TMI Blog2022 (12) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of M/s Rahul Builders V Arihant Fertilizers Chemicals [ 2007 (11) TMI 399 - SUPREME COURT ] as relied upon by the petitioners considered the issue that failure on the part of complainant to serve proper notice, strictly in terms of proviso appended to section 138 of NI Act would lead to quashing of criminal proceedings. The perusal of demand notice 14.03.2013 reflects that although the respondents have also referred the dishonor of three cheques, subject matter of the present complaint but they have claimed the entire outstanding amount - The legal notice is not confined to the cheque amount. The respondents have not specifically asked for the payment of cheque amount within the stipulated period within the mandate of section 138 of NI Act. The cheque amount is not separately mentioned and identifiable from entire outstanding amount - In notice, an omnibus demand is made without specifying the cheque amount and as such notice dated 14.03.2013 failed to meet legal requirements of section 138(b) of NI Act. The demand notice accordingly is bad in law i.e., as per section 138(b) of NI Act. Impugned order and proceedings quashed. - CRL.M.C. 5900/2019 & CRL.M.A. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners towards part discharge of liability from time to time have already paid Rs Rs.47,64,953/- leaving behind unpaid balance of Rs.17,92,572.23/- The petitioners towards partial discharge of their contractual liability, issued 03 cheques bearing no. 419140, 419139 and 419138 dated 05.01.2013, 29.12.2012, 25.12.2012 drawn on State Bank of Patiala, Baroti, Tehsil- Kasauli, District Solan, Himachal Pradesh amounting to Rs 2,00,000/-, Rs 50,000/- and Rs.1,00,000/-, respectively. The respondents presented the said cheques in the Corporation Bank on 08.03.2013 for encashment but returned back unpaid due to the reason Payment Stopped by the Drawer vide return memo dated 08.03.2013. The respondents also served a legal notice dated 14.03.2013 to the petitioners. The petitioners despite service of legal notice did not make payment of cheque amount. The respondents being aggrieved, filed the complaint bearing CC no. 17879/2016. The trial court vide impugned order dated 28.06.2018 ordered for giving notice under section 251 of the Code to the petitioners. 3. The petitioners being aggrieved, filed the present petition to challenge the impugned order on the grounds that demand notice was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 bank regarding the return of the cheque as unpaid; and (c) 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. Explanation.- For the purposes of this section, debt or other liability means a legally enforceable debt or other liability. 6. The Supreme Court in K. Bhaskaran V Sankaran Vaidhyan Balan AIR 1999 SC 3762 regarding basic ingredients of offence punishable under section 138 observed as under:- The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. Following are the acts which are components of the said offence : (1) Drawing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a quashing petition, should ordinarily proceed on the basis of the averments in the complaint and the defense of the accused cannot be considered at this stage as held in Sampelly Satyanarayan Rao V Indian Renewable Energy Development Agency Ltd, 2016(10) SCC 458 K.R. Indira V Dr. G. Adinarayana 2003 (8) SCC 300. 9. The Supreme Court in Smt. Nagawwa V Veeranna Shivalingappa Konjalgi, 1976 (3) SCC 736 regarding eventualities when a magistrate should not take cognizance observed as under:- (1) where the allegations made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complainant does not disclose the essential ingredients of an offence which is alleged against the accused; (2) where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is a sufficient ground for proceeding against the accused; (3) where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rupees twenty two thousand only) towards cost / fee of this notice; failing which, we have standing instructions to institute appropriately legal proceedings - both civil and criminal - against you, in the court of law and without any further reference to you in this regard. 11. The issue which needs judicial consideration and adjudication is that the legal notice dated 14.03.2013 is bad in law for the purpose of complaint under section 138 of NI Act as in the said notice, the respondents have claimed the entire outstanding amount of Rs.17,52,572.23/- from the petitioners instead of raising claim of cheque amount i.e. Rs.3,50,000/- and whether the respondents were required to raise a demand of Rs.3,50,000/- in the demand notice dated 14.03.2013 for the purpose of filing the present complaint under section 138 of NI Act. 12. It is accepted proposition of law that a notice has to be read as a whole and in the demand notice, a demand for cheque amount is required to be made. If no such demand is made, then the demand notice would not pass the test of legal requirement of section 138 NI act. If in addition to the cheque amount, the claims of interest, cost etc. are also made, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminal proceedings. 13.1 In this case, there was an outstanding payment of Rs.8,72,409/- towards appellant and due to this reason, the respondent no.1 issued a cheque amounting to Rs.1,00,000/- in favour of the appellant which got dishonored on the ground that the account was closed. Thereafter, the appellant sent a notice to the respondent no. 1 wherein, the appellant requested the respondent no. 1 to remit the payment of pending bills within 10 days, failing which suitable action would be taken. The respondent no. 1 despite notice, did not make the payment and accordingly the complaint under section 138 of NI Act was filed. The respondent no. 1 filed an application for rejection of the complaint on the ground that the legal demand notice issued by the respondent no. 1 was not valid. The application was rejected by the concerned court. Thereafter, the revision petition filed before the District and Session Judge was also got dismissed. However, the High Court under section 482 Cr.P.C has quashed the criminal proceedings by holding that 15 days notice was not served upon the respondent no.1 and further in the demand notice the appellant being the complainant has demanded the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said demand. Pursuant thereto, it was to offer the entire sum of Rs. 8,72,409/-. No demand was made upon it to pay the said sum of Rs. 1,00,000/- which was tendered to the complainant by cheque dated 30.04.2000. What was, therefore, demanded was the entire sum and not a part of it. 12. On this aspect of the matter, we may consider K.R. Indira v. Dr. G. Adinarayana [(2003) 8 SCC 300] wherein this Court upon noticing Suman Sethi (supra) stated the law, thus: ...However, according to the respondent, the notice in question is not separable in that way and that there was no specific demand made for payment of the amount covered by the cheque. We have perused the contents of the notice. Significantly, not only the cheque amounts were different from the alleged loan amounts but the demand was made not of the cheque amounts but only the loan amount as though it is a demand for the loan amount and not the demand for payment of the cheque amount, nor could it be said that it was a demand for payment of the cheque amount and in addition thereto made further demands as well. What is necessary is making of a demand for the amount covered by the bounced cheque which is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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