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Andhra High Court · body

2013 DIGILAW 40 (AP)

C. N. Reddy v. G. Ramesh

2013-01-24

R.KANTHA RAO

body2013
ORDER This criminal petition is filed under Section 482 of the Code of Criminal Procedure to quash the proceedings in CC No. 196 of 2010 on the file of the XIII Metropolitan Magistrate, L.B. Nagar, Ranga Reddy District. 2. I have heard Sri Ch. Ravindra Babu, learned Counsel appearing for the petitioner, Sri K. Suresh Reddy, learned Counsel appearing for the respondent No. 1/complainant and the learned Additional Public Prosecutor representing the State/respondent No. 2. 3. Brief facts of the case which is sought to be quashed are the following: The first respondent/complainant supplied some cooking equipments pursuant to the work order placed by the accused/petitioner and an amount of Rs. 3 lakhs became due from the petitioner towards the cost of cooking equipment. After repeated demands made by the first respondent for payment of the amount of Rs. 3 lakhs which became due, the first respondent issued a cheque dated 6.11.2009 for an amount of Rs. 1,50,000/- and another cheque dated 8.12.2009 for an amount of Rs. 1,50,000/- drawn on Andhra Bank, Turkayamjal Branch, Ranga Reddy District. When they were presented for collection, they were dishonoured with an endorsement 'funds insufficient'. The said fact was informed by the bank to the first respondent through two cheque return memos dated 11.12.2009 and the said memos were received by the first respondent on 12.12.2009. The said fact was immediately informed by the first respondent to the petitioner. The petitioner in turn requested the first respondent not to take any action and promised to pay the total amount within a short period. Accordingly, the petitioner paid an amount of Rs. 60,000/- through three separate cheques dated 14.12.2009, 16.12.2009 and 6.1.2010 respectively. 4. Thereafter, the first respondent demanded the petitioner for payment of the balance amount of Rs. 2,40,000/- and on the instructions of the petitioner he again presented the said two cheques for collection. The said cheques were dishonoured again with an endorsement 'funds insufficient' and the said fact was informed to the first respondent on 5.12.2010 and the information was received by the complainant on 6.12.2010. Subsequently, the first respondent/complainant demanded the petitioner/accused to pay the balance amount of Rs. 2,40,000/- several times, but the petitioner failed to pay the amount. On that the complainant got issued two legal notices dated 8.12.2010. One of the notices was received by the petitioner/accused and the other notice was refused by him. Subsequently, the first respondent/complainant demanded the petitioner/accused to pay the balance amount of Rs. 2,40,000/- several times, but the petitioner failed to pay the amount. On that the complainant got issued two legal notices dated 8.12.2010. One of the notices was received by the petitioner/accused and the other notice was refused by him. The petitioner got sent a reply notice on 26.2.2010 to the complainant stating inter alia that the notice issued by the first respondent/complainant purportedly under Section 138 of the Negotiable Instruments Act is not in accordance with law and also setting up the plea that the cheques were issued by the petitioner as security for the amount due and on making part payment by him, the first respondent assured him that he would not present them for collection. After receiving the said reply, the first respondent/complainant filed a complaint under Sections 138 and 142 of the Negotiable Instruments Act within the time allowed by law. The said complaint is sought to be quashed in the present criminal petition. 5. The cheques were issued for an amount of Rs. 1,50,000/- each, they were presented for collection and were dishonoured twice. But, in the meanwhile, the petitioner/accused made part payment of Rs. 60,000/- and ultimately an amount of Rs. 2,40,000/- remained to be paid to the first respondent/complainant. These facts are not in dispute. Stating all these facts, the first respondent/complainant issued two separate legal notices in respect of each cheque calling upon the respondent to pay the amount of Rs. 1,30,000/- in respect of one cheque and an amount of Rs. 1,10,000/- in respect of the other within 15 days from the date of receipt of the notice. Notices were issued on 9.2.2010. 6. Learned Counsel appearing for the petitioner would contend that the statutory notices under Section 138 of the Negotiable Instruments Act, 1881 must contain a demand of payment of the cheque amount. In the instant case, in the two notices demand was made to make payment of Rs. 1,30,000/- and Rs. 1,10,000/- respectively but the total sum due was Rs. 2,40,000/- the notice is not in accordance with law and basing on the said defective notices, the first respondent/complainant cannot maintain prosecution against the petitioner/accused under Section 138 of the Negotiable Instruments Act. 7. 1,30,000/- and Rs. 1,10,000/- respectively but the total sum due was Rs. 2,40,000/- the notice is not in accordance with law and basing on the said defective notices, the first respondent/complainant cannot maintain prosecution against the petitioner/accused under Section 138 of the Negotiable Instruments Act. 7. On the other hand, the learned Counsel appearing for the first respondent/complainant contended that whichever total amount has been mentioned therein including the actual amount became ultimately due from the petitioner/accused, the demand was also made in the notice only to repay the amount which ultimately remained unpaid after part payment made by the petitioner and therefore, the complaint is not liable to be quashed on the technical ground that the cheque amount was not demanded in the notice. 