Jaspal Singh vs Paramjeet Singh

A complaint came to be filed under Section 138 of the Negotiable Instruments Act (Act for short) in the court of learned Special Municipal

Magistrate, Jammu on 30051998 by Shri Paramjit Singh, the complainantrespondent herein, against Shri Jaspal Singh accusedpetitioner herein.

The Ld. Magistrate took the cognizance and issued the process. By medium of an application, the accusedpetitioner sought dismissal of the

complaint alleging violation of proviso (b)to Section 138 because of the absence of the actual date in the complaint with respect to the demand for

the payment. The motion did not find favour with the Ld. Magistrate and was rejected by order dated 03032000. Against this order a revision was

taken before the Ld. Additional Session Judge Jammu, who made the reference for quashing the same.

It transpires from the complaint that the petitioner had approached the complainant for loan which was advanced to him and towards the

satisfaction of such debt the complainant was given a cheque dated 01031998 (annexure PA to the complaint) for Rs. 21 lacs, favouring the

complainantrespondent drawn on the Bank of India. The cheque was presented by the respondent to his Banker, the State Bank of India Railway

Station Branch Jammu (SBI for short) which was forwarded to the Bank of India by SBI seeking transfer of the amount to be credited to the

respondent's account. It was dishonoured by the Bank of India with an endothersement ""insufficient funds"" vide ""CHEQUE RETURN MEMO

dated 16031998 (annexure PC to the complaint). Consequently, the SBI wrote a memo to the respondent on 04041998 (annexure PB to the

complaint) communicating its inability to obtain the payment for the reasons reflected in the memo of the Bank of India. The postal cover which

contained the memo dated 04041998 is also annexed with the complaint as annexure PC1. It reveals that it was despatched under No. 4034 on

15/4 by the SBI and was received in the post office on 16041998. These documents and the factual assertions made in the complaint prompted

the Ld. Magistrate to issue the process which is sought to be set at naught by reference in question because of twofold reasons, the one being

omission on the part of the complainant to name the date in the complaint regarding demand for payment and the other filing of the complaint

beyond 15 days period. To appreciate the controversy. Section 138 of the Act is extracted hereunder:

Dishonour of cheque for insufficiency, etc., of funds in the account Where any cheque drawn by a person on an account maintained by him

with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or

other liability is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour

the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be

deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term

which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless

(a) the cheque has beenpresented to the 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 fifteen 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.

A plain reading of the proviso (b) reveals that a demand for the payment of amount of money has to be made to the drawer of the cheque by

giving a written notice within fifteen days from the date of receipt of information regarding the return of the cheque as unpaid which would mean

that the period of fifteen days stipulated by the proviso has to begin from the date the payee or the holder of the cheque receives the information of

dishonour. The provision makes it clear in unambiguous terms that the demand through a written notice is a mandatory requirement but to give the

definite date in the complaint on which notice was given to the drawer is not a mandatory obligation. Obviously, omission to name the date in the

complaint is not a ground tenable in law which would clothe the Ld. Magistrate with the power to refuse the process and cognizance, provided the

material placed before the Ld. Magistrate prima facie reveals that the demand for payment was made in writing, of course, within stipulated period

of fifteen days which period has to begin from the date information regarding the return of the cheque as unpaid is received by the payee or the

holder in the due course of the cheque (emphasis supplied) and in my opinion no other view is possible.

A confusion appears to have erupted mainly because the communication of the SBI (annexure PB) is dated 04041998 whereas the notice

demanding the payment was despatched through registered post by the complainant on 02051998 (annexure P6). Recksoned as such, the Ld.

Additional Session Judge has held that the notice is beyond time, therefore, violative of Sub Section (b) of Section 138 of the Act. Is such finding

called for the factual scenario emerging from the complaint and the material placed before the Ld. Magistrate ""assumes significance.

