The Allahabad High Court allowed an application filed under Section 482 Cr.P.C. seeking to quash the impugned order dated 25.4.2023 passed by the Additional Court u/s 203 CrPC, in a complaint under Section 138 of the Negotiable Instruments Act.
The court observed that to make a valid demand notice as per the proviso of section 138 (b) of the Act, 1881, the notice should mention in a separate portion the due amount of bounced cheque, and in another portion, the other amounts which are additionally claimed i.e., the interest of loss, cost, etc.
Brief Facts:
The applicant presented the cheque for Rs. 50 lacs on 10.05.2022, after opposite parties had given clearance but the same was dishonored vide bank return memo dated 03.08.2022, recording that the cheque was dishonored because of "Insufficient Funds".
The petitioner apprised the opposite parties about the dishonor of the said cheque and expressed his displeasure regarding the manner in which the opposite parties had deceitfully exacted a huge amount of Rs. 56 lacs from the petitioner. Impertinently, the opposite parties maintained that things had got delayed because of the aftereffects of COVID, and the funds will soon be arranged for clearance of the cheques.
The learned trial court dismissed the complaint under section 203 Cr.P.C., with a perverse finding that the demand notice served to the accused persons is bad. The trial court recorded that a demand only for the cheque amount could have been made and not of a further Rs. 50 lacs and interest with quarterly rests; and, as such the notice issued on behalf of the complainant was not in compliance with the provisions of section 138 (b) of the Negotiable Instrument Act. It was held that the demand notice is illegal and does not satisfy the ingredients of section 138 (b) and (c) of the Act, 1881, and hence no offence had been committed and consequently there was no ground to summon the accused persons and the complaint was dismissed under Section 203 Cr.P.C.
Contentions of the Applicant:
The Learned Counsel for the applicant argued that the demand notice dated 04.08.2022 is wholly legal as in the demand notice dated 04.08.2022 there is a break-up of the cheque amount of Rs. 50 lacs, and another amount of Rs. 50 lacs has been mentioned by virtue of the provisions contained in Section 138 of the Act 1881, along with 21 percent interest with quarterly interests w.e.f. 05.10.2022. Further, he contended that the trial court rejected the complaint of the Negotiable Instrument Act, 1881 in a mechanical manner vide order dated 25.4.2023 and it is liable to be quashed.
Contentions of the Respondent:
The Learned Counsel for the Respondent submitted that there is no illegality, irregularity, or perversity in the impugned order dated 25.4.2023 passed by the trial court and thus, it is not liable to be quashed.
Observations of the Court:
The Court observed that the provision of Section 138 (b) of the Act, 1881 deals with the demand notice which is given by the holder of the cheque. When we read Clause (b) and ( c) of the proviso to Section 138, there is specifically mentioned, a whole word means "said amount of money". This is referred to as the words "payment of any amount of money," which means the cheque amount. so, in the notice under clause (b) to the proviso, the holder can demand only the cheque amount.
The Court remarked that to make a valid demand notice as per the proviso of section 138 (b) of the Act, 1881, the notice should mention in a separate portion the due amount of bounced cheque, and in another portion, the other amounts which are additionally claimed i.e., the interest of loss, cost, etc. Hence, in a demand notice, if other amounts are mentioned in a separate portion in detail, the said notice cannot be faulted in a legal term of Section 138 (b) of the Act, 1881.
The decision of the Court:
The Allahabad High Court, allowing the application, held that the aforesaid impugned order 25.4.2023 is hereby set aside and the matter is remanded back to the trial court to pass a fresh order after hearing the party.
Case Title: Prashant Chandra v State Of U.P & Ors.
Coram: Hon’ble Justice Suresh Kumar Gupta
Case no.: APPLICATION U/S 482 No. - 4587 of 2023
Advocate for the Applicant: Mr. Vivek Kumar Rai
Advocate for the Respondent: G. A.
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