Meenakshi Madan Rai, J.—The questions that arise for consideration in this Appeal are;
(i) Whether there was service of Notice to the Respondent as envisaged under Section 138 of the Negotiable Instruments Act, 1881? and
(ii) Whether Exhibit-C (the Notice) issued to the Respondent, fulfils the requirements of Section 138(b) of the Negotiable Instruments Act, 1881
(hereinafter ""NI Act"")?
2. According to the Appellant, it had filed a Private Complaint Case No. 01 of 2014 under Section 138 of the NI Act, against the Respondent,
before the Court of the learned Judicial Magistrate, West Sikkim at Gyalshing, on account of dishonour of cheque issued by the Respondent to it
on 7.12.2013. The facts being that the Respondent had applied for cash credit of Rs.10,00,000/- (Rupees ten lakhs) only, from the Appellant
Bank on 27.6.2009 and as on 7.12.2013 a sum of Rs.14,08,000/- (Rupees fourteen lakhs and eight thousand) only, was outstanding against the
Respondent duly acknowledged by him. Towards repayment of the said loan, the Respondent issued Cheque bearing No. 32003446 dated
07.12.2013, drawn on the Union Bank of India, Gyalshing. The said cheque, when presented, was dishonoured, which was duly communicated to
the Complainant vide Bank return Memo dated 11.12.2013. Thereafter, the Appellant issued a Legal Notice through its counsel on 7.1.2014, at
the last known address of the Respondent demanding that he make the payment as covered by the dishonoured cheque, issued by him, within
fifteen days from the receipt of the Legal Notice which was duly served on 9.1.2014. Despite receipt of Notice, the Respondent failed to comply
with the demand, thus, being left with no option the Complainant filed the aforesaid Private Complaint Case. The Learned Trial Court after
considering the evidence on record, as well as the documents exhibited took cognizance of the Case and summoned the Respondent, who sought
time to settle the matter with the Complainant. On 5.3.2014, the Counsel for the Respondent undertook to pay Rs.4,00,000/- (Rupees four lakhs)
only, as settlement. On failure to repay the amount, the learned Trial Court on 21.3.2014 finding sufficient prima facie materials against the
Respondent framed Charge under Section 138 of the NI Act. The Respondent being aggrieved by the said Order preferred a Revision before the
Learned Sessions Judge, West Sikkim at Gyalshing, who rejected the same. Thereafter, the witnesses of the Appellant Bank were examined, the
Accused was examined under Section 313 of the Code of Criminal Procedure, 1973. He sought to and was allowed to examine two witnesses in
his defence. The learned Trial Court on examining the entire evidence, including the documentary evidence, convicted the Respondent and
sentenced him to a fine of Rs.20,00,000/- (Rupees twenty lakhs) only, by its Judgment and Order on Sentence dated 30.7.2014. Both were
assailed before the Learned Sessions Judge, West Sikkim at Gyalshing in Criminal Appeal No. 07 of 2014.
3. The Appellate Court vide its Judgment dated 22.4.2015, set aside the Judgment and Order on Sentence of the Learned Trial Court on the
ground that the Notice served upon a person other than the Accused is not a proper service as required under Section 138(b) of the NI Act,
placing reliance on M.D. Thomas v. P.S. Jaleel & Another, since reported in (2009) 14 SCC 398. Being, thus aggrieved, the instant Appeal
has been preferred.
4. The grounds canvassed in this Appeal are that the learned Appellate Court has erred in holding that the case of the Complainant does not fall
within the ambit of the NI Act which is contrary to the evidence on record and findings of the learned Trial Court. That, the Appellate Court has
also erred in holding that the Notice issued to the Accused was not served to the Addressee, and hence did not comply with the provisions of
Section 138(b) of the NI Act, thus arriving at a wrong finding. It was contended by learned Counsel for the Appellant that the evidence before the
learned Trial Court clearly indicates commission of the offence under Section 138 of the NI Act. The further arguments pivoted around the point of
service of Notice. According to him, merely because the Respondent did not receive the Notice from the Postman cannot wish away the fact that
his son had indeed received the Notice and had made it over the Respondent on 29.1.2014. While placing reliance on Rekha Mahindra Shah v.
