2019 (4) TMI 1849 - SC - Indian Laws

Dishonor of cheque - Trial Court held that the notices were defective on the ground that the notices mentioned loan amount and not the cheque amount - Section 138 of the Negotiable Instruments Act 1881 - acquittal of accused - HELD THAT - There is no dispute regarding the proposition that the notice issued under Section 138 of the NI Act has to be only for the cheque amount and not for any other amount more than the cheque amount. On an interpretation of clause(b) of the proviso to Section 138 of the NI Act the High Court held that there was no failure on the part of the respondent/complainant in making a demand for the payment of the amount of the cheque by issuance of a notice. The High Court observed that the words loan amount should not have been mentioned in the notice. However the High Court was convinced that the respondent demanded the payment of 50, 000/- which was the cheque amount. There are no reason to interfere with the judgment of the High Court - appeal dismissed.

Summary

Issues:
1. Defective notices under Section 138 of the Negotiable Instruments Act, 1881.
2. Interpretation of clause(b) of the proviso to Section 138 of the NI Act regarding demand notice requirements.
3. Applicability of previous judgments on notice requirements under Section 138 of the NI Act.

Analysis:
1. The appellant was acquitted by the Trial Court but convicted by the High Court for an offence under Section 138 of the NI Act due to defective notices. The Trial Court found the notices mentioning the loan amount instead of the cheque amount contrary to Section 138. In contrast, the High Court held that the respondent/complainant adequately demanded payment of the cheque amount despite the mention of the loan amount in the notices. The High Court reversed the Trial Court's decision based on this interpretation.

2. The appellant argued that the demand notice should only refer to the cheque amount, not the loan amount, relying on clause(b) of the proviso to Section 138 of the NI Act. The appellant cited previous judgments to support this argument. However, the Supreme Court clarified that while the cited judgments emphasized the importance of mentioning only the cheque amount in the notice, they were not applicable in this case as the loan amount and the cheque amount were the same here.

3. The Supreme Court examined the previous judgments cited by the appellant and confirmed that the notice under Section 138 of the NI Act should specify only the cheque amount, not any other amount exceeding it. Since the loan amount and cheque amount were identical in this case, the Court upheld the High Court's decision. Consequently, the appeals were dismissed, and the amount held in the Registry was ordered to be paid to the respondent with interest.