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2001 DIGILAW 51 (CAL)

Indian Seamless Financial Services Ltd. v. Shyam Sundar Kejriwal

2001-02-05

Debiprasad Sengupta

body2001
JUDGMENT Debiprasad Sengupta, J. This is an application for quashing of a proceeding being complaint case No. C/1629 of 1996 pending in the court of learned Metropolitan Magistrate 12th Court, Calcutta under section 138/141 of the Negotiable Instruments Act, 1881. 2. The aforesaid proceeding was initiated on the basis of a petition of complaint filed by the complainant/opposite party. The allegations made in the petition of complaint is that the accused petitioner approached the complainant/ opposite party's company for corporate loan and promised to repay the same within a stipulated period and in that perspective issued a cheque bearing No.594544 dated 16.7.96 for Rs. 30 lakhs drawn on Bank of India, Jawaharlal Nehru Road Branch, Calcutta. Before the said cheque was due to be presented for encashment the accused petitioner gave a letter containing some false and frivolous story with the fraudulent intention to cheat the complainant. The complainant thereafter presented the said cheque for encashment within its validity period to their Banker, but the said cheque was dishonoured on 15.7.96 with the remark "payment stopped by the drawer". The complainant served a demand notice upon the accused petitioner on 22.7.96 demanding the payment of the cheque amount being Rs. 30 lakhs within a period of 15 days from the date of receipt of the said notice. Such demand notice was received by the accused petitioner on 23.7.96. But the accused failed to make the payment of the cheque amount within the stipulated period of 15 days. It was further alleged in the petition of complaint that the accused petitioner issued the cheque in discharge of their existing liabilities and the said cheque being presented for encashment was dishonoured by the Bank. So the accused persons have committed an offence under section 138 read with section 141 of the N.I. Act. 3. Mr. Sekhar Bose, learned Advocate appearing for the petitioner submits that the accused petitioner was carrying on transactions with the complainant/opposite party and as such certain cheques were issued to them and the same is the subject matter of a suit pending before this court. 4. Mr. Bose submits that the cheque No. was mentioned in the demand notice as 594544 dated 16.7.96 amounting to Rs. 30 lakhs. But no such cheque, bearing the number as mentioned by the complainant in the demand notice, was issued by the petitioner at any point of time. Mr. 4. Mr. Bose submits that the cheque No. was mentioned in the demand notice as 594544 dated 16.7.96 amounting to Rs. 30 lakhs. But no such cheque, bearing the number as mentioned by the complainant in the demand notice, was issued by the petitioner at any point of time. Mr. Bose further submits that in order to attract the provision of section 138 of the N.I. Act the cheque must be issued by the drawer in discharge of any debt or liability. Further one of the prerequisites of the section is that the payee or holder in due course of the cheque must make a demand for payment of the amount of money by giving a notice in writing to the drawer of the cheque within15 days of the receipt of information from the Bank regarding dishonour of the cheque. On failure to make the payment within 15 days from the date of receipt of the notice the cause of action arises. But, it is submitted by Mr. Bose, the provisions of the section are not attracted when a demand notice in respect of a cheque, which has not been issued by the drawer, is issued demanding the payment of the amount. Since the cheque bearing No. 594544 dated 16.7.96, as mentioned in the demand notice issued by the complainant/O.P. was not issued by the accused petitioner, the same cannot give rise to any cause of action leading to the initiation of the present proceeding. According to Mr. Bose since the cheque, which is the subject matter of the case, is unknown to the petitioner the present proceeding should not be allowed to continue and the same should be quashed. 5. Mr. Sumit Talukdar, learned Advocate appearing for the complainant/opposite party admits at the very out set that the cheque No. was wrongly mentioned as cheque No.594544 in the demand notice. But, according to Mr. Talukdar, only for such a mistake the demand notice should not be treated as defective and the proceeding should not be quashed on that ground. The learned Advocate submits that the purpose of the demand notice is to intimate the drawer of the cheque about the dishonour of the cheque issued by him asking him to make payment of the cheque amount. The learned Advocate submits that the purpose of the demand notice is to intimate the drawer of the cheque about the dishonour of the cheque issued by him asking him to make payment of the cheque amount. The object of demand notice is to give a cnance to the drawer of the cheque to rectify his omission and also to protect the interest of an honest drawer of cheque. So, a demand notice cannot be treated as bad or illegal only because the cheque No. is wrongly mentioned in the said notice. 6. In support of his contention Mr. Talukdar relies on a judgment reported in J.T. 1999(8) SC-58, Central Bank of India vs. M / s. Saxons Farms & Ors. In the said judgment it was held by the Hon'ble Apex Court as follows: "Though, no form of notice is prescribed in the above clause (b) the requirement is that notice shall be given in writing within fifteen days of receipt of information from the bank regarding returen of the cheque as unpaid and in the notice a demand for payment of the amount of the cheque has to be made." In the aforesaid judgment it appears that a proceeding under section 138 of the N.I. Act was quashed by the High Court on the ground that Notice was defective as there was no demand for the payment of the amount of cheque. The Hon'ble Supreme Court after examining the Notice was of the view that the notice was valid as there was a clear demand of the amount as required under section 138 of the N.I. Act. Accordingly the judgment and order of the High. Court was set aside and the trial court below was directed to proceed with the case. 7. Mr. Talukdar next relies on a judgment of the Hon'ble Apex Court reported in J.T. 2000(1) SC 