ORDER
Pratibha Upasani, J.
1. This Criminal Revision Application is filed by the petitioner/original complainant, being aggrieved by the order dated 2nd July, 1993, passed by the Metropolitan Magistrate, 33rd Court, Ballard Estate, Bombay, dropping the proceedings against the accused persons/Respondent Nos. 1 and 2 herein, in Case No. 140/S/92.
2. Few facts, which are required to be stated, are as follows :
The complainant/petitioner filed complaint in the Court of the Metropolitan Magistrate, 33rd Court, Ballard Estate, against the present respondent Nos. 1 and 2 under Section 138 of the Negotiable Instruments Act, 1881.
3. The complainant/Harnmanna S. Nayak in his complaint dated 14th July, 1992, had averred that he was working as Marketing Officer with Tata Metals and Strips Limited, having its office at Bombay House, 24, Homi Mody Street, Fort, Bombay – 400 001. His company manufactures Cold Rolled and Hot Rolled Steel Strips and markets the same throughout India. The complainant is authorised by his Company to file this complaint for and on behalf of the company.
4. The complainant has further stated that accused No. 1 /Vijay Kumar Kalani is the Managing Director of accused No. 2-M/s. Geekay Metals Private Ltd., having its office at Indore in the State of Madhya Pradesh. Accused No. 1 being the Managing Director of Accused No. 2, is the person incharge of and responsible for the conduct of business of accused No. 2. The complainant has averred that his company, from time to time, had been conducting auction sales of scraps of CR/HR strips stiltings and cut pieces through auctioneers M/s. A. H. Billimoria & Co. One such auction was held at Bombay on 21st January, 1992 for which bids were invited .Accused No. 2 had tendered its bids in the respect of certain items and ultimately the contract for sale of the said items was awarded to accused No. 2 Company. In the process of lifting these scrap items sold by the Complainant’s Company, accused No. 2-Company handed over few out-station cheques in favour of the complainant’s Company, who discounted the said cheques with the complainant’s Company’s Bankers with an understanding that accused No. 2 – Company would bear all Bank charges including overdue interest in connection therewith. This was done by the Complainant’s Company. However, out of the cheques given by accused No. 2-Company, 3 cheques viz., Cheque No. 0119125 dated 25th March, 1992 for Rs. 1,85,113/-, Cheque No. 0119127 dated 27th March, 1992 for Rs. 1,67,221/-and Cheque No. 0119128 dated 30th March, 1992 for Rs. 95,791/-, totalling to Rs. 4,48,125/-, all in favour of the complainant’s Company and drawn on Bank of Baroda, Siyalganj Branch, Indore, were returned dishonoured by the complainant’s Company’s Bank, situated at Cowasjee Patel Street, Fort, Bombay- 400 001, by its three separate intimations dated 21st May, 1992, respectively along with Bank of Baroda’s memo with an endorsement “Not arranged for”. The complainant’s Company thereafter sent a Registered Post letter, dated 28th May, 1992, through their Attorney, addressed to accused No. 2, setting out true facts and called upon accused No. 2 to pay to the complain-‘ ant’s Company, the amount of Rupees 4,60,354/-, which included a sum of Rupees 12,229/-, which was recovered from the complainant’s Company by its Bankers as overdue interest. This communication was received by accused No. 2-Company on or about 4th June, 1992. The accused, through their Advocate’s reply dated nil received on 8th July, 1992, did not dispute the liability but requested for certain adjustments.
5. The complainant has, therefore, submitted that the accused had issued the said three cheques mentioned above, in discharge of their liability for the payment of Rs. 4,48,125/- to the complainant’s Company, but that those cheques were returned by the Bank unpaid because of the fact that moneys standing to the credit of that account was insufficient to honour the said cheques and, therefore, accused No. 2 had committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 as amended. Since accused No. 1 was the Managing Director of accused No. 2 – Company, at the relevant time, and was in charge of and responsible to accused No. 2 for the conduct of its business, according to the complainant, accused No. 2 as well as accused No. 1 should be deemed to have committed the offence under Section 138 of the Negotiable Instruments Act, 1881 and, therefore, prayed that they be dealt with in accordance with law.
