishonoured cheque or any amount claimed as compensation, interest, costs etc. In fact, the complainant is entitled to file four separate complaints also one in respect of each dishonoured cheque on the basis of the same legal notice. In order to avoid multiplicity he filed common complaint in respect of all the dishonoured cheques. Had the five separate complaints been filed, can it be said that the prosecution in respect of four complaints based on Exs, P-l to P-4 shall fail for the reason that the prosecution in respect of Ex.P-5 cheque is not maintainable. As all the five cheques are of different dates for different amounts and the notice Ex. P7 contained demand amounts separately under each cheque, I am unable to agree with the contention of the learned counsel for the respondent-accused. In my considered view, the findings recorded by the lower Court are not sustainable. Thus, these points are held accordingly. (Para 14)

       (ii) Negotiable Instruments Act, 1881—Section 138—Appeal against acquittal accepted—Acquittal reversed—Question of sentence—Only compensation.

       Held: Regarding the sentence for the offence punishable under Section 138 of the Negotiable Instruments Act, the prescribed punishment is with imprisonment for a term, which may extend to two years or with fine, which may extend to twice the amount of the cheque, or with both. In the instant case, the cheque amount covered under Exs. P-1 to P-4 is Rs. 1,50,300/-. It is in the evidence that the accused is a lecturer. Considering the facts of this case and the status of the accused, I am of the considered view that the sentence of fine in the form of compensation to a tune of Rs. 2,00,000/- would meet the ends of justice. In the result, the appeal is allowed and the order of acquittal is set aside and the 1st respondent-accused is found guilty of the offence punishable under Section 138 of the Negotiable Instruments Act and he is convicted and sentenced to pay compensation of Rs. 2,00,000/- (Rupees two lakhs only) to the appellant-complainant within a period of three months from this day, failing which the Magistrate concerned shall take necessary steps for realisation of the said amount, in accordance with law. (Paras 16 & 17)

       Result: Appeal allowed.