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High Court Of Kerala
M.N. KRISHNAN
Aramughan - Appellant
Versus
Sudheesh Kumar - Respondent
Crl. M.C. No.3155 of 2006
Decided On : 02/11/2009
For the Petitioner:R. Sudhish, M. Manju, Advocates. For the Respondent:K.P. Sudheer, Advocate, Amjad Ali, Public Prosecutor.
Noncompliance with the demand notice requirement under S.138(b) of the Negotiable Instruments Act renders the complaint not maintainable.
Headnote:
S.138 of the Negotiable Instruments Act - Demand Notice - Statutory Noncompliance
Fact of the Case:
The accused issued a cheque for Rs. 2,00,000 which was returned due to insufficiency of funds. The petitioner argued that the proceedings were vitiated due to noncompliance with S.138(b) of the Negotiable Instruments Act.
Finding of the Court:
The court found that the notice issued did not comply with the statutory requirement of making a demand for payment of the amount, as it only informed about the dishonour of the cheque. Citing the decision in Rahul Builders v. Arihant Fertilizers & Chemicals, the court held that noncompliance with the demand notice rendered the complaint not maintainable.
Issues: Noncompliance with S.138(b) of the Negotiable Instruments Act, maintainability of the complaint
Ratio Decidendi: Noncompliance with the demand notice requirement under S.138(b) of the Negotiable Instruments Act renders the complaint not maintainable.
Final Decision: The court quashed the proceedings before the Judicial First Class Magistrate Court in S.T.No. 853/2006 under S.482 of the Crl.P.C. due to noncompliance with the demand notice requirement.
This petition is filed to quash Annexure A-3 complaint in the interest of justice. The prosecution under S. 138 of the Negotiable Instruments Act alleging that the accused in discharge of the liability had issued a cheque for Rs. 2,00,000/- which when presented for encashment returned with an endorsement of insufficiency of funds and that the amount has not been paid and so the prosecution.
2. The learned counsel for the petitioner contends that the whole proceedings is vitiated on account of the statutory noncompliance contemplated under S.138(b) of the Negotiable Instruments Act. Under S.138(b) of the Negotiable Instruments Act held that:
"the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid".
So the underlining argument is that the Statute commands a demand for payment of the amount. I had perused the notice issued which is marked as Annexure A2. A reading of the said lawyer notice would show that just an intimation has been given to the effect that the cheque for Rs. 2,00,000/-which when presented has been dishonoured for want of funds. It is further stated that "my client, Sri.N.C. Sudheesh Kumar has instructed me to issue this notice to inform you of the fact". So what is sought to be conveyed is only regarding the dishonour of the cheque. So there is absolutely statutory noncompliance. This position has been considered by the Apex Court in the decision reported in Rahul Builders v. Arihant Fertilizers & Chemicals (2007 (4) KLT 977 (SC)) wherein the Apex Court held that:
"Service of a notice, it is trite, is imperative in character for maintaining a complaint. It creates a legal fiction. Operation of S.138 of the Act is limited by the proviso. When the proviso applies, the main section would not. Unless a notice is served in conformity with proviso (b) appended to S.138 of the Act, the complaint petition would not be maintainable".
In the light of this pronouncement, it is explicitly clear that there is noncompliance of the statutory mandate and a complaint is not maintainable and therefore it is liable to be quashed.
Therefore under S.482 of the Crl.P.C., the proceedings before the Judicial First Class Magistrate Court in S.T.No. 853/2006 is quashed.