Gautam United Parmar and Anr., 2013 CRI. L.J. 2415, he endeavoured to bring home this point in view of the findings therein. In the said
Judgment, while dealing with service of notice on the husband of the appellant, the High Court of Bombay held that the notice was issued and
served, although the applicant did not receive it personally, but was received by her husband. That, both the courts below did not commit any error
in holding that the notice is duly served and received as well. Further, to fortify his submissions reliance was also placed on C.C. Alavi Haji v.
Palapetty Muhammed and Another, (2007) 6 SCC 555, wherein the Hon''ble Apex Court while discussing the matter of service of notice held
that where the payee dispatches the notice by registered post with correct address to the drawer of the cheque, the principle incorporated in
Section 27 of the General Clauses Act, would be attracted. In the matter at hand, it is contended that the correct address was given on the Notice,
on the basis of which the son of the Respondent duly received it, therefore, the Respondent cannot now turn around and raise the bogey of non
service. To further buttress his point, assistance was also taken of the decision of the Hon''ble Apex Court in Indo Automobiles v. Jai Durga
Enterprises And Others, (2008) 8 SCC 529, wherein the Hon''ble Apex Court while discussing the case of K. Bhaskaran v. Sankaran
Vaidhyan Balan, (1999) 7 SCC 510, held that the context of Section 138(b) of the NI Act, invites a liberal interpretation favouring the person
who has the statutory obligation to give notice under the Act because he must be presumed to be the loser in the transaction, and provision itself
has been made in his interest and if a strict interpretation is asked for that would give a handle to the trickster cheque drawer. Hence, the Judgment
and Order of the learned first Appellate Court be set aside.
5. Per contra, the thrust of the arguments advanced by learned Senior Counsel for the Respondent, pivoted around the defects in the Notice issued
under Section 138 of the NI Act, purportedly issued to the Respondent, however, the fact of service of Notice was duly acknowledged during the
course of the arguments. He has walked this Court in detail through the provisions of Section 138 of the NI Act, and contends that as per Section
138(b), there must be a specific demand mentioning the amount due. That, Exhibit-C, purportedly the Notice, issued by the Appellant does not
mention that the Respondent owes the Bank Rs.14,08,000/- (Rupees fourteen lakhs and eight thousand) only. It is further argued that on careful
perusal of Exhibit-C, his stand would be vindicated leading to the undeniable fact that the Notice is defective. That, the learned Trial Court failed to
examine the Notice in the first instance. Reliance was placed on the decision of M/s Rahul Builders v. M/s Arihant Fertilizers & Chemical &
Anr., 2008 CRI. L.J. 452, wherein it was, inter alia, held that unless a notice is served in conformity with Proviso (b) appended to Section 138 of
the Act, the complaint petition would not be maintainable. That, it is one thing to say that the demand may not only represent the unpaid amount
under cheque but also other incidental expenses like costs and interests, but the same would not mean that the notice would be vague and capable
of two interpretations. The decision in Suman Sethi v. Ajay K. Churiwal and another, AIR 2000 SC 828, was also invoked wherein at
Paragraph 8, it was held as follows;
8. It is a well settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the ""said amount"" i.e.
cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to ""said amount"" there is
also claim by way of interest cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving up breakup
of the claim the cheque amount, interest damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and
these additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without
specifying what was due under the dishonoured cheque, notice might well fail to meet the legal requirement and may be regarded as bad.
