2024 (6) TMI 434 - HC - Indian Laws

Dishonour of cheque for insufficiency of funds - challenge to acquittal of accused u/s 255(1) of Cr. P. C. - issuance of statutory notice - HELD THAT - The period for issuance of statutory notice is from the date of receipt of information from the Bank regarding the return of the cheque as unpaid and not from the exact date of dishonour of the cheque and therefore the finding of the trial court in this regard is not legally sustainable. The learned counsel for the first respondent also raised a contention that in Exhibit P3 notice the complainant has demanded interest for the cheque amount and therefore notice is vague. But it is found that the complainant has specifically stated the cheque amount in Exhibit P3 notice and only because the complainant has also mentioned about his legal right for interest in the notice it cannot be held that the notice is invalid. In Suman Sethi v. Ajay K. Churiwal and another 2000 (2) TMI 822 - SUPREME COURT the Honourable Supreme Court held If in a notice while giving up break up of the claim the cheque amount interest damages etc. are separately specified other such claims for interest cost etc. would be superfluous and these additional claims would be severable and will not invalidate the notice. If however in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque notice might well fail to meet the legal requirement and may be regarded as bad. As noticed earlier the complainant has specifically mentioned the cheque amount in Exhibit P3 notice and only because he also mentioned about his right for legal interest it cannot be held that the notice is invalid as the said additional claim for legal interest is severable from the demand for the cheque amount. In the above circumstance the finding of the trial court is liable to be set aside. The impugned judgment is set aside and the accused is convicted under Section 138 of the NI Act and sentenced to undergo imprisonment till the rising of the court and to pay a compensation of Rs.70, 000/- to the complainant under Section 357(3) Cr.P.C with the default clause that he shall undergo simple imprisonment for a period of four months - appeal allowed.

Summary

Issues:
- Appeal against acquittal under Section 138 of the Negotiable Instruments Act
- Failure to prove exact date of presentation and dishonour of the cheque
- Validity of statutory notice issued within the statutory period
- Interpretation of Section 138 of the NI Act regarding the period for issuance of statutory notice
- Contention regarding demand for interest in the statutory notice

Analysis:
The judgment pertains to an appeal against the acquittal of the accused under Section 138 of the Negotiable Instruments Act. The complainant alleged that the accused issued a cheque in discharge of a debt but it was dishonored due to insufficient funds. The trial court acquitted the accused citing lack of evidence regarding the exact date of presentation and dishonour of the cheque, and failure to prove timely issuance of statutory notice.

The appellant argued that the cheque and dishonour memo clearly indicated timely presentation, and the statutory notice was issued within the stipulated period. The respondent contended that the complainant should have provided ledger extract to establish the date of dishonour, and the demand for interest in the notice rendered it vague.

The court analyzed Section 138 of the NI Act, emphasizing that the period for statutory notice commences from the date of receipt of information about the cheque's return as unpaid, not the exact dishonour date. Citing relevant case law, the court held that mentioning interest in the notice does not invalidate it if the cheque amount is specifically demanded. The court concluded that the trial court's findings were legally unsustainable, setting aside the acquittal.

Consequently, the appeal was allowed, and the accused was convicted under Section 138 of the NI Act. The accused was sentenced to imprisonment and ordered to pay compensation to the complainant, with a default clause for non-payment. The accused was granted a specific time frame to fulfill the compensation requirement.

In summary, the judgment highlights the importance of timely issuance of statutory notice under Section 138 of the NI Act and clarifies the interpretation of relevant legal provisions. It underscores the need for specific demands in statutory notices and the severability of additional claims like interest.