Ramaraj v. Rajesh Kumar T.S & State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE P.D.RAJAN** **FRIDAY, THE 4TH DAY OF APRIL 2014/14TH CHAITHRA, 1936** ## **Crl.MC.No. 703 of 2012 ()** **-------------------------CC.NO.144/2011 OF CHIEF JUDICIAL MAGISTRATE COURT, ALAPPUZHA** **--------------------------** ## **PETITIONER/ACCUSED:** **---------------------------------------** **RAMARAJ, OPAL ENERGY SOLUTION PRIVATE LTD.5, RAJESWARI NAGAR, CHENNAI-29.** **BY ADV. SRI.B.PRAMOD** ## **RESPONDENT(S)/COMPLAINANT & STATE :** **----------------------------------------------------------------** **1. RAJESH KUMAR T.S,AGED 41 YEARS, S/O. SREENIVASAN, THEKKETHAYYIL, ASRAMAM WARD, AVALUKUNNU.P.O., ALAPUZHA-688 001.** ## **2. STATE OF KERALA,** **REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R1 BY ADV. SRI.S.SHANAVAS KHAN R2 BY PUBLIC PROSECUTOR SRI.JITHESH.R.** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 04-04-2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **sts** **CRMC.NO.703/2012** **APPENDIX** ## **PETITIONER(S) ANNEXURES:** **ANNEX.I TRUE COPY OF THE COMPLAINT IN C.C. NO. 144/2011 OF THE CJM COURT, ALAPPUZHA.** **ANNEX.II TRUE COPY OF THE SUMMONS DATED 12-10-2011 ISSUED TO THE PETITIONER IN C.C. NO. 144/2011 OF THE CJM COURT, ALAPPUZHA.** **ANNEX.III TRUE COPY OF THE LAWYER'S NOTICE DATED 27-8-2011 ISSUED TO THE PETITIONER.** **ANNEX.IV TRUE COPY OF THE LAWYER'S NOTICE DATED 14-9-2011 ISSUED TO THE 1ST RESPONDENT.** **ANNEX.V TRUE COPY OF THE POSTAL RECEIPT DATED 14-9-2011. ANNEX.VI TRUE COPY OF THE STOP PAYMENT INSTRUCTION DATED 15-12-2010 ISSUED BY THE PETITIONER.** **ANNEX.VII TRUE COPY OF THE COMPLAINT DATED 26-12-2010 SUBMITTED BY THE PETITIONER.** **ANNEX.VII(A) ENGLISH TRANSLATION OF ANNEXURE VII** **ANNEX.VIII TRUE COPY OF THE COMPLAINAT ACCEPTANCE CERTIFICATE DATED 27-12-2010 ISSUED TO THE PETITIONER.** **ANNEX.VIII(A) ENGLISH TRANSLATION OF ANNEXURE VIII** **ANNEX.IX TRUE COPY OF THE COMPLAINT DATED 14-9-2011 SUBMITTED BY THE PETITIONER.** **ANNEX.X TRUE COPY OF THE RECEIPT DATED 16-9-2011 SUBMITTED BY THE PETITIONER.** ## **RESPONDENTS' ANNEXURES:** ## **/TRUE COPY/** ## **P.S.TO.JUDGE** **NIL** **sts** P.D.RAJAN, J ......................................... Crl.M.C.No.703 of 2012 ......................................... Dated 4[th ] April, 2014 ## ORDER **==> picture [28 x 12] intentionally omitted <==** This petition is filed under Section 482 Cr.P.C to quash Annexure I complaint in C.C.141 of 2011 of the Chief Judicial Magistrate Court, Alappuzha for offence punishable under Section 138 of N.I.Act by invoking the inherent jurisdiction. Petitioner is the accused in the above case, and the complaint was filed by the first respondent in Chief Judicial Magistrate Court, Alappuzha. Petitioner contended that prima facie case is not made out and hence trial of the petitioner is a mere abuse of the process of court. 2. The first respondent's case before trial court was that petitioner handed over a cheque dated 25.4.2000 to the 1[st] respondent for Rs.8 lakhs drawn on IOB Tower Branch, Chennai and when it was presented for encashment through IDBI Bank, Alappuzha, it was dishonoured for the reason “ payment stopped”. After Crmc 703/12 2 getting the dishonour memo, he issued a lawyer notice and after the receipt of lawyer notice, there was no repayment. In the circumstance, he filed Annexure A1 complaint before Chief Judicial Magistrate, Alappuzha. Hence petitioner approached this court with this petition. 3. Learned counsel appearing for the petitioner contended that there is no valid notice as per Section 138 (b) of N.I.Act. When there is no demand for payment of said amount made by giving a notice in writing to the drawer of the cheque, as contemplated under Section 138 (b) of the N.I.Act, no prosecution will lie. If the trial is proceeded, it is a mere abuse of process of court. 