(emphasis supplied)
6. To further buttress his submissions, learned Senior Counsel also placed reliance on Yankay Drugs and Pharmaceuticals Limited v. Citi
Bank and Another, 2001 CRI. L.J. 4157, wherein it was held, inter alia, at Paragraph 12 as follows;
12. In this case on hand, the amount covered by the cheque, which was dishonoured by the bank is Rs.9,972/-. But in the notice issued under
Section 138(b) of the Act the complainant failed to make any demand for payment of the said amount, instead it was stated in the notice that the
cheque, which was dishonoured, was issued for Rs.3,871/-. From this it is clear that the notice clearly fell short of the statutory requirement under
Section 138(b) of the Act.
7. In the second limb of his argument, he disputes the fact that the Respondent had issued the cheque for an amount of Rs.14,08,000/- (Rupees
fourteen lakhs and eight thousand) only. Taking the stand that the Respondent had issued ten blank cheques against the loan taken by him, having
duly signed the cheques but without inserting the dates. It is expostulated that on the relevant date i.e. 7.12.2013, the Bank has filled in the details
in the cheque and presented it for encashment, without the knowledge of the Respondent and therefore, he is not liable for any consequences that
arise on presentation of such a cheque in the absence of the Respondent''s knowledge.
8. I have heard the rival contentions of both learned Counsel and given due consideration to the same. I have also carefully perused the entire
records of the matter including the evidence on record, the Judgment and Order on Sentence of the learned Judicial Magistrate, West Sikkim at
Gyalshing and the impugned Judgment of the learned Sessions Judge, West Sikkim at Gyalshing. Decisions of the Hon''ble Apex Court relied on
by learned Counsel for the parties have also been perused by me.
9. Learned Counsel for the Appellant had painstakingly argued on the point of service of notice contending that the Notice had been duly served
on the Respondent, as before the learned Court of the Magistrate, West Sikkim at Gyalshing, it was contended that the Notice was not served and
further, the learned Sessions Court, West Sikkim at Gyalshing, also set aside the Judgment of the Learned Trial Court on the grounds of non-
service of summons on the Respondent. The arguments before this Court placed by learned Senior Counsel for the Respondent, however, clearly
indicates that he has no quarrel with the service of Notice. Inasmuch as, he admits receipt of the Notice, therefore, this point requires no further
discussion. The first question set out above is consequently settled.
10. Now dealing with the second question, it has been pointed out by learned Senior Counsel that the provisions of Section 138(b) of the NI Act,
have not been complied with since the specific amount of the cheque has not been mentioned in the Notice.
11. On this point, on careful perusal of Exhibit-C, it is clear that the Respondent has been given notice of the amount due from him duly
recapitulating that on 27.6.2009 he was sanctioned a cash credit loan with a limit of Rs.10,00,000/- (Rupees ten lakhs) only, for a period of 12
months. The said loan amount was sanctioned at the interest rate of 13% per annum with an additional penal interest of 2% per annum to be
charged in case of default. It has also been laid out in the Notice that he failed to settle the outstanding despite repeated reminders, but on
7.12.2013 issued a cheque bearing No. 32003446 in the name of the Complainant Bank to deposit it with the assurance of sufficient funds in his
account. However, what cannot be lost sight of is the glaring fact that the specific amount of the dishonoured cheque being Rs.14,08,000/-
(Rupees fourteen lakhs and eight thousand) only, has not been specified in the Notice which makes the Notice fall short of its legal requisites. For
better appreciation, the relevant portions of the Notice are extracted herein below;
..........................
1. That on 27.06.2009, you were sanctioned a Cash Credit Loan with a limit of Rs.10,00,000/- (Rupees lakh only) (sic) by my client for a period
of 12 months.
2. That the said loan amount was sanctioned to you at the interest rate of 13 % P.A. and an additional 2% P.A, Penal Interest was to be charged
in case of default.
3. ............................
4. ............................
5. That my client, on several occasions had verbally informed you about the outstanding amount payable by you, however despite several
assurances from your side, you had not settled the same. However, you assured my client that you had credited your account No.
