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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
Tirumala Devi Eada, J
Amara Raja Energy & Mobility Limited – Appellant
Versus
Raunak Bhadani – Respondent
CRIMINAL APPEAL No.36 of 2014
For the Appellants/Petitioners: G. Shashank Rao, P.V. Aruna Kumari
For the Respondents: Rohan Aloor, A. Giridhar Rao
A notice issued under Section 138(b) of the Negotiable Instruments Act must demand the exact amount specified in the dishonoured cheque; any discrepancy between the notice amount and the cheque amount invalidates the statutory notice, rendering the complaint legally unsustainable.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Dishonour of cheque - Notice under Proviso (b) - Mandatory requirement - Discrepancy between amount mentioned in cheque and amount demanded in statutory notice - Held, notice must mention the exact amount of the cheque - Any deviation renders the notice invalid and the proceedings vitiated. (Paras 13, 14, 15)
(B) Negotiable Instruments Act, 1881 - Section 138 - Maintainability of complaint - Non-joinder of partnership firm - Held, where partners are arrayed as accused, a complaint against the firm is maintainable as liability of partners is joint and several. (Para 10)
(C) Negotiable Instruments Act, 1881 - Section 138 - Security cheques - Held, cheques issued as security which mature for payment upon a debt becoming due constitute a legally enforceable debt. (Para 12)
Facts of the case:
The appellant company supplied goods to the respondent’s firm and received four cheques towards payment. The cheques were dishonoured due to 'payment stopped by the drawer'. The appellant issued a statutory notice claiming an amount of Rs. 9,12,244.48, whereas the actual total of the cheques presented was Rs. 9,62,423. The trial court acquitted the accused citing lack of jurisdiction, non-joinder of the firm, and failure to prove a legally enforceable debt.
Findings of Court:
The Court held that the trial court had jurisdiction as the case preceded the 2015 amendment and the complaint was maintainable despite the firm not being arrayed as an accused. Additionally, security cheques act as valid debt instruments upon maturity. However, the appeal was dismissed due to the fatal discrepancy between the amount demanded in the statutory notice and the cheque amounts presented.
Issues: Whether the notice under Section 138 was valid given the discrepancy in amounts, and whether the complaint was maintainable without the firm being named as a party.
Ratio Decidendi: In order to sustain a conviction under Section 138, the notice issued under Proviso (b) must strictly quantify the debt as identified in the cheque; an omnibus or inconsistent amount renders the notice invalid.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. summary of events leading to cheque dishonour and legal proceedings. (Para 1 , 2 , 7) |
| 2. parties' arguments regarding jurisdiction, maintainability, and debt enforceability. (Para 3 , 4 , 5) |
| 3. court deliberation on territorial jurisdiction and impleadment of partnership firms. (Para 8 , 9 , 10) |
| 4. application of section 138 regarding security cheques and legally enforceable debt. (Para 11 , 12) |
| 5. invalidity of statutory notice due to discrepancy between cheque and notice amounts. (Para 13 , 14 , 15 , 16) |
JUDGMENT:
This Criminal Appeal is filed by the appellant-complainant aggrieved by the judgment dated 08.11.2012 passed in CC No.99 of 2012 by the Special Metropolitan Magistrate Court No.III, Kukatpally at Miyapur.
2. The case of the complainant is that the complainant Company i.e. Amara Raja Energy & Mobility Limited (previously M/s. Amara Raja Batteries Limited) is a Limited Company registered under the Companies Act, 1956 having its registered office at Renigunta-Karkambadi Road, Tirupati and it is in the business of manufacturing and selling industrial and automotive batteries and allied products. M/s. Arihant Enterprises (presently known as Tyre Zone) is a partnership firm, represented by Mr. Raunak Bhadani, is the accused. M/s. Arihant Enterprises company is a Franchisee identified by the complainant Company and was appointed as such on 24.05.2007 as per the Complainant’s Amaron concept of distributing its products on a non-exclusive basis for the purpose of retail sale and service. That, the Franchisee has accepted and agreed to purchase the products from the complainant Company for sale in retail and also availed other services. Pursuant to the same, the complainant Company has supplied the products worth Rs.9,12,244.48 ps., to the accused on various dates, the details of which are mentioned hereunder:
| S. No. | Invoice Date | Invoice No. | Amount involved in Rs. | Balance amount |
|---|---|---|---|---|
| 1. | 30-Jun-09 | KOLDI/000491/09-10 | 94,914.00 | 86,721.48 |
| 2. | 30-Jun-09 | KOLDI/000482/09-10 | 250,099.00 | 2,50,099.00 |
| 3. | 7-Jul-09 | KOLDI/000529/09-10 | 285,024.00 | 2,85,024.00 |
| 4. | 15-Jul-09 | KOLDI/000611/09-10 | 19,546.00 | 19,546.00 |
| 5. | 15-Jul-09 | KOLDI/000609/09-10 | 61,594.00 | 61,594.00 |
| 6. | 15-Jul-09 | KOLDI/000612/09-10 | 209,260.00 | 2,09,260.00 |
| TOTAL | 9,12,244.48 | |||
2.1. Thereafter, the accused had not made the full payment and fell due to pay Rs.9,12,244.48 ps., even after regular reminders. To clear the above said dues, the accused has issued four cheques for the amount of Rs.9,62,423/-, the details of which are as under:
| S. No. | Cheque No. | Cheque Date | Amount in Rs. |
|---|---|---|---|
| 1. | 159593 | 15.07.09 | 2,90,140/- |
| 2. | 159598 | 30.06.09 | 75,812/- |
| 3. | 159592 | 07.07.09 | 2,85,024/- |
| 4. | 159597 | 30.06.09 | 3,11,447/- |
| TOTAL | 9,62,423/- | ||
2.2. It is the case of the complainant Company that they have presented the said cheques in the Bank, they were returned with an endorsement ‘Payment Stopped by Drawer’ on 19.11.2009. Then, the complainant Company has issued a legal notice dated 17.12.2009 and it was returned undelivered on 05.01.2010. A courier dated 17.12.2009 was delivered on 19.12.2009. Thus, a statutory notice was served on the accused, inspite of which, the accused failed to make the payment and hence, he has filed the complaint under Section 138 of the NI Act.
2.3. To prove its case, the complainant company has examined PWs.1 and 2 and marked Exs.P1 to P10. On behalf of the accused, the accused himself is examined as DW.1 and marked Exs.D1 to D4. Considering the oral and documentary evidence and perusing the material available on record, the trial court has acquitted the accused. Aggrieved by the same, the present appeal is preferred by the complainant Company.
3. Heard Sri G. Shashank Rao, learned counsel, representing Ms. P.V. Aruna Kumari, learned counsel on record for the appellant-complainant and, Sri Rohan Aloor, learned counsel representing Sri A. Giridhar Rao learned counsel on record for the respondent No.1.
4. Learned counsel for the appellant-complainant h
