K. Madhu And Another v. M/S. Omega Pipes Ltd. And Another

1. What is meant by the expression ‘giving a notice in writing, in the context in which if is used in clause (b) of the proviso to Section 138 of the Negotiable Instruments Act, 1881 (for short) ‘the Act’)? According to the petitioner, there is no ‘giving’ of notice until notice is delivered to the drawer of the cheque. If the said contention deserves acceptance, the complains filed against she petitioner is liable to be dismissed. As the judicial magistrate of first class took cognizance of the offence upon the institution of complaint and issued process to the accused he has filed this petition under Section 482 of the Code of Criminal Procedure for quashing the proceedings.

2. The case spelled out in the complaint in short, is that the cheque issued to the complainant for Rupees two lekhs was returned dishonored due to insufficiency of funds in the account and the bank intimated the fact to the complainant through memo dated 19-5-1993; the complainant sent notice by registered post to the accused on 21-6-1993 demanding payment of the amount and the notice was received by the accused on 24-6-1993.

3. If date of receipt of notice is the crucial date in the process of “giving nodes” as envisaged in clause (b) of the proviso to Section 138 of the Act, the notice should have been received at least on 23-6-1993. The said clause reads thus:

‘Provided that nothing contained in Ibis section shall apply unless—

(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 chequs, within fifteen days of the receipt of information by him from the bank regarding the return of the chequs as unpaid;”

4. Shri K. Kunhirama Poduval, Advocate, who argued the case for the petitioner, relied on the following observations of the Supreme Court in Narasimhiah v. Singri Gowda (AIR 1966 S.C 33):

“Giving of anything as ordinarily understood in the English language is not complete unless it has reached the hands of the person to whom it has to be given. In the eye of law however “giving” is complete in many matters where it has been offered to a person but not accepted by him. Tendering of a notice is in law therefore giving of a notice even though the person to whom it is tendered refuses to accept it. We can find however no authority or principle for the proposition that as soon as the person wish legal duty to give the notice dispatches the nodes to the address of the person to whom it has to be given, the giving is complete”

5. Learned counsel for the petitioner invited my attention to the decision of a Division Bench of this court which has followed the said observations (Govinda Rao v. Addl. Secretary, 1987 (1) K.L.T 253). Bhasharan Nambiar, J. has observed in the decision that ‘the expression (giving of notice) understood in the common parlance would convoy that the notice must be served or tendered in order to complete the process of giving of such notice’.

6. The aforesaid interpretation is particularly relevant in the context in which the expression ‘giving of notice’, has been used in the respective enactments. In Narasimhiah's case the Supreme Court considered the scope of a notice contemplated in the proviso to Section 27(3) of the Mysore Town Municipalities Act, 1951 in connection with a no confidence resolution moved against the President of a municipality. As per that proviso, no such resolution shall be moved unless at least fifteen days notice has been given of the intention to move the resolution. In Govinda Rao's case the division bench of this court considered the scope of a notice contemplated in Section 79 of the Gold Control Act, 1968, in, which adjudicatory proceedings are not to commence unless the owner of the contraband “is given a notice in writing”. In both provisions the expression has been used in passive voice while in clause (b) of Section 138 of the Act is used in active voice. That apart, the period mentioned in the provisions (considered in the two decisions) commences only from the date of notice being given whereas the period of fifteen days mentioned in Class (b) of Section 138 of the Act commences far earlier than notice.

7. The question is whether the said interpretation can be imported to the context in which the expression is used in clause (b) of the proviso to Section 138 of the Act. If a strict and literal Interpretation would result in defeating or frustrating the purpose of giving a notice to the drawer, if must be avoided. To salvage the purpose a liberal interpretation is justified. In Maxwell's “Interpretation of Statutes” learned author has pointed out that “provisions regarding the giving of notice often receive a liberal interpretation”. (Page 99 in the 12th Edition). In Black's Law Dictionary “giving of notice” is distinguished from “receiving of notice”. ‘A person ‘notifies’ or ‘gives’ notice to another by taking such steps as may be reasonably required to inform the other in ordinary course whether or not such other actually comes to know of it”. A person “receives” a notice when it is duly delivered to him or at the place of business (vide page 958-5th Edition). So the guideline can be collected from the setting or context and the object sought to be achieved through such notice and the practical incidence thereof. Liberal interpretation is needed in the context as for the person who has the statutory obligation to give notice since he is presumed to be the loser in the transaction for whose interest the very provision is made.

8. In clause (b) of the proviso to Section 138 of the Act, the payee has the statutory obligation to “make a demand by giving notice”. Collocation of the words conveys the requirement to be complied with by the payee in the special circumstances. The thrust in the clause is on the need to “make a demand”. It is only the mode for making such demand which the legislature prescribed to be done by “giving a notice”. If has to be borne in mind that the time for giving such notice ends with the expiry of 15 days of receipt of information from the bank ??? return of the cheque. If actual receipt of notice is the crucial point in giving the notice, when shall the payee send the notice? Is it enough that he sends it just two or three days before the and of the said period since the postal authority would take the notice to the addressee with reasonable dispatch and promptitude.

9. In the above context it is useful to know that in clause (c) of the proviso the drawer of the cheque is given fifteen days from the date “of receipt of the said notice” for making payment. This affords clear indication that “giving notice” in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment. The payee has to perform the former process by sending the notice to the drawer in his correct address. If receipt or even fender of notice is indispensable for giving the notice in the context envisaged in clause (b) an evader would successfully keep the postal article at bay at least till the period of ??? days expires. Law shall not help the wrong doer to take advantage of his tactics. Hence the realistic interpretation for the expression “giving notice” in the present context is that, if the payee has dispatched notice in the correct address of the drawer reasonably ahead of the expiry of fifteen days, if can be regarded that be made demand by giving notice within the statutory period. Any other interpretation is likely to frustrate the purpose for providing such a notice.

10. In view of the said interpretation the complaint is not liable to be dismissed for want of notice contemplated in clause (b) to the proviso to Section 138 of the Act. Accordingly the Criminal Miscellaneous Case is dismissed.