574401010050021, maintained in my client''s Bank, i.e, Union Bank of India and issued a Cheque bearing No.: 32003446, dated 07.12.2013 in
the name of my client requesting my client to deposit the same in the bank and also assured that there is sufficient balance in your account and the
cheque would not be returned without encashment.
6. ............................
7. ............................
12. In M/s Rahul Builders case (supra), the Hon''ble Apex Court discussed the observation made in Suman Sethi''s case (supra) and concluded
that;
13. As in the instant case, no demand was made for payment of the cheque amount, we are of the opinion that the impugned judgment cannot be
faulted.
13. Similarly, as already mentioned for reasons best known to the Appellant, the cheque amount has not been categorically specified in the Notice
and hence, I have to agree with the submissions of Learned Senior Counsel for the Respondent that the Notice is not in conformity with the
provisions of Section 138(b) of the NI Act. This Court is alive to the fact that a wide interpretation has to be given to the provision of Section
138(b) of the NI Act, so that the wrongdoer does not benefit by raising the question of shortfalls in the technicalities. However, when there is a
categorical legal requirement, the party demanding payment cannot circumvent the provisions. At the same time the fact of non-exhibition of
Exhibit-C by the Appellant in the learned Trial Court needs to be mulled over, it is only on an Application filed by the Respondent before this
Court seeking to exhibit a copy of Exhibit-C, which was in the possession of the Appellant Bank, duly filed by them before the learned Trial Court
and allowed by Order of this Court dated 13.4.2016, that the document came to be exhibited before the learned Trial Court, despite vehement
opposition to the Application by the Appellant.
14. Without the benefit of having examined Exhibit-C, the learned Trial Court in its Judgment at Paragraph 22, held as follows;
22. With regard to the notice issued by the complainant bank to the accused, upon a proper edification of the evidence, it is firstly inferred that
although the complainant bank has not exhibited the legal notice issued to the accused, however I cannot reject their case on mere non-exhibition
of the notice when PW-4 examined by the complainant bank has proved that legal notice was issued by him to the complainant bank, which could
not be discarded by defence. Also the denial of its existence by defence does not hold much weight when the witnesses of the defence itself have
duly acknowledged its receipt in their evidence.
15. The observation of the learned Trial Court that there was compliance of procedural aspects merely relying on the evidence of PW-4, cannot
be countenanced as the learned Court had no opportunity of examining Exhibit-C. The Court has failed to take into consideration that the ""said
amount"" has not been disclosed in the Notice. On the other hand, it would be pertinent to point out that the argument of the Respondent that he
had given blank cheques to the Appellant cuts no ice, in view of the non production of counterfoils before the learned Trial Court to substantiate
this point. However, this argument has no bearing now, for the reason that in the first instance the Appellant has failed to abide by the provision of
Section 138(b) of the NI Act, as already reflected in the foregoing discussions.
16. Accordingly, the Judgment and Order on Sentence of the learned Trial Court in Case No. 01 of 2014 dated 30.7.2014, is set aside.
17. The acquittal of the Respondent by the learned first Appellate Court is upheld but for a different reason, i.e. the learned Court of Sessions
while relying on M.D. Thomas''s case (supra), was of the opinion that since the Notice was not served upon the Respondent/Accused but on his
son, the requirements in terms of Clause (b) of the proviso of Section 138 of the NI Act had not been complied with. Now, however, the
Respondent admits receipt of the Notice. It was also observed that PW-4, has deposed that he specifically mentioned the cheque number, date
and the amount. This is contrary to the contents of Exhibit-C, therefore, this opinion is not tenable.
18. Hence, in view of the discussions herein above, the Respondent is accordingly acquitted of the Charge under Section 138 of the NI Act.
19. Appeal is dismissed.
20. Copy of this Judgment be sent to the Courts of the learned Sessions Judge, West Sikkim at Gyalshing and the learned Judicial Magistrate,
West Sikkim at Gyalshing for information, along with its records.
21. No order as to costs.