Admittedly, in the complaint it is not stated as to on which date the cheque was returned unpaid to the respondent but the complainant has

placed the documentary evidence before the Ld. Magistrate to substantiate his contention that the information regarding return of the cheque

unpaid was received by him by end of the month of April, 1998. He has also appended the postal cover which shows that it was received in the

post office on 16041998 which fact is evinced by stamp of the post office affixed on the postal cover. He has also annexed a copy of the written

demand with the complaint (annexure PD) as also the receipt No. 2112 dated 02051998 (annexure PF) to show that the demand notice was sent

by registered post on 02051998. It is on the strength of such documentary evidence that the Ld. Magistrate has issued the process. It is pertinent

to observe that at the initial stage when the Magistrate has to decide to take or not to take cognizance, he is undoubtedly required to see as to

whether an offence is prima facie made out and for such exercise he has to take the complaint and other material placed before him in its entirety

into account. He has not to sift the evidence but has to take it into consideration on its face value. Adverting to the facts of the case, suffice it to say

that a prima facie appraisal of the material placed before the Ld. Magistrate being sufficient to justify the cognizance, therefore, it is not possible to

disturb the order of the Ld. Magistrate.

The learned counsel for the petitioner has relied upon the judgment of this court in Inderjeet Kour versus M/s. Gandotra Trading and Leasing

Corporation KLJ 1998 page 402. No doubt in this case the complaint was quashed because date of receipt of notice was not reflected and same

course is sought to be adopted by learned counsel for the petitioner in the case on hand. How far the judgment supra favours his contention needs

to be seen in the Jight of para 15 of the same judgment, which is reproduced hereunder:

.....As already discussed, there is no pleading muchless proof in preliminary evidence regarding the date of service of notice, the application filed

by the petitioner for dropping the proceedings could not have been dismissed.

It is manifest from the aforementioned observation that there was no proof in the preliminary evidence regarding the date of service of notice

within the period of fifteen days whereas proof is not wanting in this case, therefore, the judgment supra does not help the accusedpetitioner. As a

matter of fact. the judgment impliedly provides for taking the material placed before the court in support of complaint into consideration while

considering issuance of process. Thus contention fails.

It needs to be observed that much emphasis has been Laid by the Ld. Additional Session Judge on the requirement of demand notice, but it

appears that neither the Ld. Magistrate nor the Ld. Additional Session Judge were confronted with such issue. In fact the crucial question which

had arisen before the Ld. Magistrate was whether absence of the reflection of the specific date in the complaint regarding demand for payment

would render the complaint liable to dismissal, which I have replied in the negative, therefore, interpretation made by the Ld. Additional Session

Judge is not sustainable. It needs a mention that the view point of the Ld. Additional Session Judge tantamounts to a proposition that the period

shall begin from the date the communication is drafted and if it is accepted, the very object of the Section is likely to be frustrated because it may

not be that difficult for an evil minded drawer to delay the despatch of the letter after having drafted it.

Be it placed on record that it was urged by the Learned counsel for the respondent that the demand notice was sent by registered post, which

was not returned unserved. On such statement he pleads presumption to the effect that the accused petitioner had received it. In the given facts of

the case, the presumption of deemed service does arise under Section 27 of the General Clauses Act, consequently the requirement of Section

138 of the Act has to be deemed to have been complied with for purposes of cognizance because at such stage, the Magistrate is not in a position

to record a definite finding which course is available to him only after evidence is recorded during the trial. I may hasten to add that such

presumption is rebuttable and nothing prevents the accused to plead and establish that the complainantrespondent did not send the notice to him

provided such a stand is available to him.

In view of the factual and legal position discussed hereinabove, it is not possible to accept this reference and the inevitable result is its failure

and rejection, which I accordingly do. Resultantly, the order dated 03032000 passed by Mr. R.S. Jain the Ld. Magistrate is upheld. The record

shall be remitted forthwith to the court of Special Municipal Magistrate Jammu for further proceedings in accordance with law. The parties shall

enter appearance on 25/11/2000 before the court below.

No order as to costs.