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TMI Blog1998 (3) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai, hereinafter referred to as Respondent No.3 . The Respondent No.2 is a businessman having its residential address at 801/A, Manish PArk, Pump House, Andheri, Mumbai-400 093, hereinafter referred to as the Complainant . The petitioner states he is not in charge of or responsible for the affairs of the said Company. He is not involved in the day to day affairs of the management of Respondent No.3. The complainant has not lent and advanced a sum of ₹ 5,00,000/on 11-1-1996 and ₹ 3,50,000/on 26-2-1996 to the petitioner and Respondent No.3 for their business purposes. The aforesaid advances made by the complainant are evidences by bills of exchange duly executed by and on behalf of Respondent No.3 and the petitioner. The Respondent No.3 issued to the complainant two cheques bearing cheque Nos.847533 and 847536 drawn on Canara Bank both dated 12th August, 1996 in the sum of ₹ 5,00,000/and ₹ 3,50,000/-. These cheques were presented for payment on 12th August, 1996 at Central Bank/Bank of India, K.D.Branch. The aforesaid cheques were returned/dishonoured on 16th August, 1996 by the Bankers of Respondent No.3 and the petitioner with the endorsement Funds ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No.3 Company. There is no averment made in this effect in the complaint. Respondent No.2 filed a reply to the aforesaid application before the learned Magistrate. After considering the arguments put forward by the Counsel for the parties, the learned Magistrate has rejected the application by order dated 16th May, 1997. It is this order which is impugned in the present writ petition. 5. Mr. Hegde, learned Counsel appearing for the petitioner submits that the notice issued by Respondent No.2 is not in accordance with Section 138 of the Negotiable Instruments Act, 1881 (as amended) (hereinafter referred to as the Act ). The interest has not been specified and, therefore, the notice is vague and no prosecution can continue on the basis of the said notice. Learned Counsel also submits that the complaint filed by the Respondent No.2 is filed as a duly Constituted Attorney of the payee/holder in due course of the cheque but the complaint does not disclose that Respondent No.2 is the duly constituted attorney of the payee. Learned Counsel further submits that the Court of learned Magistrate at Girgaum had no territorial Jurisdiction to entertain the complaint and the proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner and her husband failed to transfer the said shares and did not refund the money also. On 11th June, 1994 the petitioner issued a cheque for an amount of ₹ 5,79,000/-. This cheque was dishonoured with the endorsement insufficiency of funds into the account . On 24th June, 1994 the opposite party therein sent a notice demanding payment of ₹ 6,50,000/within 15 days from the date of receipt of the said notice. The cheque amount was ₹ 5,79,000/-. It was, therefore, argued that the notice was bad as the amount claimed was ₹ 6,50,000/whereas the cheque had been made only in the sum of ₹ 5,79,000/-. It was on these facts that the learned Judge made the observations contained in paragraphs 28 and 29 of the Judgement which are as follows: 28. So the wording in clause (b) to the proviso of S. 138 a demand for payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque' , refers to the cheque amount and not any other amount either smaller or higher than the amount mentioned in the cheque. So the notice need to be given demanding the cheque amount. If any bigger amount or smaller amount than the cheque am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of the dishonoured cheque can safely be presumed to be known by the drawer of the dishonoured cheque. It must be noticed that the observations made by the Calcutta High Court were in the peculiar facts and circumstances of that case. The facts of this case are wholly different from the facts in the case of Ozha (supra). Therein clearly the cheque amount was ₹ 5,79,000/whereas the demand was made for payment of ₹ 6,50,000/-. Clearly, therefore, the notice was not in accordance with Section 138 of the Act. The observations of the learned single Judge of the Calcutta High Court cannot be stretched to such an extent that it would also exclude the mention of statutory interest payable under Section 80 of the Act. The notice clearly calls upon the drawer of the dishonoured cheques to pay the cheque amount. Paras 3 and 5 of the notice makes the position crystal clear. There is no room for any vagueness or uncertainty. Those paras of the notice may be reproduced, for appreciation of the opinion expressed above. 3. On demand of our client, and in repayment of the principle amount only, due under the said bill of exchange you had issued in our client's favour a ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the notice was not before the Calcutta High Court. As noticed above, therein the amount of the dishonoured cheque was ₹ 5,79,000, but the amount claimed in the notice was ₹ 6,50,000/-. The extra amount of ₹ 71,000/was not claimed by way of interest. Nor was any unspecified interest claimed. Thus there was no occasion for the Calcutta High Court to examine the impact of Section 80 of the Act in a situation where an unspecified claim for interest is made in the notice after specifically claiming payment for cheque amount. The Kerala High Court merely relied upon the observations of the Calcutta High Court. The learned Single Judge