Mohd.Shafi Ahanger vs Yasir Paul

Both these revision petitions having arisen out of an order dated 30.9.2003 passed by Judicial Magistrate [Judge Small Causes]. Srinagar in a

case between the same parties and on the similar facts, except variance in the number of the cheques and the amount mentioned therein, are being

disposed of by this common order.

Facts giving rise to these revision petitions in resume may be noticed.

AccusedRespondent issued cheque in the amount mentioned therein favour of the Complainantpetitioner and when the said cheques were

presented in the Bank for encashment, were bounced and returned with the memo dated 29.7.2003 ""Insufficient balance"". Demand notice was

given by the Complainant to the accused through registered post, informing him regarding return of the cheques as unpaid and requiring him to

make the payment of the amount of cheques by drawer within 15 days of such notice led the complainant to prefer a complaint under section 138

of Negotiable Instrument Act 1881 [hereinafter to be referred to be ""the Act""]. The trial magistrate, however, after recording the preliminary

Statement of the complainant took cognizance and issued process to the accused for his appearance in the case. In response to the summons, the

accused put in his appearance and filed an application before the trial Magistrate seeking dropping of proceedings initiated against him, interalia

alleging that the complaint does not disclose the date of receipt of the demand notice, stated to have been given to the drawer. It was further

contended that the demand notice is not in accordance with law as it does not disclose the statutory period for the payment of amount of cheque.

After receipt of such notice, therefore, it does not fulfill the mandatory requirement under section 138 of the Act and thus the complaint is not

maintainable. The trial Magistrate, after inviting objections and hearing the parties, found that the essential ingredients of the offence have not been

satisfied by the complainant for prima facie making out a case under Section 138 of the Act and ordered the dropping of proceedings against the

accused in the complaint vide order dated 30.9.2003 which became the subject matter of challenge in these petitions.

Heard Learned Counsel appearing for the petitioner and also gone through the relevant provisions of law touching the controversy in context

with the material on record.

The whole controversy centres around a narrow compass.

The contention raised before the trial magistrate in the application seeking dropping of proceedings was that the complaint neither reveals that

when the demand notice was dispatched to the accused and if dispatched. When it was received. The complainant, however, mentioned in the

recital of the complaint that the accused must have received the registered notice which clearly indicates that he himself was not sure as to on which

date the demand notice was received. Further submissions of the accused is that even in the preliminary statement recorded by the trial magistrate,

nothing has been said regarding the date of the receipt of the demand notice by the accused and thus no cause of action has accrued to the

complainant to file the complaint. It was further the case of the accused before the trial Magistrate, projected in the application, that it is the receipt

of the notice by the drawer which gives a cause of action to the complainant to file complaint within the statutory period. This having not been done

by the complainant no cognizance could be taken on such complaint and the proceedings initiated against the accused are required to be dropped.

The object of bringing Section 138 of the Act on statute book as to inculcate faith in the efficacy of banking operations and credibility in

transacting business on negotiable instruments. The ingredients which are to be satisfied for making out a case under section 138 of the Act are:

(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of certain amount of money to another person

from out of that account for the discharge of any debt or other liability.

(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity,

which ever is earlier.

(iii) that cheque is returned by the bank unpaid, either because the amount is insufficient to honour the cheque or that it exceeds the amount

arranged to be paid from that account by an agreement made with the bank.

(iv) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.

(v) the drawer of such cheques fails to make payment of the said amount of money to the payee or the holder in due course of the cheques within

15 days of the receipt of the said notice.

If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence.

Section 138 proviso (b) of the Act, however does not prescribe a particular from the notice, the requirement is that a notice shall be given in

writing within 15 days from the receipt of information from the bank regarding return of the cheque as unpaid and in the notice a demand for

payment of the amount of cheque has to be made. Further service of notice of demand is a condition precedent as envisaged under proviso (c) of

Section 138 of the Act, as also the view taken in Central Bank of India v. Saxon Farms (1999) 8 SCC 221. It, therefore, follows that cause of

action under section 138 proviso (c) of the Act to prefer a complaint arises not from giving of the notice but from the receipt of notice thereof by

the drawer.

Section 138 of the Act makes a civil transaction to be an offence by fiction of law. To constitute an offence under Section 138 of the Act, the

complainant is obliged to prove its ingredients which include the receipt of notice by the accused under clause (b), It is not the ""giving"" of notice

which makes the offences but it is receipt of the notice by the drawer which gives a cause of action to the complainant to file a complaint within

statutory period. On going through the impugned order passed by the trial magistrate, it is clearly gatherable that the complainant has no where

stated either in the complaint or in the preliminary statement recorded by the trial magistrate before issuing the process as to when the notice of

demand was dispatched to the accused. When and on which date it was received by the drawer of the cheque/accused. It is mandatory

requirement of proviso (c) of section 138 of the Act that it is the date of receipt of notice which is material because it is after the expiry of 15 days

of this date that the complainant gets a cause of action to make complaint within a statutory period provided under the Act. It is prima facie for the

complainant to make out a case so as to enable the court to examine the complainant as a preliminary evidence to find out that the essential

requirement under Section 138 of the Act are satisfied for proceedings against the drawer of the cheque. In these cases, neither the complaint

disclose the service of notice of demand on the drawer of the cheque nor the preliminary evidence adduced by the complainant. Even the Learned

Counsel appearing for the petitioner, when taken through the record, could not show as to when and on which date the demand notice was issued

after dishonour of cheque and on which date it was received by the accused so as to give cause of action to maintain the complaint. He also

candidly expressed that there is nothing to suggest as to when the notice of demand was given and whether it was served or not. The date of

receipt of notice becomes material and significant when the payment of cheque amount is not made within 15 days of the receipt of the notice and

in that event the cause of action accurse to the complainant to maintain the complaint. Similar view was taken by this court and an identical issue

crept up for adjudication in 2000 SLJ 247. It is, therefore, meaningful to point out that before a cognizance is taken on a complaint and process

issued against the accused, it is obligatory on the magistrate to see that the complaint prima facie discloses that the drawer has failed to make

payment of the money to him within 15 days of the receipt of said notice and unless the date of receipt of the notice is clearly made out from the

complaint as also the preliminary statement of the complainant, no cause will accrue to the complainant to maintain the complaint within the purview

of law. To elucidate further, it is apt to point out that after the expiry of 15 days of the date of receipt of notice that the complaint can be

maintained by the complainant within statutory period provided under the Act. It is for the complainant to make out a prima facie case and satisfy

the essential ingredients for taking cognizance and issuing process under Section 138 of the Act against the drawer of the cheque/accused. Notice

should not be deemed to have been served as a matter of course. It is the date of receipt of notice which is material to provide a cause of action to

the complainant to maintain the complaint. There is a plethora of precedent laid down by various High Courts and Apex court that it is the receipt

of notice and not giving of notice which gives a cause of action to the complainant to maintain the complaint.

After taking conspectus of entire gamete of questions involved in these revision petitions on the touch stone of relevant provisions of law under

the Negotiable Instruments Act 1881, the inevitable conclusion reached, that the cause of action accrues to the complainant not from giving of the

notice but on receipt of the notice by the drawer of the cheque. The essential condition, having not been satisfied by the complainant either in the

complaint or in the preliminary statement to support averments in the complaint, it has rightly been held not maintainable by the trial magistrate and

dropped proceedings thereof. The view expressed by the trial Magistrate is the view to which no exception can be taken.

For what has been stated and discussed above, I do not find any merit in these criminal revisions which are accordingly dismissed.