2010 ALL MR (Cri) JOURNAL 220
(ALLAHABAD HIGH COURT)

D.R. AZAD, J.

Kanhaiya Lal & Anr. Vs.State Of U.P. & Anr.

Criminal Revn. No.563 of 2006

16th March, 2010

Petitioner Counsel: N. D. SHUKLA
Respondent Counsel: RAHUL CHAUDHARY

Negotiable Instruments Act (1881) S.138 - Dishonour of cheque - Date of service of demand notice - Not mentioned in complaint, or in statement under S.200, Cr.P.C. or in counter affidavit - Even during course of arguments complainant was unable to point out date of service of notice - No offence is made out - Order summoning accused quashed.(Paras 11, 12)

Cases Cited:
M/s. M. R. Traders through proprietor Nand Kumar Bhatia Vs. M/s. Kanhaiya Lal & sons through its Proprietor Kanhiaya Lal, Crl. Complaint Case No.7228/2005, Dt.18.10.2005 [Para PARA1,12,13]
Suman Sethi Vs. Ajai Kumar Churiwal, (2000)II S.C.C. 380 [Para PARA10]


JUDGMENT

-The present criminal revision has been preferred against the judgment and order dated 18.12.2005 passed by the Addl. Chief Metropolitan Magistrate-II Kanpur Nagar in Crl. Complaint Case No.7228 of 2005 (M/s. M.R. Traders through proprietor Nand Kumar Bhatia Vs. M/s. Kanhaiya Lal & sons through its Proprietor Kanhiaya Lal) under section 138 of the Negotiable Instruments Act, Police Station Collectorganj, District Kanpur Nagar, whereby process has been issued against the revisionists to fetch the prosecution.

2. The brief facts of the case is that the Opp. Party No.2 supplied goods to the revisionists for a sum of Rs.1,18,809.20 /- through bill No.15701 dated 4.3.2005 in respect of which revisionists assured to pay the entire amount through cheque. Revisionists issued a cheque No.506252 dated 12.5.2005 of ICICI Bank Ltd. for a sum of Rs.1,18,809.20/-. The said cheque has been dishonoured due to insufficient of funds. Opp. Party No.2 thereafter on 22.8.2005 filed a criminal complaint being case No.7228 of 2005 against the revisionists in the court of Addl. Chief Metropolitan Magistrate-II Kanpur Nagar under Section 138 of Negotiable Instruments Act. The learned Magistrate recorded the statement of the complainant under Section 200, Cr.P.C. on 3.9.2005. The learned Magistrate vide order dated 18.10.2005 issued the process against the revisionists for summon and to face the prosecution under Section 138 of Negotiable Instruments Act, which is impugned in the present criminal revision.

3. I have heard learned counsel for the revisionists, learned counsel for the complainant and learned A.G.A. and also perused the materials available on record.

4. Learned counsel for the revisionists contended that the notice of demand dated 15.7.2005was neither sent by the Opp. Party No.2 to the revisionists nor the same has been served upon the revisionists till date, nor any specific date of service of demand of notice has been mentioned in the complaint by the Opp. Party No.2, as such, the entire criminal proceedings against the revisionists arising out of the said complaint is not maintainable. It is further contended by the learned counsel for the applicant that since the Opp. Party No.2 nowhere in the complaint has mentioned about the specific date of service of his demand notice upon the revisionists thus, the said criminal complaint filed by the Opp. Party No.2 against the revisionists is an abuse of the process of court being not maintainable.

5. It is further argued by the learned counsel for the revisionists that the complaint filed by the Opp. Party No.2 against the revisionists is time barred as the same has not been filed within time as provided under the Act, thus, the same is not maintainable.

6. On the other hand, learned counsel for the Opp. Party and the learned A.G.A. denied that the notice was not served on the revisionists and the complaint is not time barred. They further argued that since the contention raised at the bar by the applicant are factual and relates to the merit of the case, therefore, the prosecution must be allowed to proceed against the applicant.

7. For appreciating the arguments of the learned counsel for the parties, I would like to reproduce Section 138 of the Negotiable Instruments Act, the same is being quoted below :-

"138. Dishonour of cheque for insufficiency, etc., of found 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 arrangement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of the 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 month from the date on which it is drawn or within a 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 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 draw of such cheque fails to make the payment of the said amount of money to thy 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."

