However, it is seen from the impugned judgment and order
that the learned Magistrate has misdirected himself in reading the
evidence available on record so as to incorrectly find that the notice
(Exh.33) issued by the appellant was invalid. It is true that in this
notice the appellant has not mentioned the amount of the cheque
either in figures or in words. What the appellant has mentioned is the
number of the cheque as 656523, date of the cheque being
23/02/1998, name of the Bank on which it was drawn and name of
the Bank to which it was presented for encashment. Then, it is also
mentioned in the notice that the appellant was calling upon the
respondents to pay to the appellant within 15 days of receipt of the
notice the “amount of the cheque”. It is significant to note that in this
notice, except for the amount of the cheque, no other dues or money
have been claimed by the appellant. The notice clearly shows that
what was ultimately demanded by the appellant from the respondents
was nothing but the amount of the cheque. So, it would be important
for this Court to examine whether there was any doubt about the
amount of cheque No.656523 dated 23/02/1998 in the mind of the
respondents.
9. If one goes through the reply of the respondents vide Exh.
39, one would find that respondent No.2 had absolutely no doubt in
his mind about the amount of the cheque and it was of Rs.25,000/.
Even before dishonour of the cheque, the evidence shows, respondent
No.2 had admittedly sent a letter dated 07/3/1998 informing the
applicant that respondent No.2 had not received the payment of Rs.
25,000/, being the amount of the cheque. Thus, this evidence
establishes beyond reasonable doubt that there was absolutely no
confusion or doubt in the mind of respondent No.2 that the amount of
cheque No.656523 dated 23/02/1998 drawn on Jintur Urban CoOp.
Bank was of Rs.25,000/ only. I must say, at this stage, there is no
dispute about issuance of the cheque and it is nobody's case that there
were other cheques of the same date which were dishonoured. In fact,
there is also no doubt about the validity of the notice vide Exh.33 with
no challenge having been made to it on this count at any point. This
can be seen from the reply given by respondent No.2 to the notice vide
Exh.33. Even in the evidence of respondent No.2, no challenge to the
validity of the notice has been made on the ground that the notice
suffered from the vice of vagueness on account of non mentioning of
the amount of the cheque in a specific manner. All these facts would
together show that the parties had understood as to what was the
amount of the cheque and what was due from the drawer under the
cheque to its payee. As such, the learned Magistrate could not have
dismissed the complaint by holding, albeit wrongly, that the notice was
invalid.
10. While recording a wrong finding not based upon the
evidence, the learned Magistrate has misinterpreted the judgment of
the Hon'ble Apex Court rendered in the case of Suman Sethi (supra).
In this case the Hon'ble Apex Court has clearly held that it is well
settled principle of law that the notice has to be read as a whole and in
the notice, demand has to be made for “said amount” i.e. cheque
amount and if no such demand is made, it would have to be examined
if the notice is bad or not on this count by considering the language of
the notice. If, in the notice, a demand has been made not only for the
amount of the cheque but also for the interest and other charges, then
it would be necessary to bifurcate all these amounts by specifying as to
what is due under the cheque and what is due on other counts. But, if
no such bifurcation is made and an omnibus demand is made inclusive
the amount of the cheque as well as the amount due on account of
interest, damages and other charges, such notice would be invalid in
law. The learned Magistrate, confused himself in understanding the
law so laid down by the Hon'ble Apex Court and it appears that the
learned Magistrate was swayed away by some of the observations of
the Hon'ble Apex Court, which he reproduced in the impugned
judgment and order by picking them up half heartedly. Therefore, I
find it necessary to reproduce the relevant observations of the Hon'ble
Apex Court as appearing in paragraph8 of the said judgment in their
entirety and they read as under.:
“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 up
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
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.
11. The above referred observations make it clear that in every
case a notice can not be held to be bad only for failure to specify
therein the amount of the cheque and it would depend upon the
language of the notice to come to an appropriate conclusion in the
matter. I have already considered the evidence brought on record by
both the sides and found that this evidence sufficiently establishes the
fact that the notice was complete in all sense and specific demand was
made for payment of the “amount of the cheque” and that there being
no doubt or confusion or dispute about the amount of the cheque, the
notice conveyed what it ought to have and, therefore, valid in the eye
of law.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
CRIMINAL APPEAL NO. 225 OF 2001
Kamal s/o Babulal Sharma
.. Versus ..
Ramkumar Sagarmal (HUF)
CORAM : S. B. SHUKRE, J.
