Delhi District Court
Hon'Ble Supreme Court In M.D. Thomas vs P.S. Jaleel And Anr. on 23 June, 2012
1
IN THE COURT OF MS. SURABHI SHARMA VATS
MM01 (138 NEGOTIABLE INSTRUMENTS ACT)
PHC, NEW DELHI DISTRICT, NEW DELHI.
(a) Complaint Case No. 873/1/10
(b) Date of Institution 17.03.2010
(c) Date of offence The date on which cheque dishonored.
(d) Complainant Ajit Singh
S/o Sh. Bijender Singh
R/o 16A, Behind H. No. 30,
Srvant Quarters, Ferozshah Road,
New Delhi
(e) Accused 1. Sh. Mukesh Kumar Sharma
R/o RZJ1/218, F.F. Sagarpur West
New Delhi110046
2. Mrs. Deepmala
W/o Sh. Mukesh Kumar Sharma
R/o RZJ1/218, F.F. Sagarpur West
New Delhi110046
(f) Offence Under Section 138 N.I. Act
(g) Plea of the accused Pleaded not guilty and claimed trial
(h) Argument heard and
reserve for order 22.06.2012
i) Final order Acquittal
(j) Date of Judgment 23.06.2012
JUDGMENT
Brief facts of the case:
1. It is the case of the complainant that the complainant has given a C.C. No. 873/1/10 MM01 (138 N.I. Act) : 23.06.2012 2 friendly loan to the accused no. 1 of Rs./1,00,000/ on 01.10.2009 for 15 days as the accused persons were in need of money. It is further stated that in this regard, the accused persons have issued one post dated cheque to the complainant to discharge their liability vide cheque bearing no. 574410 dated 14.10.2009 of Rs.1,00,000/ drawn on Canara Bank, Janakpuri, New Delhi. It is further submitted that the cheque was filledup by the accused no. 1 in his hand and was duly signed by accused no. 2 in the presence of the complainant.
2. It is further stated in the complaint that the complainant had demanded his money from the accused several times orally and all times the accused assured to the complainant that they will pay and return his money but the accused have not paid the money of the complainant.
3. It is averred that on the assurance of the accused, the complainant had deposited the said post dated cheque in the last week of December, 2009 for encashment but the same has been returned unpaid vide bank returning memo dated 01.01.2010 with the remarks "Funds Insufficient" and the same was intimated to the accused persons by the complainant. It is further contended that the complainant has again deposited the said cheque in his bank State Bank of India, Chanderlok Building, Janpath, New Delhi for encashment on the assurance of the accused persons but the same returned unpaid for the reason "Cheque Not Drawn Properly" vide returning memo dated 09.02.2010.
4. It is further contended that thereafter, the complainant sent a legal notice dated 11.02.2010 through registered A.D. and UPC to the accused persons which was dispatched on 15.02.2010 calling upon the accused C.C. No. 873/1/10 MM01 (138 N.I. Act) : 23.06.2012 3 persons to make payment of the dishonoured cheque within a period of 15 days from the date of the receipt of the said notice as required under law. The said notice was duly received by the accused persons through U.P.C. and registered A.D. at their residence but the acknowledgment card of their address has not returned back. While the notice through U.P.C. has been duly served upon the accused persons. Despite receiving the legal demand notice, accused persons had failed to make the payment and then present complaint has been filed under section 138 Negotiable Instrument Act.
5. The Learned Predecessor Court after taking cognizance has summoned only accused no. 2 Deepmala, who is the drawer of the cheque in question, and after supplying the documents, a notice under section 251 Cr. P.C. for offence under section 138 Negotiable Instrument Act was served upon accused no. 2 Deepmala on 17.08.2010. Accused no. 2 Deepmala pleaded not guilty and claimed trial. After completion of Complainant's Post Notice Evidence, statement of the Accused Deepmala was recorded u/s 313 Cr. P.C. During recording of statement of accused u/s 313 Cr. P.C., accused Deepmala submitted that she wants to lead evidence in her defence but no evidence has been led by her.
6. I have heard Ld. Counsel for both the parties and also perused the testimony of witnesses and documents placed on record.
7. Section 138 of the Negotiable Instrument Act has three ingredients viz: (I) that there is a legally enforceable debt;
(II) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes C.C. No. 873/1/10 MM01 (138 N.I. Act) : 23.06.2012 4 a legally enforceable debt; and (III) that the cheque so issued had been returned due to insufficiency of funds.
8. Before further adverting to the facts of case, I would like to reproduce section 138, section 118 (a) and 139 of the Negotiable Instrument Act. Section 138 reads as under :
138. Dishonour of cheque for insufficiency, etc., of funds 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 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 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 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 of the cheque, 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 thirty 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 C.C. No. 873/1/10 MM01 (138 N.I. Act) : 23.06.2012 5 may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation.-- For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other liability.
Section 118 of NI Act reads as follows: Presumptions as to negotiable instruments.-Until the contrary is proved, the following presumptions shall be made:
(a) of consideration : that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;
"That every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
and section 139 presumption in favour of holder reads as under: "It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability."
9. Taking into consideration the facts of this case, circumstances, evidence on record and hearing the arguments by both the parties, this court is of the view that section 138 of NI Act would not apply in the present case.
10. Brief reasons for this finding are as under : 10.1) Ld. defence counsel has raised a particular defence that the legal demand notice has not been sent to the drawer of the cheque who is the C.C. No. 873/1/10 MM01 (138 N.I. Act) : 23.06.2012 6 accused in the present case namely Deepmala. It is further submitted by Ld. counsel for the accused that the legal demand notice was only sent to her husband. Postal receipt and UPC receipt which are exhibited as Ex. CW1/E and Ex. CW1/F respectively have been admittedly addressed to Sh. Mukesh Kumar Singh who is the husband of accused Deepmala.
