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KERALA HIGH COURT
P.D. Rajan, J.
Ramaraj —Petitioner
versus
Rajesh Kumar —Respondent
Crl. M.C. No.703 of 2012
Decided on 4.4.2014
Counsel for the Parties:
For the Petitioner:B. Pramod, Advocate
For the Respondent: S. Shanavas Khan and Pubic Prosecutor (R. Jithesh).
IMPORTANT POINT
If however in the notice excess amount is demanded, the notice must fail to converge the legal requirement u/s. 138(b) which is bad for a complaint.
Headnote:Negotiable Instruments Act, 1881 — Section 138(b) — Prosecution for dishonour of cheque — Petition for quashing complaint and proceedings on ground that there was no valid notice — Complainant’s case was that petitioner handed over a cheque for Rs.8 lakhs which was returned unpaid for reason “stop payment” — In the statutory notice as sum of Rs.80 lakhs was mentioned as due amount — Notice demanding huge amount than the dishonoured cheque amount would not serve the requirement — Complaint and proceedings were liable to be quashed.
Held: Section 138(b) speaks about giving of a notice demanding the cheque amount. It contemplates about service of notice and payment of cheque amount within a stipulated time. Therefore, it is clear that unless a notice is served u/s.138(b), a complaint is not maintainable. The parliament while enacting such a provision made arrangement for making a demand of the payment of the said amount of money. If there is no demand as stipulated, a complaint is not maintainable. If however in the notice excess amount is demanded, the notice must fail to converge the legal requirement u/s. 138(b) which is bad for a complaint.
In a valid prosecution u/s.138 of the Negotiable Instruments Act, I am of the view that service of notice is imperative for maintaining a complaint. The parliament while enacting Section 138 imposed a condition that, making a demand for payment of the cheque amount by giving a notice in writing is an essential one. Such notice has to be issued within the statutory period. The conditional precedent is to make a demand of the amount of cheque. A notice demanding huge amount than the dishonoured cheque amount would not serve the requirement. In Annexure-III a sum of Rs.80 lakhs was mentioned as due amount but actually borrowed amount is Rs.8 lakh only. Therefore, no demand was made by the 1st respondent as per Section 138(b) of N.I. Act. Unless a notice is given in agreement with 138(b) of the N.I. Act, a complaint would not be maintainable. In the present case, no demand was made for the payment of cheque amount. If trial is proceeded with Annexure-III notice, it amounts to an abuse of the process of Court.
Result: Petition allowed.
P.D. Rajan, J.—This petition is filed under Section 482 Cr.P.C to quash Annexure I complaint in C.C.141 of 2011 of the Chief Judicial Magistrate Court, Alappuzha for offence punishable under Section 138 of N.I.Act by invoking the inherent jurisdiction. Petitioner is the accused in the above case, and the complaint was filed by the first respondent in Chief Judicial Magistrate Court, Alappuzha. Petitioner contended that prima facie case is not made out and hence trial of the petitioner is a mere abuse of the process of court.
2. The first respondent’s case before trial court was that petitioner handed over a cheque dated 25.4.2000 to the 1st respondent for Rs.8 lakhs drawn on IOB Tower Branch, Chennai and when it was presented for encashment through IDBI Bank, Alappuzha, it was dishonoured for the reason “payment stopped”. After getting the dishonour memo, he issued a lawyer notice and after the receipt of lawyer notice, there was no repayment. In the circumstance, he filed Annexure A1 complaint before Chief Judicial Magistrate, Alappuzha. Hence petitioner approached this court with this petition.
3. Learned counsel appearing for the petitioner contended that there is no valid notice as per Section 138 (b) of N.I.Act. When there is no demand for payment of said amount made by giving a notice in writing to the drawer of the cheque, as contemplated under Section 138 (b) of the N.I.Act, no prosecution will lie. If the trial is proceeded, it is a mere abuse of process of court.
4. Before adverting to the rival contention advanced by both counsel, I may refer the relevant statutory provision of S.138 of Negotiable Instruments Act, which reads as under.
“138. Dishonour of cheques 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 provisions of this Act, be punished with imprisonment for (a term which may be extended to two years) 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 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 thirty days) of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice”.
Section 138(b) speaks about giving of a notice demanding the cheque amount. It contemplates about service of notice and payment of cheque amount within a stipulated time. Therefore, it is clear that unless a notice is served u/s.138(b), a complaint is not maintainable. The parliament while enacting such a provision made arrangement for making a demand of the payment of the said amount of money. If there is no demand as stipulated, a complaint is not maintainable. If however in the notice excess amount is demanded, the notice must fail to converge the legal requirement u/s. 138(b) which is bad for a complaint.
5. Apex Court in M/s. Rahul Builders v.
M/s.Arihant Fertilizers & Chemicals & Anr.,