DATED : 25th SEPT., 2014.
Citation: 2016 ALLMR(CRI)2652
1. This appeal is directed against the judgment and order
dated 08/6/2001 passed in Summary Criminal Case No.14408 of 1998
by 9th Judicial Magistrate, First Class, Akola, thereby acquitting the
respondentsaccused of the offence punishable under Section 138 of
the Negotiable Instruments Act, 1988 (the N.I. Act, for short). The
criminal proceedings initiated under Section 138 of the N.I. Act against
the respondents related to a cheque bearing No.656523 dated
23/2/1998 for Rs.25,000/ It was issued by respondent No.1 being
the HUF of which respondent No.2 was the manager at the relevant
time. It was signed by respondent No.2 as the manager of respondent
No.1HUF. According to the appellant, the cheque was issued towards
the satisfaction of legally enfoceable liability. It was the case of the
appellant that the appellant had given an amount of Rs.25,000/ by
way of a hand loan and the repayment thereof was to be made by a
cheque. Therefore, a postdated cheque came to be issued by the
respondents in favour of the appellant. The cheque was drawn on The
Jintur Urban CoOperative Bank Ltd., Akola. When the cheque was
presented on 20/3/1998 to the Bank of the appellant, The Akola Janta
Comm. CoOp. Bank Ltd., Akola on 20/3/1998, it could not be
honoured and was returned on 21/3/1998 on the ground that
'payment stopped by the drawer'.
2. Upon return of the cheque by the Bank of the appellant, the
appellant issued notice within the stipulated period of time to the
respondents calling upon them to make payment of the cheque
amount. The respondents replied the notice. While the respondents
did not deny issuance of the cheque, they took a stand that first cheque
was issued by the respondents on the assurance given by the appellant
that amount of the cheque would be sent later on by the appellant. It
was submitted that thereafter the appellant never sent the amount of
the cheque and, therefore, they sent a letter to the appellant requesting
him to send the amount of the cheque, but in vain. According to the
respondents, the cheque came to be issued without incurring of any
liability by them and, therefore, there was no question of making
payment of the cheque amount.
3. The proceedings under Section 138 of the N.I. Act, upon
denial of the liability by the respondents, came to be initiated and the
respondents were prosecuted for an offence relating to dishonour of
the cheque. After considering the evidence on record and hearing the
arguments of both sides, the learned Magistrate found that the cheque
in question was issued towards discharge of legally enfoceable liability
by the respondents and that the respondents could not rebut the
presumption raised in law in this regard as per Section 139 of the N.I.
Act. Even then, the trial Court did not find the respondents as guilty of
the offence with which they were charged and the reason therefor was
that the notice issued by the appellant demanding payment of the
amount of the cheque was invalid. According to the learned
Magistrate, this notice did not specify the amount of the cheque in any
manner. Thus, the respondents were given acquittal by the judgment
and order dated 08/6/2001. It is the same judgment and order, which
are under challenge in the present appeal.
4. This appeal is on Board of final hearing for quite some time.
The roznama shows that even though the respondents were duly
served with notice and are also represented by their Advocate, nobody
has appeared on behalf of the respondents. The appeal is of the year
2001 and over ripe for final hearing. The requirement of Section 386
Cri. P. C. is that in an appeal filed under Section 377 or 378 of Code
of Criminal Procedure, the accused should be heard only if he appears
and if he does not appear in spite of being duly served, the appeal has
to be decided on merits, but subject to the condition that it should be
done after perusing the record. The law only expects the appellate
Court to dispose of the appeal on merits after perusal and scrutinising
of the record and the requirement of hearing of the appellant or the
accused comes into play only if they appear or any of them appears.
The law in this regard has been settled by the Hon'ble Apex Court in
the case of Bani Singh & others Vs. State of U. P. (1996) 4 SCC 720,
to which a useful reference may be made.
5. In these circumstances, I have heard Shri Panpalia, learned
Counsel for the appellant. I have carefully gone through the impugned
judgment and order and also perused the record of the case.
6. Shri Panpalia, submitted that in this case there were no
other cheques involved so as to create a doubt about the amount of the
cheque. He further submits, the evidence on record would show that
respondent No.2 has admitted the fact that he was aware of the
amount of the cheque and it was of Rs.25,000/. In the notice issued
by the appellant vide Exh.33 what was demanded was the amount of
the cheque after mentioning the cheque number and also the date of
the cheque and that in the reply given to the notice (Exh.39), the
respondent nowhere disputed the validity of the notice on the ground
that it is vague and does not specify the amount of the cheque, so
submits the learned Counsel. He further submits that the learned
Magistrate has misinterpreted the ratio of the case of Suman Sethi Vs.