Percontra, it is submitted by Ld. counsel for the complainant that the service of legal demand notice upon the husband of the accused be deemed as the service of the legal demand notice upon accused Deepmala. It is further contended on behalf of the complainant that the legal demand notice contains the name of both husband of the accused and the name of the accused although the legal demand notice is sent to the husband of the drawer of the cheque.
It is pertinent to quote here clause (b) of proviso of Section 138 :
(b) the payee or the holder in due course of the cheque, 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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and In the instant case in hand, the legal demand notice was not sent to the drawer of the cheque who is the accused no. 2 Deepmala rather it was sent only to her husband. Thus, the condition precedent under clause (b) of proviso to Section 138 is not fulfilled in the present case. 10.2) Hon'ble Supreme Court of India judgment in case titled as Sivakumar vs. Natarajan, (2009) 13 SCC 623 has held that : By reason of Section 138 of the Act, a legal presumption in regard to commission of a crime has been raised. The proviso C.C. No. 873/1/10 MM01 (138 N.I. Act) : 23.06.2012 7 appended thereto, however, states that nothing contained in the main provision would apply unless conditions specified in clauses (a), (b) and (c) thereof are complied with. Clauses (a),
(b) and (c) of the proviso, therefore, lay down conditions precedent for applicability of the main provision. Section 138 being penal in nature, warrants strict construction. Both clauses (a) and (b) of the proviso to Section 138 employed the term "within a period". Whereas clause (a) refers to presentation of the cheque to the bank within a period of six months from the date on which it is drawn, clause
(b) provides for issuance of notice "to the drawer of the cheque, within thirty days of the receipt of information". The words "within thirty days of the receipt of information" are significant. Parliament advisedly did not use the words "from the date of receipt of information" in Section 138. It is also of some significance to notice that in terms of Section 9 of the General Clauses Act, 1897, whereupon reliance has been placed by the High Court, the statute is required to use the word "from" and for the purpose of including the last in a series of days or any other period of time, to use the word "to". The departure made from the provisions of Section 9 of the General Clauses Act by Parliament, therefore, deserves serious consideration.
"...What would constitute an offence is stated in the main provision. The proviso appended thereto, however, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken..."
In Harman Electronics (P) Ltd. v. National Panasonic India (P) Ltd., this court held : (SCC pp. 726 & 72829, paras 89 &
13) "8. ...The proviso appended thereto imposes certain conditions before a complaint petition can be entertained. Thus, it is clear that the main provision i.e. Section 138 of NI Act C.C. No. 873/1/10 MM01 (138 N.I. Act) : 23.06.2012 8 would apply only if conditions specified in clauses (a), (b) and (c) of the proviso of Section 138 of NI Act are fulfilled.
10.3) The service of the legal demand notice upon the husband of the accused cannot be treated as the service of the legal demand notice upon the drawer of the cheque (accused).
Hon'ble Supreme Court in M.D. Thomas vs P.S. Jaleel and Anr. 2010(4) RCR(Criminal) 417 has held that:
"......Learned counsel for the appellant argued that his client's conviction is liable to be set aside because before filing complaint, the respondent did not serve upon him notice as per the requirement of Clause (b) of proviso to Section 138 of the Act. He submitted that service of notice on the appellant's wife cannot be treated as compliance of the mandate of law. Learned counsel for respondent No.1 did not dispute that the notice issued by his client was, in fact, served upon the appellant's wife but argued that this should be treated as sufficient compliance of the requirement of giving notice of demand. Section 138 deals with the dishonour of cheque for insufficiency, etc., of funds in the accounts of the person who draws the cheque and lays down that such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this 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. Proviso to Section 138 specifies the conditions which are required to be satisfied before a person can be convicted for an offence enumerated in the substantive part of the section. Clause (b) of the proviso to Section 138 cast on the payee or the holder in due course of the cheque, as the case may be, a duty to make a demand for payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of C.C. No. 873/1/10 MM01 (138 N.I. Act) : 23.06.2012 9 information by him from the bank regarding the return of the cheque as unpaid. In the present case, the notice of demand was served upon the wife of the appellant and not the appellant. Therefore, there is no escape from the conclusion that complainantrespondent had not complied with the requirement of giving notice in terms of Clause (b) of proviso to Section 138 of the Act. Unfortunately, the High Court overlooked this important lacuna in the complainant's case. Therefore, the conviction of the appellant cannot be sustained. In the result, the appeal is allowed. The impugned order is set aside and the order of acquittal passed by the Trial Court is restored."
According to this judgment of Hon'ble Apex Court, it cannot be said that the condition of proviso (b) to Section 138 is complied with by giving legal demand notice to husband/wife of the drawer of cheque. As the condition of proviso (b) to Section 138 NI Act i.e. making of demand for payment of money by giving a notice in writing to the drawer of the cheque is not complied with, the main provision u/s 138 NI Act would not apply in this case in hand.
11. In view of the above discussion, this court has come to the conclusion that Section 138 NI Act would not apply in this case. Accused Deepmala is acquitted for the offence u/s 138 NI Act. Bail bond and surety bond of accused Deepmala are extended u/s 437A of Cr. P.C. After compliance file be consigned to record room.
Announced in open court (Surabhi Sharma Vats)
rd
on 23 Day of June, 2012 MM01 (138 N.I. Act)
PHC/New Delhi
C.C. No. 873/1/10 MM01 (138 N.I. Act) : 23.06.2012