IN THE HIGH COURT OF KERALA
P.D. RAJAN, J.
VARGHESE ANDREWS - Appellant
Versus
STATE OF KERALA - Respondent
Crl. Rev. Pet. No. 1153 of 2003
Decided on : 01-12-2015
Negotiable Instruments Act 1881 - Section 138 - Dishonor of Cheque - Insufficient funds - Statutory notice - Obligation of - Mode of Service - Requirement of - Held, payee has to make a demand by giving a notice in writing, if that requirement was complied and there is failure of the drawer to pay the cheque amount within 30 days (earlier 15 days) from the date of such notice, he can launch prosecution against the drawer - Since no mode of service of demand notice has been prescribed under the Act, it is necessary to produce relevant proof with regard to despatch and service of notice. Moreover the benefit of S.27 of the General Clauses Act 1987 may not be available to the complainant when there is no proof with regard to demand notice. The presumption of service under the statute would arise only when it is sent by registered post in terms of S.27 of the General Clauses Act - Hence Service of notice mandatory
P.D. RAJAN, J.
1. The revision petitioners were accused in C.C.702/92 on the file of the Chief Judicial Magistrate, Kottayam for offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the N.I. Act). The complainant's case in the trial court was that, accused 1 and 2, who are the proprietors of a business firm namely Friends Banana Marts, at Municipal Vegetable Market, Kottayam, borrowed a sum of Rs. 31,000/- from the complainant and in discharge of that debt, they issued a cheque for Rs. 16,000/- (Ext.P2) and another cheque for Rs. 15,000/- (Ext.P3). When those cheques were presented for encashment, they were dishonoured for the reason of funds insufficient. Complainant demanded the amount by giving a notice in writing to the accused. Even after notice, there was no payment. In the circumstance, the above complaint was filed in the trial court.
2. The complainant examined PW1 and PW2 and marked Ext.P1 to P15 as documentary evidence. The incriminating circumstances brought out in evidence were denied by the accused while questioning him under Section 313 Cr.P.C. Accused examined DW1 and DW2 and marked Ext.D1 as his documentary evidence. The learned Magistrate convicted the accused under Section 138 of the N.I. Act and sentenced to pay a fine of Rs. 15,000/-, in default, simple imprisonment for 3 months each. Against that, he preferred Crl. Appeal 140/99 before Sessions Judge (Spl.), Kottayam, which was dismissed by that court. Being aggrieved by that he preferred this revision petition.
3. The learned counsel appearing for the revision petitioner contended that Ext.P2 cheque of Rs. 16,000/- was issued on 1.5.92, Ext.P5 dishonour memo shows that Ext.P2 was dishonoured on 29.05.92. There was no demand for the due amount by giving a notice in writing to the accused and there is non-compliance of Section 138 (b) of N.I. Act. This fact which ought to has been in favour of the accused was not considered by the courts below.
4. I heard the Public Prosecutor, who contended that the findings of the trial court is proper and no interference is necessary.
5. According to Section 138 of the N.I. Act, where any cheque drawn by a person on an account maintained by him with a bank for payment of money to another person from that account, in discharge of any debt or liability, is returned by the bank, either the amount of money in that account is insufficient to honour the cheque or that it exceeds the amount arranged from that account with the bank, such person shall be deemed to have committed an offence under Section 138 of the N.I. Act. This deemed provision is enacted subject to the condition that the cheque has to be presented within the statutory period in which it is drawn or within the period of its validity. Secondly, the payee or holder in due course of the cheque shall make a demand for such amount by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of information from the bank and non-payment of due amount after receipt of notice by the drawer of the cheque.
6. Section 138(b) says 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 thirty days (before amendment, within fifteen days) of the receipt of information by him from the bank regarding the return of the cheque as unpaid. PW1 deposed that he demanded the money by giving Ext.P6 notice dated 12.06.92. Ext.P10 is the acknowledgment card, but postal receipt has not been produced in the trial court to show that he made a demand within the period provided under Section 138 (b) of the N.I. Act. Notice envisaged under Section 138(b) by payee to the drawer of the cheque which has been dishonoured can be sent by post or by fax. The responsibility on the payee on receipt of information from the bank with regard to the return of the cheque unpaid is to make
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