Shyam Lal vs State of Uttaranchal and Another

Hon''ble Servesh Kumar Gupta, J.—Since all the aforetitled three petitions involve the same question of law having identical facts and the contesting parties are also the same in all the three petitions, hence, these are being decided by this common judgment and order.

Heard Mr. M.K. Goyal, Advocate, for the applicant. None appeared for the private respondent no. 2 even in the revised call though he has been served sufficiently. Also perused the papers available on record.

The pivot of the dispute between Uma Kant Sharma (respondent no. 2) and Shyam Lal (applicant petitioner) relates back to a transaction of sale pertaining to a dwelling house owned by Shyam Lal at Jawalapur, Haridwar. Uma Kant paid Rs. 1,21,000/- in cash to Shyam Lal on 4.4.2004 in presence of a witness Mange Ram. For some reason, the transaction did not materialize and it failed to attain the finality. So, Shyam Lal, in order to return the aforesaid advance money, issued three cheques to Uma Kant. Cheque dated 12.4.2004 was for Rs. 41,000/-, cheque dated 10.4.2004 was for Rs. 40,000/- and cheque dated 11.4.2004 was for Rs. 40,000/-. All these cheques were drawn at Punjab National Bank, Jawalapur pertaining to the account of CA/C2002 held by Shyam Lal with the said branch. These cheques were presented for encashment by Uma Kant Sharma on 27.8.2004. The reason for delay of almost four and half months in presenting these cheques for encashment was that Shyam Lal, drawer of these cheques, had requested to Uma Kant Sharma to produce these cheques after few months as he was having insufficient amount in his account at that time. Uma Kant acceded to the request of Shyam Lal and, accordingly, presented these cheques for encashment on 27.8.2004, but all the three cheques were dishonoured by the bank for want of sufficient fund. After one month i.e. on 27.9.2004, Uma Kant again presented these cheques for encashment, but this time too, these cheques met the same fate for the exactly same reason. Uma Kant got the information from the bank on the same day i.e. on 27.9.2004. Thereafter, he sent three different notices separately in respect of the three cheques u/s 138(b) of the Negotiable Instruments Act (for short, the Act) through his Advocate asking Shyam Lal to return the unpaid amount under the cheque. But in the payment paragraphs of these notices, he mentioned cumulative amount of Rs. 1,21,000/-, to be paid by Shyam Lal, instead of the value of the concerned cheque for which the notice was being sent. Shyam Lal did not make the payment to Uma Kant. Therefore, Uma Kant filed three separate complaints on 14.12.2004 to recover the unpaid amount under the cheques, with the averments mentioned above. Thereafter the learned Magistrate has passed the cognizance order dated 11.1.2005 in each of the complaints.

Learned Counsel for the applicant argued that the impugned cognizance orders cannot be sustained inasmuch as the complainant did not mention the correct unpaid amount under the concerned cheque and he demanded payment of the cumulative amount of Rs. 1,21,000/- through each of the three demand notices. He also submitted that even these complaints were filed belatedly. Learned Counsel cited two precedents of the Hon''ble Apex Court delivered in case of K.R. Indira Vs. Dr. G. Adinarayana, and Rahul Builders Vs. Arihant Fertilizers and Chemical and Another, .

In the judgment delivered in the case of K.R. Indira v. Dr. G. Adinarayana, the Hon''ble Apex Court has held that where there was no specific demand made for payment of the amount covered by the cheque, but the demand notice was for the entire loan amount, then such a notice is not valid one as envisaged u/s 138(b) of the Act.

In the present case too, the notices, in question, are imperfect not because these had any further or additional claims as well but because of the fact that these notices did not specifically contain any demand for payment of the correct amount of the concerned cheque, rather cumulative amount of all the three cheques has been mentioned in all the three notices, the non-compliance with such a demand only being the incriminating circumstance which expose the drawer for being proceeded against u/s 138 of the Act.

In the second precedent delivered in the case of Rahul Builders v. Arihant Fertilizers & Chemicals, the Hon''ble Apex Court has observed as under:

Service of a 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. Parliament while enacting the said provision consciously imposed certain conditions. One 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 15 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. An omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law.

The another important aspect of the controversy is that as per the provisions envisaged u/s 138(c) read with Section 142(b) of the Act, the complaint should have been filed within 45 days from the date of issuance of the demand notice. In the instant cases, the demand notices were issued on 26.10.2004. This way, the complaints, at the most, should have been filed by Uma Kant Sharma by 11th December, 2004, whereas these complaints were filed on 14.12.2004 i.e. three days after the stipulated time. Thus, all the three complaints were barred by time limitation as has been prescribed by the Act.

Thus, on both the aforementioned scores, these petitions have merits, which deserve to be allowed. Accordingly, all the three petitions are allowed. Cognizance orders dated 11.1.2005, separately passed in all the three Complaint Case No. 1158/2004, 1157/2004 & 1156/2004 as well as the complaints themselves are hereby quashed. All the pending miscellaneous applications stand disposed of accordingly.

Registry is directed to inform the court concerned accordingly.