Skip to main content

Cheque drawn and issued by a third party comes within purview of Section 138 of NI Act

In Vijuna V.K. Vs. Mithun K. and Ors., appeal was filed before the Kerala High Court against the order of the trial court sentencing the accused to simple imprisonment of 3 months and a fine of Rs. 3.50 Lakhs.

The complaint contended that he had provided a loan of Rs. 4.5 lakhs to the husband of the accused of which he returned only Rs. 1 Lakh. The accused undertook the liability of her husband for the balance amount of Rs. 3,50,000/- and issued a cheque  for that amount to the complainant in discharge of the liability. An agreement had also been executed in relation to the transaction. The complainant presented the cheque in the bank. It was returned unpaid for the reason that there was no sufficient amount in the account of the accused.

The plea of the accused is that she had not issued cheque to the complainant but the complainant had misused the cheque which he had got from her husband.

On appeal, the Kerala High Court decided that it is true that the accused had issued the cheque to the complainant not in discharge of any amount due from her to the complainant. What is proved is that she had drawn and delivered the cheque to the complainant in discharge of the liability of her husband to the complainant. The fact, that the accused had drawn and delivered the cheque to the complainant in discharge of the amount due from her husband to the complainant and not in discharge of any amount due from herself, does not mean that the offence under Section 138 of the Act is not attracted. Cheque drawn and issued by a person to the complainant, in discharge of the debt owed by another person to the complainant, comes within the purview of Section 138 of the Act (See Anil Sachar v. M/s. Sree Nath Spinners: MANU/SC/0838/2011 : AIR 2011 SC 2751, Alexander v. Joseph Chacko: MANU/KE/0072/1993 : 1993 (2) KLT 326, Komalam v. Mohanakumar: MANU/KE/0504/2008 : 2009 (3) KHC 269 : 2009 (3) KLT 263, Gopi v. Sudarshanan: 2002 KHC 4793 : 2002 (2) KLT 606 and Alex P. Oommen v. K.S.F.D.C. : MANU/KE/2017/2012 : 2012 (4) KHC 126).

The High Court also rejected the contention of the accused that the complainant had not sent the statutory notice to the accused in her correct address. Section 27 of the General Clauses Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. When the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of the proviso to Section 138 of the Act stands complied with. Where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the General Clauses Act would be attracted.

On a query made by this Court, whether the accused had received summons in the case from the trial court with a copy of the complaint, learned counsel for the petitioner answered in the affirmative. In C.C. Alavi Haji v. Palapetty Muhammed: MANU/SC/2263/2007 : (2007) 6 SCC 555, the Supreme Court has held as follows:

"Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act".

The court also found no merit in the contention of the learned counsel for the petitioner that notice does not contain particulars of the transaction and therefore, it is defective. The notice of demand for payment of the amount of the cheque need not state the nature of the liability or particulars of the transaction.

The High court therefore decided that there is no fault in the order of the trial court and that the appellate court had by reducing the sentence to imprisonment till the rising of the court had already shown the maximum possible leniency.

Comments

Most viewed this month

Power of Attorney holder can also file cheque bounce cases: Supreme Court

The Supreme Court has held that a criminal complaint in a cheque bounce case can be filed and pursued by a person who holds a power of attorney (PoA) on behalf of the complainant. A three-judge bench headed by Chief Justice P Sathasivam gave the "authoritative" pronouncement on the issue, referred to it by a division bench in view of conflicting judgements of some high courts and the apex court. "We are of the view that the power of attorney holder may be allowed to file, appear and depose for the purpose of issue of process for the offence punishable under Section 138 of the Negotiable Instruments Act (which deals with cheque bounce cases)," the bench, also comprising justices Ranjana Prakash Desai and Ranjan Gogoi, said. The bench, in its judgement, said, "...we clarify the position and answer the questions in the following manner: "Filing of complaint petition under Section 138 of Negotiable Instruments Act through PoA holder is perfectly legal...

Partition proceedings are vitiated even if single co-sharer is not made party or is not served in accordance with law

Cause Title :  Bhagwant Singh vs  Financial Commissioner (Appeals) Punjab, Chandigarh,  CWP-2132-2018 (O&M), High Court Of Punjab & Haryana At Chandigarh Date of Judgment/Order : 31.08.2022 Corum : Hon’ble Mr. Justice Sudhir Mittal Background A large parcel of land was owned by the Nagar Panchayat. Thereafter, some of the co-sharers sold their shares to third parties including the petitioners herein. On 22.11.1995, respondents No.3 to 5 filed an application for partition of the land. The petitioners were not impleaded as parties.  On completion of proceedings, sanad was issued on 28.08.1996. Vide two separate sale deeds dated 28.05.2008 respondents No.3 and 5 sold some portion in favour of respondent No.6 and 7. These respondents sought implementation of the sanad resulting in issuance of warrants of possession dated 05.06.2008. Allegedly, it was then that the petitioners realized that joint land had been partitioned and that proceedings h...

Consumer forum can use forensic examination to settle disputes - NCDRC

A consumer forum has to follow a summary procedure for the adjudication of complaints. But at times, the authenticity and credibility of the evidence is challenged as fabricated. In such a situation, sometimes, a consumer forum refuses to weigh a complaint on the grounds that it involves adjudication of complicated facts. It, instead, asks the parties to approach the regular civil court. This is incorrect. In such a case, a consumer forum isn't helpless; it can obtain evidence by referring the documents for examination by experts. This significant ruling was given by a National Commission bench of judges K S Chaudhari and Suresh Chandra in revision petition number 2008 of 2012 on February 11, 2012 (The New India Assurance Co Ltd v/s Sree Sree Madan Mohan Rice Mill). The rice mill claimed a fire had broken out at its office-cum-manufacturing unit. An insurance claim was lodged for the loss. The insurance company didn't settle the claim. Aggrieved, the mill filed a complaint ...