Ashish Narang v. State of Kerala & Ravendran

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI** ## **MONDAY, THE 10TH DAY OF FEBRUARY 2020 / 21ST MAGHA, 1941** ## **Crl.MC.No.7570 OF 2019(E)** **ST 1689/2018 OF SPECIAL JUDICIAL MAGISTRATE OF FIRST CLASS FOR TRIAL OF CASES U/S.138, NIACT , KOZHIKKODE, KOZHIKKODE DISTRICT** ## **PETITIONER/ACCUSED:** **ASHISH NARANG AGED 39 YEARS S/O. LOKESH NARANG, C-77, INDERPURI, NEW DELHI. PIN - 110 012** **BY ADVS. SRI.PRASUN.S SRI.N.A.RETHEESH** ## **RESPONDENTS/STATE & COMPLAINANT:** **1 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, PIN - 682 031. 2 P. P. RAVEENDRAN AGED 55 YEARS S/O. M. S. NAIR, 'ROHINI' NEAR NETHAJI COLONY, KOTTOOLI AMSOM DESOM, KOZHIKKODE TALUK, P. O. KOTTOOLI, KOZHIKODE, PIN - 673 016.** **R2 BY ADV. SRI.K.G.RAJEESH SRI AJITH MURALI-PP** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 22.01.2020, THE COURT ON 10.02.2020 PASSED THE FOLLOWING:** Crl.M.C.No.7570/2019 2 ## **R.NARAYANA PISHARADI, J** ************************ Crl.M.C.No.7570 of 2019 ---------------------------------------------Dated this the 10[th] day of February, 2020 ## **O R D E R** The petitioner is the accused in the case S.T.No.1689/2018 on the file of the Court of the Judicial First Class Magistrate (N.I.Act Cases), Kozhikode. 2. The aforesaid case is instituted upon the complaint filed against the petitioner by the second respondent (hereinafter referred to as 'the complainant') for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act'). 3. Annexure-A1 is the copy of the complaint. The material averments in the complaint are as follows: The accused had borrowed Rs.14,00,000/- from the complainant in November, 2017. When the complainant made repeated demands for repayment of the amount, the accused executed and issued three Crl.M.C.No.7570/2019 3 cheques in favour of the complainant in discharge of the liability. The details of the cheques are: (1) Cheque No.563954 dated 01.07.2018 for Rs.5,00,000/-. (2) Cheque No. 563955 dated 01.07.2018 for Rs.5,00,000/-. (3) Cheque No. 563956 dated 01.07.2018 for Rs.4,00,000/-. The complainant presented the cheques in the bank. They were returned unpaid for the reason “payment stopped by the drawer”. The complainant sent a lawyer notice dated 29.05.2018 to the accused demanding payment of Rs.14,00,000/-. The accused did not receive the notice and it was returned to the complainant. The accused did not pay the amount of the cheques to the complainant. 4. This petition is filed under Section 482 Cr.P.C for quashing Annexure-A1 complaint and also the proceedings based on the complaint pending before the court. 5. Heard learned counsel for the petitioner and also the second respondent/complainant. 6. Though several grounds are stated in the petition for quashing Annexure-A1 complaint, at the time of hearing of the petition, learned counsel for the petitioner has urged only one Crl.M.C.No.7570/2019 4 ground and it is with regard to the validity of the statutory notice (Annexure-A2) sent by the complainant to the petitioner. Learned counsel for the petitioner contended that Annexure-A2 notice is defective and invalid and therefore, the complaint instituted on the basis of such notice is not maintainable. Learned counsel for the petitioner submitted that what is demanded in Annexure-A2 notice is the loan amount and not the amount of the cheques allegedly issued by the petitioner to the complainant. Learned counsel has pointed out that the amount of one of the cheques is not mentioned in the notice. 7. _Per contra_ , learned counsel for the second respondent submitted that the loan amount and the cheque amount are the same and therefore, a demand for payment of the loan amount is sufficient. Learned counsel would also submit that nonmentioning of the amount of one of the cheques in Annexure-A2 notice is an omission occurred in drafting the notice by the counsel. 