6. The process was issued accordingly against the accused, who appeared and made applications dated 26th March, 1993 and 23rd March, 1993 to drop the proceedings against the accused. Their contention, in short, was that the amount of Rs. 4,35,875/- was deposited by way of earnest money by the accused with the complainant’s Company and that the said Company was entitled to claim the balance, after making due adjustment of earnest money, which the complainant’s Company had wilfully refused to do. The accused contended that they were always ready and willing to pay the balance amount, after adjustment of earnest money, which was deposited. They also raised the point of jurisdiction. They also raised other technical objections, the main amongst it was that, the demand notice issued by the complainant through their Advocate, was the notice given in pursuance of Section 434 of the Companies Act for recovery of the amount and winding up of the Company and that the complainant’s company was not having intention at the time of giving the said notice dated 28th May, 1992, for the purpose of lodging prosecution under Section 138 of the Negotiable Instruments Act, 1881. It is contended that, in the said notice, the petitioners were called upon to pay a sum of Rs. 4,60,354/- within 21 days of the receipt of the notice and that Section 138(b) and (c) of the Negotiable Instruments Act, 1881, specifically asks the complainant to make a demand for the payment of the said amount of money by giving notice in writing to the drawer of the cheque within fifteen days of the receipt of the information. According to them, the demand notice has to be of 15 days and that this period cannot be reduced by even one day or cannot be extended beyond the period of 15 days. In short, it is their contention that the statutory notice is not specifically given by the complainant’s Company under Section 138 of the Negotiable Instruments Act, 1881 and, therefore, no prosecution can be launched by them under Section 138 of the Negotiable Instruments Act, 1881.
7. The accused in their application dated 26th March, 1993, raised the above contentions and prayed that the proceedings against them be dropped. The learned Metropolitan Magistrate, 33rd Court, Ballard Estate, Bombay, after hearing both the sides, allowed the said application of the accused and dropped the proceedings against them. It was held by the learned Magistrate that the specific statutory notice in spirit of law under Section 138 of the Negotiable Instruments Act, 1881, was not served upon the accused and also not complied with the provisions of law and, therefore, he was compelled to drop the proceedings against the accused. Being aggrieved by the said order, the original complainant approached this Court by way of filing this Criminal Revision Application.
8. Mr. Menon appearing for the complainant/applicant relied upon various Supreme Court and High Courts Judgments to substantiate his arguments that the demand notice served upon the respondents/original accused Nos. 1 and 2 was legal and valid. Firstly he relied upon the Judgment of the Supreme Court reported in 1999 SCC (Cri) 1411 : 1999 Cri LJ 4571 (Central Bank of India v. Saxsons Farms, which has specifically held that the provisions of Section 138 proviso, clause (b) prescribe no form of notice and that requirement was only that notice should be in writing, that be given within 15 days of the receipt of information regarding return of cheque unpaid and a demand for payment of the amount of the cheque be made in the notice. In this case, Respondent No. 1, a partnership firm had taken a loan over 1 crore rupees from the appellant-Bank. The respondent issued three cheques dated 29th March, 1994 for the amounts of Rs. 1 lakh, Rs. 2 lakh and Rs. 39,50,000/- towards part-payment of the loan. These three cheques, when presented, were returned unpaid with the remark, “funds insufficient” on each. The appellant then sent, through their Advocate, two registered notices dated 2nd May, 1994 and 27th June, 1994. These notices were admittedly received by respondent No. 1. These notices mentioned that the appellant reserved the right to initiate appropriate criminal cases and ended with the sentence, “Kindly arrange to make the payment of the cheques if you intend to avoid unpleasant action of my client”. Upon the second presentation of cheques, they were returned with the remark, “funds insufficient”. The appellant then filed two complaints under Section 138 of the Negotiable Instruments Act, 1881 in the Court of the Judicial Magistrate, First Class, where cognizance was taken. The High Court of Madhya Pradesh, however, quashed the criminal proceedings under Section 482 of the Code of Criminal Procedure, 1973 on the ground that there was no proper notice as prescribed under Section 138 of the Negotiable Instruments Act, 1881. While allowing the appeal of the Bank, the Supreme Court held as follows :
The object of notice is to give a chance to the drawer of the cheque to rectify his omission and also to protect an honest drawer. Service of notice of demand in clause (b) and proviso to Section 138 is a condition precedent for filing a complaint under Section 138 of the Negotiable Instruments Act, 1881.