8. In support of his contention, the learned Counsel appearing for the petitioner relied on K.R. Indera v. Dr. G. Adinarayana, 2004 (1) ALD (Crl.) 31 (SC) = (2003) 8 SCC 300 , wherein the Supreme Court held as follows: "Though no formal notice is prescribed in the provision, the statutory provision indicates in unmistakable terms as to what should be clearly indicated in the notice and what manner of demand it should make. In Suman Sethi's case (supra) on considering the contents of the notice, it was observed that there was specific demand in respect of the amount covered by the cheque and the fact that certain additional demands incidental to it, in the form of expenses incurred for clearance and notice charges were also made did not vitiate the notice. In a given case if the consolidated notice is found to provide sufficient information envisaged by the statutory provision and there was a specific demand for the payment of the sum covered by the cheque dishonoured, mere fact that it was a consolidated notice, and/or that further demands in addition to the statutorily envisaged demand was also found to have been made may not invalidate the same. This position could not be disputed by learned Counsel for the respondent. However, according to the respondent, the notice in question is not separable in that way and that there was no specific demand made for payment of the amount covered by the cheque. We have perused the contents of the notice. This position could not be disputed by learned Counsel for the respondent. However, according to the respondent, the notice in question is not separable in that way and that there was no specific demand made for payment of the amount covered by the cheque. We have perused the contents of the notice. Significantly, not only the cheque amounts were different from the alleged loan amounts but the demand was made not of the cheque amounts but only the loan amount as though it is a demand for the loan amount and not the demand for payment of the cheque amount; nor could it be said that it was a demand for payment of the cheque amount and in addition thereto made further demands as well. What is necessary in making of a demand for the amount covered by the bounced cheque which is conspicuously absent in the notice issued in this case. The notice in question is imperfect in this case not because it had any further or additional claims as well but it did not specifically contain any demand for the payment of the cheque amount, the non-compliance with such a demand only being the incriminating circumstance which expose the drawer for being proceeded against under Section 138 of the Act. That being the position, the ultimate conclusion arrived at by the trial Court and the High Court do not call for interference in these appeals, though for different reasons indicated by us. The appeals are, accordingly dismissed." 9. The learned Counsel further relied on M/C. TCI Finance Ltd., Secunderabad v. State of A.P. and another, 2004 (1) ALD (Crl.) 979 (AP) = 2004 Crl. LJ 3163 and Mahendralal Shivhare v. State of M.P. and another, 2009 (1) DCR 606, Nandkishore Mehra v. Sudhir Transport Ltd. and another, 2009 (1) DCR 608 = 2010 (1) ALD (Crl.) (NOC) 19 (Bom.) and Gaurav Singh Rathore and another v. Taipan Traders Ltd., (2009) BC 84. In all the cases, the ratio laid down is that the statutory notice issued under Section 138 of the Negotiable Instruments Act must contain the demand of payment of the cheque amount, but not entire amount which was allegedly due from the accused to the complainant. 10. In all the cases, the ratio laid down is that the statutory notice issued under Section 138 of the Negotiable Instruments Act must contain the demand of payment of the cheque amount, but not entire amount which was allegedly due from the accused to the complainant. 10. The object of clause (b) of Section 138 of the Negotiable Instruments Act is to issue a notice to the accused affording him an opportunity to make the payment relating to the cheque amount the presumption contemplated under Section 138 of the Act is only in relation to the dishonour of the cheque and it is only concerned with the cheque amount, but not concerned with the entire amount which was allegedly became due from the accused to the complainant. Section 138 of the Act is a penal provision which excludes the mens rea as an ingredient of the criminal offence created under the said provisions. The criminal liability which the Legislature introduces through Section 138 of the Negotiable Instruments Act is based on the principle of strict liability and the Legislature's intention in enacting the said provision cannot be defeated on technical grounds unless prejudice is shown to have been caused to the accused. The principle laid down in all the decisions relied on by the learned Counsel appearing for the petitioner is that the demand in the statutory notice under Section 138 of the Negotiable Instruments Act should confine to the cheque amount, but it shall not embarrass the entire debt allegedly became due from the accused to the complainant. In the present case the complainant specifically mentioned in the two notices issued by him that against the debt of Rs. 3,00,000/- the petitioner/accused repaid an amount of Rs. 60,000/- and only an amount of Rs. 1,30,000/- under one cheque and an amount of Rs. 1,10,000/- under the other remained unpaid and thus he demanded total amount of Rs. 2,40,000/- in the two notices, it cannot be said that the petitioner/accused was mislead by the notices or that they were in any way prejudicial to the interest of the accused so that on receiving the said notices the accused landed in confession to understand as to what was the amount he had to pay in respect of each cheque. Since the accused made part payment of Rs. Since the accused made part payment of Rs. 60,000/- the first respondent/complainant made a mention about the same in his two notices and only demanded Rs. 1,30,000/- under each of the cheques which were dishonoured. Each of the said cheques were in fact for an amount of Rs. 1,50,000/-. The first respondent/complainant fairly admitted the part payment made by the accused and stated the same in his two statutory notices sent to the accused. In all the judgments relied on by the learned Counsel appearing for the petitioner, the statutory notices contain a demand for more than the cheque amount. But, in the instant case, the statutory notices issued by the first respondent/complainant contain demand of less than the cheque amount. Therefore, I see no substance in the contention urged by the learned Counsel appearing for the petitioner/accused that the notices issued by the first respondent/ complainant do not comply the requirements of Section 138-B of the Act. 11. As regards the contention that the cheques were issued as collateral security, it is a question of fact which can be decided by the learned Magistrate only during the course of trial. As the said fact had not been admitted by the complainant, this Court is not supposed to record any finding on the said aspect. The notices issued by the complainant are strictly in conformity with the provisions of Section 138 of the Negotiable Instruments Act and the prosecution under Sections 138 and 142 of the Negotiable Instruments Act can certainly be maintainable basing on the said notices issued by the complainant. I see no valid grounds to quash the compliant filed by the first respondent. 12. For the foregoing reasons, the criminal petition fails and the same is dismissed.