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2003 DIGILAW 375 (JK)

Mohd. Shafi Ahanger v. Yasir Paul

2003-12-01

S.K.GUPTA

body2003
Per Honble Mr. Justice S. K. Gupta (Oral) Both these revision petitions having arisen out of an order dated : 30.9.2003 passed by Judicial Magistrate, (Judge Small Cause), Srinagar in a case between the same parties and on the similar facts, except variance in the number of the cheque and the amount mentioned therein, are being disposed of by this common order. 2. Facts giving rise to these revision petitions in resume may be noticed. 3. Accused-respondent issued cheque in the amount mentioned therein in favour of the complainant-petitioner and when the said cheques were presented in the Bank for encashment, were bounced and returned with the memo dated: 29.7.2003 "insufficient balance". Demand notice was given by the complainant to the accused through registered post, informing him regarding return of the cheque as unpaid and requiring him to make the payment of the said amount of cheques. The non-payment of the amount of cheques by drawer within 15 days of such notice led the complainant to prefer a complaint under section 138 of the Negotiable Instrument Act, 1881 ( hereinafter to be referred to be "the Act"). The trial magistrate, however, after recording the preliminary statement of the complainant took cognizance and issued process to the accused for his appearance in the case. In response to the summons, the accused put in his appearance and filed an application before the trial magistrate seeking dropping of the proceedings initiated against him, inter-alia, alleging that the complaint does not disclose the date of receipt of the demand notice, stated to have been given to the drawer. It was further contended that the demand notice is not in accordance with law as it does not disclose the statutory period for the payment of amount of cheque. After receipt of such notice, therefore, it does not fulfill the mandatory requirement under section 138 of the Act and thus the complaint is not maintainable. The trial magistrate, after inviting objections and hearing the parties, found that the essential ingredients of the offence have not been satisfied by the complainant for prima facie making out a case under section 138 of the Act and ordered the dropping of proceedings against the accused in the complaint vide order dated : 30. 9.2003 which became the subject matter of challenge in these petitions. 4. 9.2003 which became the subject matter of challenge in these petitions. 4. Heard learned counsel appearing for the petitioner and also gone through the relevant provisions of law touching the controversy in context with the material on record. 5. The whole controversy centres around a narrow compass. 6. The contention raised before the trial magistrate in the application seeking dropping of the proceedings was that the complaint neither reveals that when the demand notice was dispatched to the accused and if dispatched when it was received. The complainant, however, mentioned in the recital of the complaint that the accused must have received the registered notice which clearly indicates that he himself was not sure as to on which date the demand notice was received. Further submission of the accused is that even in the preliminary statement recorded by the trial magistrate, nothing has been said regarding the date of the receipt of the demand notice by the accused and thus no cause of action has accrued to the complainant to file the complaint. It was further the case of the accused before the trial magistrate, projected in the application, that it is the receipt of the notice by the drawer which gives a cause of action to the complainant to file complaint within the statutory period. This having not been done by the complainant, no cognizance could be taken on such complaint and the proceedings initiated against the accused are required to be dropped. 7. The object of bringing Section 138 of the Act on statute book as to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. This having not been done by the complainant, no cognizance could be taken on such complaint and the proceedings initiated against the accused are required to be dropped. 7. The object of bringing Section 138 of the Act on statute book as to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. The ingredients which are to be satisfied for making out a case under section 138 of the Act are: "(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of certain amount of money to another person from out of that account for the discharge of any debt or other liability; (ii) that 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; (iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the 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 the bank; (iv) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; (v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice. If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence. 8. Section 138 proviso (b) of the Act, however does not prescribe a particular form of notice, the requirement is that a notice shall be given in writing within 15 days of the receipt of information from the bank regarding return of the cheque as unpaid and in the notice a demand for payment of the amount of cheque has to be made. Further, service of notice of demand is a condition precedent as envisaged under proviso (c) of Section 138 of the Act, as also the view taken in Central Bank of India v. Saxon Farms (1999) 8 SCC 221. It, therefore, follows that cause of action under section 138 proviso (c) of the Act to prefer a complaint arises not from giving of the notice but from the receipt of notice thereof by the drawer. 