Jagdish Narayan Rao v. Nilay Banerjee And ANR.
IN THE HIGH COURT AT CALCUTTA
[ CIRCUIT BENCH AT PORT BLAIR ] ...
CRA(SB)/1/2022 Shri Jagdish Narayan Rao ... Appellant Vs.
Shri Nilay Banerjee and Another ... Respondents Ms. A.S. Zinu ... for the Appellant Mr. K. Sabir ... for the Respondent no.1 Mr. Sumit Karmakar ... for the Respondent no.2 November 12, 2024 [M.A. Mobin] Item No.1
1. In this appeal the judgement dated July 27, 2022 as passed in Criminal Appeal No.3 of 2021 by the learned Sessions Judge, A & N Islands has been impugned.
2. Learned First Appellate Court while allowing the said appeal had set aside the judgement of conviction and order of sentence dated 09.2.2021 as passed in C.R. Case No.79 of 2016 by the learned Judicial Magistrate, 1st Class-II, Port Blair in a proceeding under Section 138 of the N.I. Act hereinafter referred to as the 'said Act' and thus acquitted the appellant/accused therein under Section 255(1) Cr.P.C.
3. The complainant who is the Respondent no.1 before the 1st Appellate Court felt aggrieved and preferred the instant appeal.
4. In course of her argument Ms. Zinu, learned Counsel appearing on behalf of the Appellant submits before this Court that the learned 1st Appellate Court while passing the impugned judgement has failed to visualize the true spirit of Section 138 of the said Act more specifically the proviso of Clause (b) of Section 138 of the said Act and thus wrongly held that the notice as issued by the complainant to the accused is defective and not in accordance with law and the same thus hits the very root of the case. It is submitted further that the learned 1st Appellate Court completely misconstrued the contents of the notice of demand dated 02.6.2016 in the perspective of the statutory provision and the reported decision of the Hon'ble Apex Court in Suman Sethi vs. Ajay K. Churiwal reported in AIR 2000 SC 828.
5. Ms. Zinu, learned Counsel appearing on behalf of the Appellant submits further before this Court that the 1st Appellate Court ought to have come to a finding that the demand notice dated 02.6.2016 clearly indicates the exact quantum of balance consideration money which is due and payable by the accused and which is/are equal and/or equivalent to the cheque amount as issued by the accused in favour of the complainant. It is further argued on behalf of the complainant/Appellant herein that learned 1st Appellate Court has come to a wrong finding on the basis of the last paragraph of the said notice dated 02.6.2016 and has thus failed to visualize the contents of
the entire notice in its true perspective and in the light of the statutory provision under Section 138 of the said Act as well as in accordance with the dictum of the Hon'ble Supreme Court in the reported decision of Suman Sethi (Supra).
6. Learned Advocate for the Appellant thus submits before this Court that the instant appeal may be allowed by setting aside the impugned judgement as well as by upholding the judgement as passed by the learned Trial Court wherein the Accused/Respondent herein was found guilty under Section 138 of the said Act.
7. Per contra Mr. Sabir, learned Advocate appearing on behalf of the Respondent no.1/Accused also draws attention of this Court to the notice dated 02.6.2016 as has been exhibited before the learned Trial Court. It is submitted by Mr. Sabir that learned 1st Appellate Court is very much justified in holding that the said notice dated 02.6.2016 is bad in the eye of law since the said notice did not specify the exact amount of demand and therefore there is no justification to interfere with the impugned judgement.
8. It is submitted further on behalf of the Respondent no.1/Accused that from the contents of the notice, the body of the complaint as well as from the contents of the plaint in Other Suit No.10 of 2016 as filed by the present Appellant against the Respondent no.1 and others, it would reveal that there was a business transaction
between the parties relating to the development of the property wherein monetary transaction took place between the parties and therefore the exact amount of the alleged consideration money needs to be specifically mentioned in the notice of demand. It is submitted that since the notice dated 02.6.2016 was not specific regarding the quantum of demand which must be equivalent to the cheque amount the case of the appellant falls short of the requisite requirement as enshrined in Section 138 proviso Clause (b) of the said Act.
9. Mr. Sabir in course of his argument placed his reliance upon a reported decision of Hon'ble Supreme Court in K.R. Indira vs. Dr. G. Adinarayan reported in 2004 Criminal Law Journal-Page 5 in connection with Criminal Appeal No.1136 of 2001 with Criminal Appeal No.1137 of 2001. Learned Advocate for the Respondent no.1 also submits that learned 1st Appellate Court correctly interpreted the actual provision of law in the light of the decision of the Hon'ble Apex Court in the case of Suman Sethi (Supra). Learned Advocate for the Respondent no.1 thus submits that it is a fit case for dismissal of the instant appeal.
