2023 (4) TMI 499 - HC - Indian Laws

Dishonour of Cheque - validity of notice issued - complaint has been rejected by the learned Trial Court is that the notice issued after the cheque was returned back as dishonoured, was no notice as contemplated under the provisions of Negotiable Instruments Act, as no demand of money was made therein - HELD THAT - It is not in dispute that the cheque in issue is dated 14.09.2004. The same was drawn upon H.P. State Cooperative Bank, branch Beri, District Bilaspur, H.P. This cheque though was presented by the appellant with her bank on 07.03.2005, yet the same was received by the payee bank, i.e. H.P. State Cooperative Bank, branch Beri, District Bilaspur, H.P. on 15.03.2005, i.e. after six months from the date of issuance of the cheque which lapsed on 13.03.2004. Hon ble Supreme Court in SHRI ISHAR ALLOY STEELS LTD. VERSUS JAYASWALS NECO LIMITED 2001 (2) TMI 984 - SUPREME COURT , has been pleased to hold that the law mandates a cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable necessarily within six months as from the date of its issuance (this judgment relates to the period when the validity of cheque used to be for a period of six months) - in the said judgement, this Court observes that there is no infirmity in the findings returned by learned Trial Court that the cheque in issue in fact was presented before the payee bank after the cheque had expired as it is an admitted fact that the cheque was presented with the payee bank, may be by the bank of present appellant, after a period of six months as from the date of issuance of the cheque. Hon ble Supreme Court in KR. INDIRA VERSUS DR. G. ADINARAYANA 2003 (10) TMI 385 - SUPREME COURT , has been pleased to hold that though no formal notice is prescribed in Section 138 of the Negotiable Instruments, the statutory provisions indicate in unmistakable terms as to what should be clearly indicated in the notice and what manner of demand it should make. Hon ble Supreme Court was further held that what is necessary is making of a demand for the amount covered by the bounced cheque. Coming back to the facts of the present case, as in the notice which was issued after the bouncing of the cheque, there was no demand of the amount of the bounced cheque, in this background, the findings returned by learned Trial Court that the notice was no notice in the eyes of law, as is envisaged under the provisions of the Negotiable Instruments Act, were also correct findings. This Court does not finds any merit in the present appeal, the same is dismissed.

Summary

Issues Involved:
The judgment involves a challenge to the dismissal of a complaint under Section 138 of the Negotiable Instruments Act by the Court of learned Sub-Divisional Judicial Magistrate, focusing on the rejection of the complaint on the grounds of the notice issued after the dishonoring of the cheque and the presentation of the cheque after the due date.

Issue 1 - Notice Requirement:
The appellant filed a complaint under Section 138 of the Negotiable Instruments Act after a cheque issued by the respondent was dishonored. The complaint was rejected by the Trial Court due to the notice issued not containing a demand for payment as required by the statutory provisions. The appellant argued that the notice complied with the Act and that the Trial Court took a hyper-technical view. However, the respondent contended that the notice did not meet the legal requirements set by the Hon'ble Supreme Court, emphasizing the necessity of a proper demand for the bounced cheque amount in the notice.

Issue 2 - Cheque Presentation Timing:
The second ground for the dismissal of the complaint was the presentation of the cheque after the due date. The appellant's counsel argued that the cheque was presented within six months of its issuance, fulfilling the appellant's obligations. On the other hand, the respondent's counsel highlighted that the crucial date for determining the validity of the cheque presentation is when it is submitted to the payee bank, not the drawer's bank. Citing a Supreme Court case, it was emphasized that the cheque must be presented to the drawee bank within six months to hold the drawer criminally liable.

Judgment Summary:
The High Court examined the facts and legal precedents related to the issues raised. It was noted that the cheque in question was presented to the payee bank after the six-month validity period had lapsed, as per the Supreme Court's interpretation of the law. Regarding the notice issued by the appellant after the dishonor of the cheque, the Court found that it did not contain a proper demand for the payment amount, as required by the Act and supported by Supreme Court decisions. Consequently, the Court upheld the Trial Court's decision to dismiss the complaint, as it found no merit in the appellant's arguments. The appeal was therefore dismissed, along with any pending applications, and any interim orders were vacated.