1. This criminal petition is filed under Section 482 Cr.PC, seeking quashing of the proceedings in Calendar Case No.591 of 1998, pending on the file of the XV Metropolitan Magistrate, Hyderabad.
2. The petitioner herein is the sole accused in the said calendar case, which was instituted on the complaint given by the 1st respondent herein to punish the petitioner for the offence under Section 138 of the Negotiable Instruments Act (for short
"the Act").
3. The case of the 1st respondent-complainant, is that towards discharge of equated monthly instalments of the loan payable by the petitioner-accused, he issued a cheque dated 1-5-1998 for Rs.9,972/-. When that cheque was presented to the drawee bank for realisation, it was returned with an endorsement "insufficiency of funds" by memo dated 12-5-1998. Immediately, the complainant issued a legal notice on 19-5-1998 calling upon the petitioner to pay the amount. Since there was no response from the petitioner, the complaint was filed. Along with the complaint a copy of the notice issued by the complainant was also filed.
4. After taking cognizance of the offence, the learned Magistrate issued process to the petitioner. Thereupon, he filed a discharge petition, which was dismissed by the learned Magistrate. The petitioner then filed the present petition.
5. The main contention advanced by the learned Counsel for the petitioner, Sri G. Narendra Raju, is that in the notice issued to the petitioner under Section 138(b) of "the act" the amount that was demanded is not the amount covered by the cheque, which was dishonoured. Since the requirement of Section 138(b) of "the act" is thus not satisfied, the proceedings are liable to be quashed. In support of his contention, the learned Counsel relied upon the decision of the Supreme Court Suman Sethi v. Ajay K. Churiwal and another, , and also the decision of the Kerala High Court in Raj v. Rajan, 1997 (1) ALT (Crl) 359 (Ker).
6. Counsel for the 1st respondent-complainant, Sri Raghunandan, strongly disputed the aforesaid contention.
7. In Kusum Ingots and Alloys Limited v. Pennar Peterson Securities Limited, , the Supreme Court held that 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 a 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 of which it is drawn or within the period of its validity whichever is earlier;
(ii) that cheque is returned by the bank unpaid, either because of 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".
8. From the aforementioned legal position, it is clear that one of the main ingredients of section 138 of "the act" is demanding payment of the cheque amount by the payee or holder in due course after the cheque was dishonoured. Section 138(b) further mandates that the demand for payment must be for the
"said amount of money".
9. Now the question is what exactly the meaning of the word ""said amount of money"". This has been considered by the Supreme Court in Simian Sethi (supra), wherein their Lordships held at para 6 of the report thus:
"We have to ascertain the meaning of the words '"said amount of money"' occurring in clauses (b) and (c) to the proviso to Section 138. Reading the section as a whole we have no hesitation to hold that the above expression refers to the words 'payment of any amount of money' occurring in main Section 138 i.e., the cheque amount. So in notice, under clause (b) to the proviso, demand has to be made for the cheque amount".
It was further held at Para 8 of the said report thus:
"It is well settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the 'said amount' i.e., cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement."
10. Considering the very same question, the Kerala High Court in Raj (supra) also held that the demand for payment in notice under Section 138(b) must be for the amount covered by the cheque.
11. From the aforementioned legal position, it is clear that while demanding payment by issuing a notice under Section 138(b) of "the act", the payee or the holder in due course must demand payment of the amount covered by the cheque. If the demand is for a lesser amount or for an higher amount not covered by the cheque, which was dishonoured, then the prosecution must fail as the statutory requirement of Section 138(b) is not fulfilled.
12. In the case on hand, the amount covered by the cheque, which was dishonoured by the bank is Rs.9,972/-. But in the notice issued under Section I38(b) of "the Act" the complainant failed to make any demand for payment of the said amount, instead it was stated in the notice that the cheque, which was dishonoured, was issued for Rs.3,871/-. From this it is clear that the notice clearly fell short of the statutory requirement under Section 138(b) of "the act".
13. Counsel for the 1st respondent-complainant, Sri Raghunandan, however, submits that the amount of Rs.3,871/-mentioned in the notice is a mere typographical error. Instead of mentioning Rs.9,972/-, which is the cheque amount, Rs.3,871/- was typed by mistake. In his submission, the proceedings are not liable to be quashed merely on this technical ground.
14. I am unable to agree with this contention. As already noted, giving notice and demanding payment of the amount covered by the dishonoured cheque is one of the main ingredients of the offence under section 138 of "the act". If that main ingredient is missing, no offence is made out under Section 138. Furthermore, as already held by this Court in H.L. Agarwal v. Rakesh Agarwal, 1997 (1) ALT (Crl.) 678, the offence under section 138 of "the act" "being a technical offence" all the technical formalities as contemplated under section 138 of "the act" must be complied with.
15. In view of the aforementioned discussion, it should be held that the complaint filed by the 1st respondent-complainant failed to disclose, prima facie, an offence under section 138 of "the act". The petitioner-accused, therefore, cannot be prosecuted and the criminal proceedings initiated against him have to be quashed.
16. Criminal Petition No.215 of 2001 is, therefore, allowed and the proceedings in CC No.591 of 1998, pending on the file of the XVth Metropolitan Magistrate, Hyderabad, are quashed.
CrLP.No.214 of 2001:
17. This petition is filed under Section 482 Cr.PC, to quash the order dated 27-11-2000 passed by the said Magistrate in Crl.MP No. 1594 of 2000 in the said calendar case, i.e., CC No.591 of 1998, refusing to permit the petitioner-accused to be represented by an advocate on the ground that the petition is not maintainable.
18. In view of the aforesaid order passed in Criminal Petition No.215 of 2001, no further orders need be passed in this petition. It is accordingly disposed of.
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