10.
In course of hearing Mr. Sumit Karmakar, learned Public Prosecutor, submits before this Court that the legality, validity and correctness of the notice dated 02.6.2016 is the subject matter of the instant appeal. It is submitted by him that though in the penultimate
paragraph of the said notice the cheque amount has not been mentioned specifically but in other paragraphs of the said notice the cheque amount has been specifically mentioned as balance consideration money.
Mr.
Karmakar, learned Public Prosecutor, thus requests this Court to make a proper interpretation regarding the legality of the said notice in the context of the facts and circumstances as involved in this appeal.
11.
On perusal of the entire materials as placed before this Court and after hearing the respective arguments of the learned Advocates for the contending parties it appears to this Court that in between the Appellant and the Respondent no.1 herein some business transactions took place regarding to the transfer and development of three plots of land of which the present Appellant claims to be the co-owner. Materials have been placed before this Court that on account of sale of the said properties in favour of the Respondent no.1 by the Appellant some monetary transactions both in cash as well as by cheque took place. It is the case of the complainant before the learned Trial Court that part of the consideration money amounting to Rs.50 lakhs was paid by the Respondent no.1 herein by issuing two account paying cheque of Rs.25 lakhs each. It is the case of the complainant that those cheques were presented for encashment with his banker but those were dishonored on account of insufficiency of fund. The complainant found no other
alternative but to issue a notice dated 02.6.2016 under Section 138 Proviso (b) of the said Act within the statutory period. The Respondent allegedly did not pay the cheque amount despite service of notice upon him and thus the Appellant approached the learned Trial Court and filed the aforementioned complaint case wherein the Respondent no.1 was found guilty and was thus convicted.
12.
On perusal of the judgement of the 1st Appellate Court which is impugned before this Court it appears to this Court that the learned 1st Appellate Court placed his reliance upon the reported decision of Suman Sethi (Supra) and came to a conclusion that the legal notice dated 02.6.2016 does not contain any specific demand of the cheque amount and thus held that the notice is defective since the same falls short of the statutory requirement and thus upset the judgement as passed by the learned Trial Court.
13.
At this juncture, I propose to look to the provision of Section 138 of the N.I. Act and the same is reproduced below in verbatim hereunder:-
138. Dishonour of cheque for insufficiency, etc., of funds in the account.-Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be
deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, 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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation.-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
14.
Since the 1st Appellate Court as well as both the learned Counsels appearing for the Appellant and the Respondent no.1 heavily relied upon the reported decision of Suman Sethi (Supra) this Court proposes to look to the relevant portions of the said reported decision and the same is as under:- "---------------------------------------------------------------------------------------- There is no ambiguity or doubt in the language of Section
138. Reading the entire Section as a whole and applying commonsense, from the words, as stated above, it is clear that the legislature intended that in notice under clause (b) to the proviso, the demand has to be made for the cheque amount. According to Dr. Dhawan, the notice of demand should not contain anything more or less that what is due under the cheque.
It is 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 a 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 the break up 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 ommbus demand is made without specifying what was due under the dishonored cheque, notice might well fail to meet the legal requirement and may be regarded as bad.
This Court had occasion to deal with Section 138 of the Act in Central Bank of India & Anr. v. M/s. Saxons Farms & Ors., JT (1999) 8 SC 58 and held that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Though in the notice demand for compensation, interest, cost etc. is also made drawer will be absolved from his liability under Section 138 if he makes the payment of the amount covered by the cheque of which he was aware within 15 days from the date of receipt of the notice or before complaint is filed. ------------------ ---------------------------------------------" 15.
It is pertinent to mention herein that the learned 1st Appellate Court has also quoted the aforementioned paragraphs of the reported decision of Suman Sethi (Supra) in the impugned judgement. At this juncture I propose to look to the notice dated 02.6.2016 as issued by the learned Advocate for the Appellant to the Respondent no.1.
16.
For effective adjudication of the instant lis this Court considers that some paragraphs of the notice dated 02.6.2016 are very much relevant and those are also quoted hereinbelow in verbatim:- "---------------------------------------------------------------------------------------
8. That it is pertinent to mention here that in order to save taxes you have shown a consideration amount to the extent of Rs.1.5 Crores only instead of Rs. 3 Crores and on objection by my client you stated that my client need not to
worry as you would pay the amount and thus you handed over two number of cheques bearing No.521349 & 521350 of State Bank of India, Junglighat Branch of the account bearing No. 31521261336 for balance consideration on the date of execution of Sale Deed.