4. Before adverting to the rival contention advanced by both counsel, I may refer the relevant statutory provision of S.138 of Negotiable Instruments Act, which reads as under. “138 **. Dishonour of cheques 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 Crmc 703/12 3 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 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: 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 Crmc 703/12 4 bank regarding the return of the cheque as unpaid; and © the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice”. Section 138(b) speaks about giving of a notice demanding the cheque amount. It contemplates about service of notice and payment of cheque amount within a stipulated time. Therefore, it is clear that unless a notice is served u/s.138(b), a complaint is not maintainable. The parliament while enacting such a provision made arrangement for making a demand of the payment of the said amount of money. If there is no demand as stipulated, a complaint is not maintainable. If however in the notice excess amount is demanded, the notice must fail to converge the legal requirement u/s. 138(b) which is bad for a complaint. Crmc 703/12 5 ## 5. Apex Court in _**M/s. Rahul Builders**_ v. _**M/s.Arihant Fertilizers & Chemicals & Anr**_ . [2008 Crl. L.J. 452] held as follows: “8. Section 138 does not speak of a 15 days' notice. It contemplates service of notice and payment of the amount of cheque within 15 days from the date of receipt thereof. When the statute prescribes for service of notice specifying a particular period, it should be expressly stated. In absence of any such stipulation, it is difficult to hold that 15 days' notice was thereby contemplated. The High Court, therefore, was not correct in arriving at the aforementioned finding. 10. Service of notice, it is trite, is imperative in character for maintaining a complaint. It creates a legal fiction. Operation of Section 138 of the Act is limited by the proviso. When the proviso applies, the main Section would not. Unless a notice is served in conformity with Proviso (b) appended to Section 138 of the Act, the complaint petition would not be maintainable. The Parliament while enacting the said provision consciously imposed certain conditions. One Crmc 703/12 6 of the conditions was service of a notice making demand of the payment of the amount of cheque as is evident from the use of the phraseology “payment of the said amount of money”. Such a notice has to be issued within a period of 30 days from the date of receipt of information from the bank in regard to the return of the cheque as unpaid. The statute envisages application of the penal provisions. A penal provision should be construed strictly: the condition precedent wherefor is service of notice. It is one thing to say that the demand may not only represent the unpaid amount under cheque but also other incidental expenses like costs and interests., but the same would not mean that the notice would be vague and capable of two interpretations. A omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law.” 6. Learned counsel for the petitioner relied on the decision reported in _**Aniyan Thomas Chacko**_ v. _**Thevarvelil Bankers**_ [ 2006(4) KLT 245], in which it is Crmc 703/12 7 ## held as follows: “11. According to me, Ext.D4 notice, which evoked Ext.P8 reply, clearly shows that the petitioner wanted to take up the vital defect in the notice as the ground to claim exculpation from liability. He has stated specifically that such a cheque as described in the notice (drawn on Indian Overseas Bank, Pathanamthitta branch bearing the number 089583 for Rs.50,000/-) has not been issued by him to the complainant. I am not on the question whether the complainant, could still have successfully contended before the courts that Ext.D4 notice, notwithstanding the error in the description of the name of the bank, must be reckoned as a valid notice. In an appropriate case where such an error/inadequacy in the notice, though fundamental and crucial, does not result in any prejudice to the accused, it may be open to a court to hold that notwithstanding the error in the notice the same can be reckoned as a valid notice of demand. But it will be improper, according to me, to compel