8. Thus, for making out an offence under section 138 of the Act following ingredients are essential. In seriatim, they are registered here as: (i) that a person must have an operative account in any bank (ii) he owns some debt or liability to any other person whether juristic/legal, or not (iii) a cheque is issued in the name of that person, to whom the debt or liability is owned by the account holder, from his such operative account in the bank, for the satisfaction of whole or part payment, for the said debt or liability. (Such person who issues the cheque is called "drawer" of the cheque and the person in whose name the cheque is issued is called the "drawee" of the cheque.) (iv) the said cheque is presented by the person in whose name it is issued (drawee) or the holder of the cheque, in bank for it's encashment with the period of it's validity or within six months of the date of it's issuance noted on the cheque (v) the bank had returned the said cheque unpaid or dishonoured or encashed because of 'insufficiency of funds' with what ever terminology used by the bank for said dishonour because of insufficiency of funds in the account from which the cheque had been issued by the drawer (vi) the person in whose name the cheque was issued (drawee) or holder in due course of the said cheque gives a notice, in writing to the person who has issued the cheque (drawer) with a period of thirty days, from the date of receipt of the notice of dishonoured/unpaid cheque from the bank, demanding the payment of the amount of cheque, with or without other prayers for damages or interest thereon (vii) the notice of demand is served on the person who had issued, the cheque (drawer) (viii) the drawer dose not make the payment to the payee or drawee within fifteen days of the receipt of the said notice on him and the amount of cheque remains unpaid (ix) the complaint is laid in court within one month, after expiry of period of fifteen days from the date of service of notice on the drawer/ payer.

9. In the event of absence of any of the above mentioned, necessary requirements, the offence under section 138 of the N.I. Act is not made out. Thus for making out of offence under 138 N.I. Act some necessary dates are very relevant to be mentioned in the complaint or at least they should be clear from the papers filed along with the filing of the complaint itself. These dates are date mentioned on the cheque, date of it's deposit in the bank for encasement (for knowing it's period of validity), the date on which the notice/memo, advice from the bank was received by the drawee/payee or holder of the cheque regarding it's bouncing because of insufficiency of funds by using any phraseology for the same (for determining the period the notice, which is one month, from such a date), the date of notice given by the drawee payee to the drawer/payee of the cheque (to determine fifteenth days so as to bring "course of action" to life, in case the cheque money is not paid during this period), the date on which the said notice is received or served to the drawer/payee of the cheque (to determine the date on which the offence is made out, in case the cheque money is not paid with fifteen days of the service of the notice) and lastly, the date of filing of the complaint (for determining the jurisdiction of the court to entertain the complaint within the prescribed period of limitation and complaint not being time barred). If these dates are not perceptible from the complaint or papers accompanying it then the Magistrate has no jurisdiction to entertain the complaint for offence under Section 138 N.I. Act.

10. In the case of Suman Sethi Vs. Ajai Kumar Churiwal and another, reported in 2000 Vol.II S.C.C. 380, wherein it has been held as follows :-

"It is well settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the said amount i.e. the cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to the said amount there is also a claim by way of interest cost etc. where the notice is bad would depend on the language of the notice. If in a notice while giving the break-up of the claim of the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, the notice might will fail to meet the legal requirement and may be regarded as bad.

This Court had occasion to deal with section 138 of the Act in Central Bank of India Vs. Saxons Forms (1999 ALL MR (Cri) 1854 (S.C.)) and held that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Though in the notice demand for compensation, interest cost etc. is also made the drawer will be absolved from his liability under Section 138 if he makes the payment of the amount covered by the cheque of which he was aware within 15 days from the date of receipt of the notice or before the complaint is filed."

11. After hearing learned counsel for the parties and after going through the record of the case, I find that there is substance in the submission raised by the learned counsel for the revisionists as the fact neither in the complaint nor in the statement under Section 200, Cr.P.C. nor in the counter affidavit, any date of service of notice demanding repayment of cheque money form the applicant is mentioned. Even during the course of argument, the counsel for the respondent-complainant could not point out the date of service and as such, notice. Thus, in the absence of date of service of notice, demanding payment of cheque amount, no offence is made out against the applicant. Moreover, it cannot be said that any such notice was ever served on the revisionists and consequently, 15 days notice period for making the payment of cheque money cannot be counted and unless that is done, no offence is made out against the applicant.

12. Thus, from the discussions made above, since no offence under Section 138 of the Negotiable Instruments Act is made out against the applicant in absence of date of service of notice of demand on him, his summoning order dated 18.10.2005 passed by the Addl. Chief Metropolitan Magistrate-II, Kanpur Nagar in Complaint Case No.7228 of 2005 under Section 138 of Negotiable Instruments Act (M/s. M.R. Traders through proprietor Nand Kumar Bhatia Vs. M/s. Kanhaiya Lal & sons through its Proprietor Kanhiaya Lal) cannot be allowed to stand and, therefore, is being quashed.

13. Consequently, this criminal revision is allowed. The summoning order dated 18.10.2005 passed in Complaint Case No.7228 of 2005 under Section 138 of Negotiable Instruments Act (M/s. M.R. Traders through proprietor Nand Kumar Bhatia Vs. M/s. Kanhaiya Lal & sons through its Proprietor Kanhiaya Lal) is hereby quashed.

Revision allowed.