1998(1) ALL MR (JOURNAL) 15
IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH AT HYDERABAD

T. RANGA RAO, J.

K. Murlidhar Rao Vs. State Of Andhra Pradesh And Anr.

Cri.A.No.2181 of 1997

30th July, 1997

Petitioner Counsel: Mr. P. RAMACHANDRAN
Respondent Counsel: Public Prosecutor, Mr. V. PADMANABHAN

Negotiable Instruments Act (1881) Ss.138 and 142 - Dishonour of cheque - Payee issuing notice demanding payment of amount giving less than 15 day's time - Prosecution cannot be questioned on the said ground, when the complaint is filed only after expiry of 15 days and within one month thereafter.

Section 138 does not contemplate of issuing demand notice mentioning fifteen days time for the drawer to pay the amount and the only obligation is that the payee or holder in due course has to wait for fifteen days after receipt of the notice by the drawer giving opportunity to pay the said amount to him payable on account of the dishonour of the cheque. Therefore, on considering the provisions of Section 138 to Section 142 of the Act, I have no hesitation in holding that there is no obligation on the part of the payee or the holder in due course to specifically mention demanding to pay the said amount within fifteen days and there is no substance in the contention of the learned Counsel for the petitioner.

Therefore, in the light of the foregoing discussion, it emerges that it cannot be said that the payee demanding the drawer to pay the amount within fifteen days, by itself is not a ground to quash the proceedings particularly when the complaint was filed within one month after expiry of fifteen days from the date of receipt of notice. [Para 7,8]

Cases Cited:
1995 (1) All India Cri.L.R. 148 [Para 7]


JUDGMENT

JUDGMENT : This petition is filed under Section 482 Cr.P.C. to quash the proceedings in C.C.No.325 of 1997 on the file of V. Metropolitan Magistrate, Hyderabad.

2. The facts in giving rise to the filing of this petition are, briefly, as follows:-

3. The second respondent, M/s. Genius Financial Services Limited, filed complaint against the petitioner for the offences under Sections 138 and 142 of the Negotiable Instruments Act (for short the 'Act') alleging that the petitioner approached the complainant for a loan of Rs.3,00,000/- and the same was sanctioned on 17-9-1995 repayable on 17-1-1996. He sought extension of time for repayment of the said loan amount from time to time and ultimately issued a cheque for Rs.50,000/- to discharge part of the liability on 31-12-1996 drawn on Canara Bank, Somajiguda Branch, Hyderabad in favour of the complainant and the same was presented and it was returned from the bank with an endorsement 'funds insufficient'. Then the complainant got issued notice to the petitioner-accused for the dishonour of the cheque and calling upon him to pay the amount. The petitioner received the notice on 17-1-1997. As the petitioner-accused failed to pay the said amount, he filed complaint under the above sections of law.

4. Now the petitioner-accused filed this petition to quash the proceedings.

5. The learned Counsel for the petitioner urged only one ground before me stating that in the notice issued on 15-1-1997 it is mentioned that the cheque was dishonoured and directed to pay the said amount on or before 25-1-1997 failing which he threatened to proceed legally against him, thus it is clear that the second respondent has not given fifteen days time for payment of the said amount, as provided under Clause (c) proviso to Section 138 of the Act, and as the second respondent failed to comply with the mandatory provisions of Section 138 of the Act, the complaint is not maintainable and liable to be quashed.

6. But the learned Counsel for the respondent submitted that the date is mentioned in the notice demanding to pay the amount on or before 25-1-1997, yet he waited for more than fifteen days from the date of receipt of notice by the petitioner herein and as he failed to pay the said amount within fifteen days from the date of receipt of notice, as contemplated under Section 138 proviso (c), and then cause of action arose and he filed the complaint on 1-3-1997. He further submitted that the provisions of Section 138 do not contemplate of mentioning specifically in the notice to pay the amount on account of dishonour of the cheque within fifteen days and the drawer of the cheque is entitled to pay the amount within fifteen days and thus there is no substance in the contention of the learned Counsel for the petitioner.

7. It is useful to extract Section 138 of the Negotiable Instruments Act to appreciate the contentions of both the parties, and reads as follows:

"....Whether 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 provision of this Act, be punished with imprisonment for a term which may extend to one year, 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, 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; 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.

Explanation:-x x x x x ....."

Therefore, it is clear from the perusal of the above provision, the ingredients required to attract Section 138 of the Act are:

(i) the drawer must have issued a cheque in favour of the payee;

(ii) the cheque should have been presented to the bank by the payee or the holder in due course within six months or within the period of its validity, whichever is earlier;

(iii) that cheque was returned unpaid on account of insufficiency of funds or it exceeds the amount arranged to be paid in that account.

(iv) the payee or holder in due course must issue a notice within fifteen days from the date of receipt of information from the bank;

(v) the drawer had failed to make payment within fifteen days from the date of receipt of the notice and then the payee or holder in due course can file complaint within one month thereafter.

Thus it is clear that Section 138 does not contemplate of issuing demand notice mentioning fifteen days time for the drawer to pay the amount and the only obligation is that the payee or holder in due course has to wait for fifteen days after receipt of the notice by the drawer giving opportunity to pay the said amount to him payable on account of the dishonour of the cheque. Therefore, on considering the provisions of Section 138 to Section 142 of the Act, I have no hesitation in holding that there is no obligation on the part of the payee or the holder in due course to specifically mention demanding to pay the said amount within fifteen days and there is no substance in the contention of the learned Counsel for the petitioner. The same view was taken by Karnataka High Court in a decision Samant Vs. M/s. K.G.N. Traders, 1995(1) All India Criminal Law Reporter 148.

8. Therefore, in the light of the foregoing discussion, it emerges that it cannot be said that the payee demanding the drawer to pay the amount within fifteen days, by itself is not a ground to quash the proceedings particularly when the complaint was filed within one month after expiry of fifteen days from the date of receipt of notice.

9. There is no merit in the petition. The petition fails and is accordingly dismissed.

Petition dismissed