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13. That you are liable to pay a sum of Rs.50,000,00.00 (Rupees Fifty Lakhs only) covered by your cheque along with interest.
I, therefore though this notice call upon you to take necessary steps to pay the balance consideration within 15 days from the date of receipt of this notice, failing which I have instructions from my client to initiate appropriate legal action against you to seek redress of his grievances. Please note in such eventually you would be saddled with cost and consequence thereof."
17.
In course of his argument Mr. Sabir was very vocal that from the last paragraph of the notice dated 02.6.2016 it would reveal that the demand was not made for the cheque amount which is a mandatory requirement under Section 138 Proviso (b) of the said Act and therefore learned 1st Appellate Court rightly noticed such deficiency in the light of the observation of the Hon'ble Supreme Court in Suman Sethi (Supra) case which is however disputed by Ms. Zinu in course of her argument. 18.
Admittedly in the penultimate paragraph of the notice dated 02.6.2016 the exact amount of the cheque has not been mentioned and on the contrary demand has been made on behalf of the present appellant from the Respondent no.1 to pay the balance consideration money. However, on conjoint perusal of the Paragraphs 8 and 13 of the said notice it reveals that the quantum of the consideration money has been specifically mentioned to
the tune of Rs.50 lakhs and it has also been specifically mentioned that the quantum of the balance consideration money is equivalent to the amount of money as mentioned in the two cheques which have been dishonoured on presentation to the Banker by the Appellant.
19.
In considered view of this Court, learned 1st Appellate Court has failed to appreciate the actual spirit of law as discussed in the reported decision of Suman Sethi (Supra) wherein the Hon'ble Apex Court was of the view that the notice has to be read as a whole and the demand has to be made for the cheque amount.
20.
It appears to this Court while issuing the notice dated 02.6.2016 though in the penultimate paragraph instead of mentioning of the specific amount of Rs.50 lakhs it has been mentioned as consideration amount but the quantum of the said consideration amount has specifically mentioned in Paragraphs 8 and 13 of the said notice dated 02.6.2016 and therefore this Court considers that the said notice dated 02.6.2016 is not vague in any way so far as the quantum of dishonoured cheque amount is concerned.
21.
Mr. Sabir, learned Advocate for the Respondent no.1 though placed his reliance upon the reported decision of K.R. Indira (Supra) but in considered view of this Court
the said reported decision practically supports the case of the Appellant and not of the Respondent no.1. 22.
This Court is in respectful disagreement with the submission of Mr. Sabir that on the self same cause of action a Civil Suit has been filed by the present appellant and therefore the same needs to be looked into in the instant appeal. This Court considers that while deciding a case under Section 138 of the said Act the Trial Court as well as the Appellate Court are duty bound to come to a finding as to whether all the ingredients of Section 138 of the said Act has been proved or not. 23.
Before the learned Trial Court sufficient materials have been placed that two dishonored cheques were issued by the Respondent no.1 herein. Evidence were led that those two cheques were issued in discharge of debt i.e. for payment of the balance consideration money. The execution of the cheques-in-question have also been proved in accordance with law. The notice dated 02.6.2016 was served within the statutory period and the case was also filed within the period as prescribed by the law.
24.
This Court thus finds sufficient merits in the instant appeal and accordingly the instant appeal is allowed. 25.
Consequently the impugned judgement dated July 27, 2022 as passed in Criminal Appeal No.3 of 2021 by the
learned Sessions Judge in Criminal Appeal no.3 of 2021 is hereby set aside.
26.
Consequently the judgement and order of sentence dated 09.2.2021 as passed by learned Judicial Magistrate (1st Class), 2nd Court, South Andaman, Port Blair in C.R. Case No.79 of 2016 is hereby upheld.
27.
The Respondent no.1 is hereby directed to surrender before the learned Trial Court within a month from today for serving remaining part of his sentence failing which learned Trial Court is hereby directed to issue nonbailable warrant of arrest against the Respondent no.1 Niloy Banerjee for his apprehension and arrest. 28.
Liberty is given to the learned Advocate for the Appellant to communicate the Server Copy of this order to the learned Trial Court.
29.
Learned Trial Court is directed to act on the Server Copy of this order.
30.
Urgent Photostat certified copy of this order be supplied to the parties after compliance of all required formalities.
(Partha Sarathi Sen, J.)