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2024 (2) TMI 1245 - HC - Indian LawsDishonour of Cheque - Proviso (b) to Section 138 of the NI Act not complied - notice of demand dated 08.06.2012 demanded Rs. 2 crores from the accused instead of the cheque amount of Rs. 1 crore - no reason given for excess demand - typographical error or not - HELD THAT - In view of the Proviso (b) to Section 138 of the NI Act, therefore, the cause of action for filing of the complaint would interalia accrue to the complainant only where the complainant 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 30 days of the receipt of the information by the complainant from the bank regarding the return of the cheque as unpaid. In the present case, admittedly, the notice of demand dated 08.06.2012 demanded Rs. 2 crores from the accused instead of the cheque amount of Rs. 1 crore. It also did not specify the reason for demanding the amount in excess. Therefore, the notice was not in compliance with Proviso (b) to Section 138 of the NI Act. The plea of the respondent of there being a typographical error in the notice, even if accepted on facts, cannot be accepted in law to give rise to a cause of action to the respondent to maintain the complaint under Section 138 of the NI Act. The notice being defective, the cause of action for filing of the complaint under Section 138 of the NI Act did not accrue in favour of the respondent. The plea of the respondent that since the complaint has been pending for long, this Court should not exercise its power under Section 482 of Cr. P.C. to quash the complaint, also cannot be accepted. The petitioner cannot be made to suffer the agony of defending a complaint, which on the face of it is not maintainable. Petition allowed.
Issues Involved:
1. Quashing of Criminal Complaint under Sections 138/141/142 of the Negotiable Instruments Act, 1881. 2. Validity of Demand Notice under Section 138 of the NI Act. Summary: Issue 1: Quashing of Criminal Complaint under Sections 138/141/142 of the NI Act The petitioner sought the quashing of Criminal Complaint No. 523804/2016, filed under Sections 138/141/142 of the Negotiable Instruments Act, 1881, pending before the Metropolitan Magistrate. The complaint was based on a dishonoured cheque amounting to Rs. 1 crore issued by Nafto Gaz India Pvt. Ltd. The petitioner argued that the demand notice dated 08.06.2012 was not in compliance with Proviso (b) of Section 138 of the NI Act, as it demanded Rs. 2 crores instead of the cheque amount, rendering the complaint not maintainable. The respondent contended that the excess amount was due to a clerical error. Issue 2: Validity of Demand Notice under Section 138 of the NI Act The court examined whether the demand notice complied with the legal requirements under Section 138 of the NI Act. Section 138 mandates that the notice must demand the "said amount of money," which refers to the cheque amount. The Supreme Court in Suman Sethi v. Ajay K. Churiwal and Rahul Builders v. Arihant Fertilizers & Chemicals established that any additional demand in the notice must be severable and should not invalidate the notice if the cheque amount is specified clearly. The court found that the notice in question demanded Rs. 2 crores instead of Rs. 1 crore without specifying the reason for the excess amount, thus failing to meet the legal requirement. The court also referenced multiple judgments, including Gokuldas v. Atal Bihar & Anr., M/s. Yankay Drugs and Pharmaceuticals Ltd. Hyderabad v. M/s Citi Bank, and Chhabra Fabrics Private Limited v. Bhagwan Dass, which emphasized strict compliance with the statutory requirements of Section 138. The court concluded that even if the excess amount was due to a typographical error, it could not be accepted in law to maintain the complaint under Section 138. Conclusion: The court quashed the Criminal Complaint No. 523804/2016 against the petitioner, stating that the defective notice did not give rise to a cause of action under Section 138 of the NI Act. The petition was allowed, and no order as to costs was made.
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