has not at all adverted to Section 80 of the Act. 8. The view I have taken above also finds support from a judgement of the learned single Judge of this Court given in Criminal Writ Petition No.903 of 1993. In that case, it was, inter alia, submitted that in the notice a demand was made regarding interest at the rate of 21 per cent per annum. Mr.Justice Patankar held that merely because interest is demanded neither the notice is invalid nor the criminal proceedings are illegal. Although the learned single Judge had not adverted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horised in writing by a payee or the holder in due course (individual or a company) would suffice to take cognizance, for that issue does not arise directly in these petitions. However, on that aspect, there is some indication available in the judgments of Janarthanam, J. of this Court in M/s.Gopalakrishna Trading Co. ref. by its Manager P.Sivaram v. D.Baskaran (supra) and Ramakrishnan, J. of Kerala High Court C.B.S. Gramaphone Records and Tapes (India) Ltd. v. Noorudeen (supra). Keeping the aforesaid observations in view it is to be seen that in the reply filed to the petition it is categorically stated that respondent No.2 is the Power of Attorney Holder for his wife and his father. It is further stated that after going through the Power of Attorney the verification was recorded by the learned Magistrate on 27th September, 1996 . In the verification it is stated as follows: I am the constituted Attorney of my wife. I am fully aware of and I was present at all material times during the transactions while the monies were lent and bills of exchange and cheques were drawn, signed, issued and delivered and have full knowledge of this transaction. I am authorised to file this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffence is prima facie committed by all or any of the accused. 9. Thereafter the counsel relied upon a single Judge decision of the Andhra Pradesh High Court in Satish Co. v/s S.R. Traders and Ors. (1997 (4) ALL M.R. 58). A perusal of this case shows that the complaint had been filed by M/s.Satish Co. through its Manager Shri Naresh Kumar. Thus the trial Court had held that the complaint was not filed by the competent person. The authorisation in favour of the Manager to file the complaint was filed in Court after one year of the filing of the complaint. It was not filed along with the complaint. It was thus argued that filing of such authorisation after one year would not cure the legal infirmity. During the course of discussion, the learned Judge has held that the Manager cannot be construed to be a person holder in due course of the cheque in terms of the definition of holder in due course found under Section 9 of the Act. At the same time the Court held that the Company being a corporate body, any officer of the Company who is duly authorised by the Company to initiate proceedings can file a complaint for and on behalf of the Company. The learned Judge distinguishes th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is any act committed by the Directors from which a reasonable inference can be drawn that they could also be vicariously liable. In these circumstances, therefore, we find ourselves in complete agreement with the argument of the High Court that no case against the Directors (accused Nos. 4 to 7) has been made out ex facie on the allegations made in the complaint and the proceedings against them were rightly quashed. A perusal of the extract above will show that the Supreme Court was dealing with a case where there was not even a whisper nor a shred of evidence nor anything to show apart from the presumption drawn by the complainant that there is any act committed by the Directors from which reasonable inference can be drawn that they could also be vicariously liable. Such is not the case herein. As observed above, the petitioner had replied to the notice sent by Respondent No.2 assuring him of due payment. The petitioner had also accepted the notice in Company Petition No.573 of 1996 on behalf of the Company. The learned Magistrate was perfectly entitled to take these facts into consideration. In fact, in the impugned order, these facts are quite clearly mentioned. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr.Hegde has been answered against him by the Delhi High Court in the case of Canbank Financial Services Ltd. v/s Gitanjali Motors and Ors. (1995 Cri.L.J. 1272) wherein it is clearly held that the place where the cheque was given or handed over is relevant and the Courts within that area will have territorial jurisdiction. Referring to Sections 179 and 178(b) Cr.P.C., Arun Kumar, J. has held as follows in paragraph 14: Then as per Section 179 when an act is an offence by reason of anything which has been done and of a consequence which has ensued. The offence may be inquired into or tried by a court within those legal jurisdiction such thing has been done or such consequence has ensued. Payment of cheque against an account having sufficient funds to meet the liability under the cheque is one act while dishonour of the cheque is a consequence of such an act. Therefore as per Section 179 also the place where the cheque was given or handed over will have jurisdiction and the courts of that place will have jurisdiction to try the offence. Likewise for purposes of Section 178(b) payment of cheque may be one part of an offence and dishonour of the cheque may be another part and, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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