8. Paragraphs 3 and 4 of Annexure-A2 notice are extracted below: Crl.M.C.No.7570/2019 5 _“3. Believing your representation, my client paid you this amount of Rs.14 lakhs, in the last week of November 2017._ _4. My client tells me that you did not pay him this amount, in the stipulated time. However, after repeated requests you executed and issued 3 cheques (1) Cheque No: 563954 for Rs.5,00,000/(5 Lakhs Rupees ) dt.01.07.2018, (2) Cheque No.563955 for Rs.5,00,000/- (5 Lakhs Rupees) dt.01.07.2018 and (3) Cheque No.563956 dt.01.07.2018, all of them drawn on the HDFC Bank, NAIWALA, Gurudwara Road, “Karolbagh, New Delhi – 110005 towards the amount you owed my client.”_ ## The last paragraph of Annexure-A2 notice reads as follows: _“Therefore, my client wants me to ask you to pay this amount of 14 lakh rupees “within 15 days of receipt of this letter” failing which he would be constrained to take appropriate legal action, including, filing a Criminal Complaint against you, before the Judicial I Class Magistrate VIII, Kozhikode, Kerala State, under Section 138 of the Negotiable Instruments Act, in which if found guilty you may be held liable for imprisonment up to 2 years or with fine upto double the amount of the cheque or with both.”_ Crl.M.C.No.7570/2019 6 9. The proviso appended to Section 138 of the Act imposes certain conditions which must be fulfilled for taking cognizance of the offence. One of such conditions, as envisaged under clause (b) of the proviso to Section 138 of the Act, is that the payee or the holder in due course of the cheque, as the case may be, shall make a demand for the payment of the amount of the cheque 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. 10. A plain reading of clause (b) of the proviso to Section 138 of the Act would indicate that the payee or the holder in due course of the cheque should make a demand for the payment of the amount covered by the cheque 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. What is essential is a demand in writing by giving a notice to the drawer of the cheque for payment of the amount of the cheque. Clause (b) of the proviso to Section 138 of the Act indicates in unmistakable terms as to what demand Crl.M.C.No.7570/2019 7 shall be made in the notice and in what manner it shall be made. A demand for payment of the amount of the cheque by sending a notice in writing is _sine qua non_ for filing a complaint for an offence under Section 138 of the Act. The demand in the notice shall be for payment of the amount of the cheque. If no such demand is made, no doubt, the notice would fall short of its legal requirement. 11. The object of sending a notice demanding payment of the amount of the cheque is to give an opportunity to the drawer of the cheque to rectify his omission and also to protect an honest drawer. No form of notice is prescribed under clause (b) of the proviso to Section 138 of the Act. The requirement of giving notice to the drawer of the cheque is to enable him to avoid the prosecution under Section 138 of the Act. 12. The notice has to be read as a whole. A notice must be construed not with a desire to find fault in it which would render it defective. It must not be read in a hyper-technical manner. It must be construed strictly but in a sensible manner. 13. In the instant case, it is stated in Annexure-A2 notice Crl.M.C.No.7570/2019 8 that the complainant paid Rs.14,00,000/- to the petitioner in the last week of November, 2017. Thereafter, it is alleged in the notice that the petitioner did not pay the amount to the complainant within the stipulated time and after repeated requests made by the complainant, the petitioner executed and issued three cheques towards the amount the petitioner owed to the complainant. True, the amount of the third cheque is not mentioned in the notice. But, it is stated in the notice that the cheques were executed and issued by the accused “towards the amount you owed my client”. Therefore, there is a specific recital in the notice that the three cheques were executed and issued by the accused to the complainant towards the amount which he owed the complainant. Thereafter, in the last paragraph of the notice, a demand is made for the payment of the amount of Rs.14,00,000/-. 14. Learned counsel for the petitioner placed heavy reliance upon the decision of the Apex Court in **M/s Rahul Builders v. M/s Arihant Fertilisers and Chemicals : (2008) 2 SCC 321** , in support of his contention that the notice is invalid Crl.M.C.No.7570/2019 9 and defective. 