9. The Supreme Court also held that though no form of notice is prescribed in clause (b) of the proviso to Section 138 of the Negotiable Instruments Act, 1881, the requirement is that the notice should be given in writing within 15 days of receipt of information from the Bank regarding return of the cheque as unpaid and in the notice a demand for payment of the amount of the cheque has to be made. In this case (supra), it was held by the Supreme Court that the line in the notice, “Kindly arrange to make the payment to avoid the unpleasant action of my client”, was a clear demand required by clause (b) of proviso to Section 138 of the Negotiable Instruments Act, 1881. The Supreme Court, thus, held that the High Court had erred in overlooking the line in the notice and in holding that there was no demand of payment.
10. For the purpose of present case at hand, what is important to note from the above-mentioned observation of the Supreme Court Judgment is that, there is no form prescribed of the Notice and the only essential elements of the notice are : (1) it has to be in writing, (2) it has to be given within 15 days of receipt of information regarding return of cheque unpaid and (3) demand for payment of the amount of the cheque has to be made in the notice. In the present case at hand, such a demand is very much there in the notice dated 28th May, 1992 sent by the complainant’s Company through their Attorney.
11. While commenting on para 6 of the notice, which called upon the accused to make the payment of Rs. 4,60,354/- within 21 days of the receipt of this notice, Mr. Menon vehemently argued that the demand notice does not become invalid just because there is a mention of 21 days in it. He submitted that in fact, mentioning of any period in the notice within which the payment of cheque is to be made, is not at all necessary. To substantiate this argument, he relied upon 1998 Cri LJ 2309 (Satyavan Chaplot v. Rajendra). In this case, the learned single Judge of the Rajasthan High Court has observed that a bare perusal of the provison given in Section 138 of the Negotiable Instruments Act, shows that the notice, which is required to be served by the payee or the holder in due course of the cheque, is not required by law to contain a statement to the effect that the amount should be paid within any period of time. He has further observed that, therefore, if the sender of the notice has mentioned any period in his notice, within which the amount is to be paid, such mention of the period within which the amount is to be paid, would be unnecessary in view of the proviso given to Section 138 of the Act and that there is no violation of law if any particular period within which payment is to be made is mentioned in the notice and such period is other than the less or more than 15 days.
12. Mr. Menon also relied upon 1998 Cri LJ 3273 Ravinder Kumar Mahajan v. Sohan Lal. In this case, Punjab and Haryana High Court has held that even if the complainant gave a notice demanding payment of the cheque amount within 7 days, that will not invalidate the notice under Section 138(b) of the Act as the respondents/accused were entitled to make payment within 15 days of the receipt of the notice.
13. Mr. Menon also relied upon 1998 Cri LJ 748 K. Murlidhar Rao v. State of Andhra Pradesh. In this case, Andhra Pradesh High Court has held that upon dishonour of cheque, issuance of demand notice mentioning 15 days’ time for drawer to pay the amount is not contemplated by Section 138 of the Negotiable Instruments Act, 1881. It is further observed that payee or holder in due course has to wait for 15 days after receipt of the notice by drawer to lodge complaint and payee demanding drawer to pay the amount within 15 days, by itself is no ground to quash the complaint – More so, when complaint was filed within one month after expiry of 15 days from the date of receipt of notice.
14. Having heard Mr. Menon and having gone through all the authorities relied upon by Mr. Menon and after going through the proceedings, I find substance in the case of the complainant. Mr. Salvi, the learned A.P.P. appearing for the State also concedes that just because period of 21 days is mentioned in the demand notice, that by itself does not make the notice illegal. Thus, it is obvious that the learned Metropolitan Magistrate committed error in dropping the proceedings against the accused. The notice given by the complainant was valid and proper. Hence, the following order :
Criminal Revision Application No. 180 of 1993 is made absolute in terms of prayer clause (b). Criminal Case No. 140/S/92 on the file of the Metropolitan Magistrate, 33rd Court, Ballard Estate is restored to file and he is directed to proceed with the case in accordance with law. Respondent Nos. 1 and 2 to remain present in the Lower Court on 10th August, 2000.