the complainant to pursue the prosecution further when such a vital defect was committed by his counsel in respect of the cheque in the notice of demand. He had time available with him, i.e., six months from the date of the cheque- within which he could present the cheque again and make a proper notice of demand if the dishonour was repeated by the bank. In such a situation, I am of opinion that it will Crmc 703/12 8 be unfair, unjust and unreasonable to insist that the complainant must pursue the prosecution on the basis of the fundamentally and vitally defective notice issued by his counsel. Different would be the situation if the indictee did not raise any objection and accepted the notice as a sufficient and satisfactory one. Ext.P8 reply specifically shows that the accused was capitalizing on the error committed by the counsel in Ext.D4 notice. That being so, the complainant cannot be found fault with for not taking a risk in respect of the prosecution based on Ext.D4 notice of demand, against which vital contentions were raised in Ext.P8 reply notice.” 7. Learned counsel appearing for first respondent strongly resisted the above contention and submitted that proper notice was issued but there is a clerical mistake in making a demand of the said amount. ## 8. Apex Court in _**Suman Sethi**_ v. _**Ajay K. Churiwal**_ [2000(2) SCC 380] held as follows: “The legislative intent as evident from Section 138 of the Act is that if for the dishonoured cheque the demand is not met within 15 days of the receipt of the notice the drawer is liable for conviction. If the cheque amount is paid within the above period or before the complaint is filed the legal liability under Section 138 ceases to be operative and for the recovery of other Crmc 703/12 9 demands such as compensation, costs, interests etc. separate proceedings would lie. If in a notice any other sum is indicated in addition to the amount covered by the cheque, that does not invalidate the notice.” 9. But in another decision, _**K.R. Indira**_ v. _**Dr. G. Adinarayana**_ [(2003) 8 SCC 300] apex court held as follows: “10. The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the said offence: (1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/in part of any debt or liability, (2) presentation of the cheque by the payee or the holder in due course to the bank. (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque. (4) giving notice in writing to the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, and (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the Crmc 703/12 10 cheque within 15 days of the receipt of the notice.” 10. In a valid prosecution u/s.138 of the Negotiable Instruments Act, I am of the view that service of notice is imperative for maintaining a complaint. The parliament while enacting Section 138 imposed a condition that, making a demand for payment of the cheque amount by giving a notice in writing is an essential one. Such notice has to be issued within the statutory period. The conditional precedent is to make a demand of the amount of cheque. A notice demanding huge amount than the dishonoured cheque amount would not serve the requirement. In Annexure-III a sum of Rs.80 lakhs was mentioned as due amount but actually borrowed amount is Rs.8 lakh only. Therefore, no demand was made by the 1[st] respondent as per Section 138(b) of N.I.Act. Unless a notice is given in agreement with 138(b) of the N.I.Act, a complaint would not be maintainable. In the present case, no demand was made for the payment of cheque amount. If trial is proceeded with Annexure-III notice, it Crmc 703/12 11 amounts to an abuse of the process of Court. 11. The inherent jurisdiction can be invoked for preventing abuse of the process of Court or to secure the ends of justice. Therefore, I am of the opinion that this is a fit case to invoke the inherent jurisdiction u/s.482 Cr.P.C and accordingly, Annexure-1 complaint and further proceedings pending before Chief Judicial Magistrate Court, Alappuzha are hereby quashed. Crl.M.C. is allowed. P.D.RAJAN, JUDGE lgk/acd