9. Section 138 of the Act makes a civil transaction to be an offence by fiction of law. To constitute an offence under section 138 of the Act, the complainant is obliged to prove its ingredients which include the receipt of notice by the accused under clause (b). It is not the "giving" of notice which makes the offence but it is receipt of the notice by the drawer which gives a cause of action to the complainant to file a complaint within statutory period. On going through the impugned order passed by the trial magistrate, it is clearly gatherable that the complainant has no where stated either in the complaint or in the preliminary statement recorded by the trial magistrate before issuing the process as to when the notice of demand was dispatched to the accused, when and on which date it was received by the drawer of the cheque/accused. It is mandatory requirement of proviso (c) of section 138 of the Act that it is the date of receipt of notice which is material because it is after the expiry of 15 days of this date that the complainant gets a cause of action to make a complaint within a statutory period provided under the Act. It is prima facie for the complainant to make out a case so as to enable the court to examine the complainant as a preliminary evidence to find out that the essential requirement under section 138 of the Act are satisfied for proceedings against the drawer of the cheque. In these cases, neither the complaint disclose the of notice of demand on the drawer of the cheque nor the preliminary evidence adduced by the complaint. In these cases, neither the complaint disclose the of notice of demand on the drawer of the cheque nor the preliminary evidence adduced by the complaint. Even the learned counsel appearing for the petitioner when taken through the record, could not show as to when and on which date the demand notice was issued after dishonour of the cheque and on which date it was received by the accused so as to give cause of action to maintain the complaint. He also candidly expressed that there is nothing to suggest as to when the notice of demand was given and whether it was served or not. The date of receipt of notice becomes material and significant when the payment of cheque amount is not made within 15 days of the receipt of the notice and in that event the cause of action accrues to the complainant to maintain the complaint. Similar view was taken by this Court and an identical issue crept up for adjudication in 2000 SLJ 247. It is, therefore, meaningful to point out that before a cognizance is taken on a complaint and process issued against the accused, it is obligatory on the magistrate to see that the complaint prima facie discloses that the drawer has failed to make payment of the money to him within 15 days of the receipt of said notice and unless the date of receipt of the notice is clearly made out from the complaint as also the preliminary statement of the complainant, no cause will accrue to the complainant to maintain the complaint within the purview of law. To elucidate further, it is at to point out that after the expiry of 15 days of date of receipt of notice that the complaint can be maintained by the complainant within statutory period provided under the Act. It is for the complainant to make out a prima facie case and satisfy the essential ingredients for taking cognizance and issuing process under section 138 of the Act against the drawer of the cheque /accused. Notice should not be deemed to have been served as a matter of course. It is the date of receipt of notice which is material to provide a cause of action to the complainant to maintain the complaint. Notice should not be deemed to have been served as a matter of course. It is the date of receipt of notice which is material to provide a cause of action to the complainant to maintain the complaint. There is a plethora of precedent laid down by various High Courts and the Apex Court that it is the receipt of notice and not giving of notice which gives a cause of action of the complainant to maintain the complaint. 10. After taking conspectus of entire gamete of questions involved in these revision petitions on the touch stone of relevant provisions of law under the Negotiable Instruments Act, 1881, the inevitable conclusion reached, that the cause of action accrues to the complainant not from giving of the notice but on receipt of the notice by the drawer of the cheque. This essential condition, having not been satisfied by the complainant either in the complaint or in the preliminary statement to support averments in the complaint, it has rightly been held not maintainable by the trial magistrate and dropped proceedings thereof. The view expressed by the trial magistrate is the view to which no exception can be taken. 11. For what has been stated and discussed above, I do not find any merit in these criminal revisions which are accordingly dismissed.