15. In **M/s Rahul Builders** (supra), the Apex Court has held that, an omnibus notice without specifying as to what was the amount of the dishonoured cheque would not subserve the requirement of the law. In that case, the amount of the cheque was Rs.1,00,000/-. However, the demand made in the notice was for payment of the amount of the pending bills which was to the tune of Rs.8,72,409/-. It was in such circumstances that the Apex Court held that the notice did not contain a demand for payment of the amount of the cheque. This decision has no application to the facts of the present case. 16. In **Indira v. Adinarayana : AIR 2003 SC 4689** , the Supreme Court construed the contents of a notice and observed as follows: _“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_ Crl.M.C.No.7570/2019 10 _was a demand for payment of the cheque amount and in addition thereto made further demands as well. What is necessary is 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”._ 17. In the instant case, there is no difference between the loan amount and the total amount of the cheques. The amount allegedly advanced by the complainant to the petitioner was Rs.14,00,000/-. Though the amount of one of the cheques is not mentioned in the notice, the amount of the two other cheques is mentioned in the notice and also it is stated that the three cheques were issued by the accused in discharge of the amount owed by him to the complainant. 18. In **Central Bank of India v. M/s Saxon Farms : AIR 1999 SC 3607** , the notice contained only a demand as "Kindly Crl.M.C.No.7570/2019 11 arrange to make the payment to avoid the unpleasant action of my client." The Apex Court held that it is a clear demand as required under Clause (b) of Section 138 of the Act. 19. In **Vijay Gopala Lohar v. Pandurang Ramchandra Ghorpade : AIR 2019 SC 3272** , the demand made in the notice was for payment of the loan amount which was equivalent to the amount of two cheques. The Apex Court held that, since the amount of the cheques was the same, the notice was valid. 20. The attempt of the petitioner is to take advantage of an inadvertent omission made by the counsel for the complainant to mention in the notice the amount of one of the three cheques. The loan amount is specifically stated in the notice. It is also stated in the notice that the three cheques were executed and issued by the petitioner to the complainant towards the amount owed by him to the complainant. The details and the amount of the two cheques are given in the notice. The number and the date of the third cheque are also mentioned in it. In such circumstances, mere omission to mention the amount of the third cheque, is of no consequence. When the notice is read as a Crl.M.C.No.7570/2019 12 whole, there can be no doubt with regard to the fact that the demand made in the notice was for an amount of Rs.14,00,000/-, which was allegedly due from the petitioner to the complainant, and it was the total amount of the three cheques allegedly executed by the petitioner and issued by him to the complainant. 21. In the aforesaid circumstances, I find that AnnexureA1 complaint is not liable to be quashed on the ground that Annexure-A2 notice is defective or invalid or on the ground that there was no proper notice sent by the complainant to the petitioner as envisaged under Clause (b) of the proviso to Section 138 of the Act. The petition is liable to be dismissed. Consequently, the petition is dismissed. **==> picture [39 x 13] intentionally omitted <==** ## **R.NARAYANA PISHARADI, JUDGE** jsr Crl.M.C.No.7570/2019 13 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** ## **ANNEXURE A1** **THE TRUE PHOTOCOPY OF THE PRIVATE COMPLAINT DATED 7.11.2018 IN S.T.NO.1689 OF 2018 PREFERRED BY THE SECOND RESPONDENT HEREIN BEFORE THE COURT OF THE SPECIAL JUDICIAL FIRST CLASS MAGISTRATE (NI ACT CASES), KOZHIKODE.** ## **ANNEXURE A2** **THE TRUE PHOTOCOPY OF THE AFORESAID LAWYER NOTICE OF DEMAND ISSUED ON BEHALF OF THE SECOND RESPONDENT.** **ANNEXURE A3** **THE TRUE PHOTOCOPY OF THE ENVELOPE WITH RESPECT TO ANNEXURE A2** **ANNEXURE A4** **THE TRUE PHOTOCOPY OF THE CERTIFIED COPY OF THE POSTAL CARD WITH RESPECT TO ANNEXURE A2** RESPONDENTS' EXHIBITS: NIL TRUE COPY PS TO JUDGE