L. Mani vs Kandan Finance

Thangamani, J.—The respondent preferred a complaint in the Court of the Judicial Magistrate-I, Kancheepuram, against the petitioner under

138 and 142 of the Negotiable Instruments Act, 1881, alleging that the cheque issued by the petitioner on February 14, 1990, for Rs. 5,000 in

repayment of the amount borrowed from him was dishonored owing to Insufficiency of funds in the account of the petitioner in the bank with a

memorandum ""refer to drawer"". The complainant sent a registered notice though his lawyer within fifteen days of the receipt of the information from

the bank regarding the return of the cheque as unpaid as required by the statute. However, the notice was returned on July 3, 1990, and the

petitioner had failed to make a payment within fifteen days of the receipt thereof.

The petitioner seeks to quash the proceedings on the sole ground that the complainant has not satisfied the requirement of the statute in that no

notice of the dishonour of the cheque has, been served on him. As the mandatory requirements of section 138(b) of the Negotiable Instruments

Act, 1881, are not complied with, the complaint does not lie. The proviso to section 138 reads that :

Nothing contained in this section shall apply unless - .......

(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;

We find from the records that the notice sent by the complainant to the petitioner has been returned with two endorsements. The first

endorsement dated June 29, 1990, reads ""gone out two days deposit"". The next endorsement dated July 5, 1990, is to the effect ""left without

instruction"". Evidently there is no service of this statutory notice.

In a similar situation in M. Sundaram v. C. M. Ramraj [1993] 3 Crimes 175, Janarthanam J. has taken the view that section 138(c) of the

Negotiable Instruments Act, 1881, does not contemplate constructive notice. Hence written demand notice returned with the postal endorsement

not found"" cannot be said to have complied with the provisions of section 138(c) of the Act. If constructive notice has been contemplated under

the sub-section by the Legislature, sufficient phraseology would have been utilised for such a purpose. The language used therein, namely, ""receipt

of the said notice"", unambiguously points out actual receipt of notice. I respectfully agree with this view. Besides, it is not as if the notice has been

returned as ""refused to receive"" and in that event there is scope for an argument, that the petitioner had knowledge of the issuance of the notice.

Whereas when the registered notice has been returned with an endorsement ""addressee not found"", it cannot be stated that there could have been

any sort of wilful evasion of such notice. And it is also not the case of the complainant that the petitioner had deliberately refused to repel the

notice. While so, it is evident that the complaint cannot stand.

In the result, the petition is allowed and the proceedings in C.C. No. 1044 of 1990, in the Court of the judicial Magistrate-I, Kancheepuram,

are quashed.