493, Suman Sethi vs. Ajoy K. Churiwal & Anr. In the said judgment it was held by the Hon'ble Apex Court that the words "said amount of money" occurring in clauses (b) and (c) to the proviso to section 138 of the N.J. Act refer to the words "payment of any amount of money" occurring in the main section 138, i.e. the cheque amount. So in the notice demand has to be made for the cheque amount. So in the notice demand has to be made for the cheque amount. The legislature intended that in notice under clause (b) demand has to be made for the cheque amount. It was further held by the Hon'ble Apex Court in the said judgment 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. cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to 'said amount' there is also a claim by way of interest, cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving up break up of the claim 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, notice might well 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 & Anr. vs. M/s. Saxons Farms & Ors., JT 1999 (8) SC 58 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 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 complaint is filed". 8. Relying on the aforesaid two judgments it is submitted by Mr. Talukdar, learned Advocate of the complainant/opposite party that even if the cheque No. is wrongly mentioned in the demand notice, that will not make the demand notice bad or invalid. The question is whether the drawer of the concerned cheque was aware of issuance of such cheque which v as dishonoured by the Bank. Mr. Talukdar points out to the documents which were filed by the complainant alongwith the petition of complaint. The question is whether the drawer of the concerned cheque was aware of issuance of such cheque which v as dishonoured by the Bank. Mr. Talukdar points out to the documents which were filed by the complainant alongwith the petition of complaint. On perusal of those documents, which are correspondences made by the accused company, it appears that the accused was very much aware of the issuance of a cheque dated 16.7.96 amounting Rs.30 lakhs in favour of the complainant and the accused petitioner was liable to make payment of the said amount. 9. Mr. Talukdar further submits that the complaint case is at the stage of evidence and the present revisional application has been preferred only to stall the progress of the case. In such circumstances Mr. Talukdar submits the present revisional application, having no merit in it, should be dismissed and appropriate direction should be given for conclusion of the trial. 10. I have heard the learned Advocates of the respective parties. I have also gone through the documents which are annexed to the revisional application. The only point which is to be decided in the present case is whether the demand notice issued by the complainant, in which a wrong cheque No. was mentioned, can be considered as a valid notice and the proceeding initiated on the basis of such notice should be allowed to continue. There is no doubt that cheque No. 594544 dated 16.7.96 was not issued by the accused petitioner. But at the same time it is also evident from the materials on record that a cheque bearing No.175107 dated 16.7.96 for Rs. 30 lakhs was issued by the accused in favour of the complainant. The said cheque bearing No. 175107 dated 16.7.96 has also been made exhibit (Exhibit 2) in the present case. From the evidence of P.W. 1 Kishan Kr. Kejriwal it appears that he had deposed that the accused person took a loan from them and in discharge of the said liability issued a cheque bearing No. 175107 dated 16.7.96 for Rs. 30 lakhs in favour of Shy am Sundar Kejriwal, i.e., the complainant. The said witness further deposed that the said cheque (Cheque No. 175107) was presented for encashment in the Bank and the same was dishonoured. 30 lakhs in favour of Shy am Sundar Kejriwal, i.e., the complainant. The said witness further deposed that the said cheque (Cheque No. 175107) was presented for encashment in the Bank and the same was dishonoured. It also appears from his evidence that the cheque No. 594544, which has been mentioned in the demand notice, was issued by the complainant in favour of the accused while granting loan of Rs. 30 lakhs. So it is clear that the cheque No. 594544 was mentioned in the demand notice due to mistake. As it has been held by the Hon'ble Apex Court in the case of case of Suman Sethi vs. Ajoy K. Churiwal (supra), a demand notice is to be read as a whole and in the notice a demand has to be made for the "said amount" i.e. the amount mentioned in the cheque which has been dishonoured by the Bank. In the present case the accused was very much aware of the fact that a cheque bearing No. 175107 was issued by him on 16.7.96 amounting Rs. 30 lakhs in favour of the complainant. In fact such issuance of cheque bearing No.175107 dated 16.7.96 has been admitted by the accused in the correspondences made by the accused with the complainant. So it cannot be said that no cheque was issued by the accused in favour of the complainant. In such circumstances the demand notice, although a wrong cheque No. is given in the notice, cannot be said to be bad or illegal. Apart from what has been discussed above, section 138 of the N.I. Act no where requires that the cheque No. is to be mentioned in the demand notice. What section 138 requires is that the payee or holder in due course has to make a demand by giving a notice in writing for the payment of the money mentioned in the cheque which has been dishonoured by the Bank. In the present case since the accused petitioner was very much aware of such dishonour of cheque issued by him, the mentioning of a wrong cheque No. in the demand notice shall not vitiate the proceeding as the accused person, in my considered view is not prejudiced in any way by such mentioning of wrong cheque No. in the demand notice. 11. 11. In view of the discussions made above I am of the view that this is not a fit case for quashing of proceeding .The present application accordingly fails and the same is dismissed. 12. Since this is a very old case of 1996 I direct the learned Magistrate to proceed with the trial and to conclude the same with utmost expedition. 13. The lower court records may be sent down to the court below immediately. Application fails and dismissed.