Ajay K. Churiwal & another – AIR 2000 SC 828 and wrongly
concluded that the notice was invalid and, therefore, the complaint
was not maintainable.
7. Insofar as the aspect of the rebuttal of presumption under
Section 139 of the N.I. Act is concerned, there is absolutely no
evidence brought on record by the respondents to enable the Court to
uphold the contention that this presumption has been rebutted by the
respondents. A bald statement has been made in defence that the
cheque in question was issued by respondent No.2 on behalf of
respondent No.1 as it was promised by the appellant that amount of
the cheque would be sent by him to respondent No.2. No evidence nor
any material has been brought on record to probablise this defence.
Therefore, the finding recorded by the learned Magistrate that the
presumption under Section 139 has not been rebutted by the
respondents has to be upheld as legal and correct leaving no scope for
interference with it.
8. However, it is seen from the impugned judgment and order
that the learned Magistrate has misdirected himself in reading the
evidence available on record so as to incorrectly find that the notice
(Exh.33) issued by the appellant was invalid. It is true that in this
notice the appellant has not mentioned the amount of the cheque
either in figures or in words. What the appellant has mentioned is the
number of the cheque as 656523, date of the cheque being
23/02/1998, name of the Bank on which it was drawn and name of
the Bank to which it was presented for encashment. Then, it is also
mentioned in the notice that the appellant was calling upon the
respondents to pay to the appellant within 15 days of receipt of the
notice the “amount of the cheque”. It is significant to note that in this
notice, except for the amount of the cheque, no other dues or money
have been claimed by the appellant. The notice clearly shows that
what was ultimately demanded by the appellant from the respondents
was nothing but the amount of the cheque. So, it would be important
for this Court to examine whether there was any doubt about the
amount of cheque No.656523 dated 23/02/1998 in the mind of the
respondents.
9. If one goes through the reply of the respondents vide Exh.
39, one would find that respondent No.2 had absolutely no doubt in
his mind about the amount of the cheque and it was of Rs.25,000/.
Even before dishonour of the cheque, the evidence shows, respondent
No.2 had admittedly sent a letter dated 07/3/1998 informing the
applicant that respondent No.2 had not received the payment of Rs.
25,000/, being the amount of the cheque. Thus, this evidence
establishes beyond reasonable doubt that there was absolutely no
confusion or doubt in the mind of respondent No.2 that the amount of
cheque No.656523 dated 23/02/1998 drawn on Jintur Urban CoOp.
Bank was of Rs.25,000/ only. I must say, at this stage, there is no
dispute about issuance of the cheque and it is nobody's case that there
were other cheques of the same date which were dishonoured. In fact,
there is also no doubt about the validity of the notice vide Exh.33 with
no challenge having been made to it on this count at any point. This
can be seen from the reply given by respondent No.2 to the notice vide
Exh.33. Even in the evidence of respondent No.2, no challenge to the
validity of the notice has been made on the ground that the notice
suffered from the vice of vagueness on account of non mentioning of
the amount of the cheque in a specific manner. All these facts would
together show that the parties had understood as to what was the
amount of the cheque and what was due from the drawer under the
cheque to its payee. As such, the learned Magistrate could not have
dismissed the complaint by holding, albeit wrongly, that the notice was
invalid.
10. While recording a wrong finding not based upon the
evidence, the learned Magistrate has misinterpreted the judgment of
the Hon'ble Apex Court rendered in the case of Suman Sethi (supra).
In this case the Hon'ble Apex Court has clearly held that it is well
settled principle of law that the notice has to be read as a whole and in
the notice, demand has to be made for “said amount” i.e. cheque
amount and if no such demand is made, it would have to be examined
if the notice is bad or not on this count by considering the language of
the notice. If, in the notice, a demand has been made not only for the
amount of the cheque but also for the interest and other charges, then
it would be necessary to bifurcate all these amounts by specifying as to
what is due under the cheque and what is due on other counts. But, if
no such bifurcation is made and an omnibus demand is made inclusive
the amount of the cheque as well as the amount due on account of
interest, damages and other charges, such notice would be invalid in
law. The learned Magistrate, confused himself in understanding the
law so laid down by the Hon'ble Apex Court and it appears that the
learned Magistrate was swayed away by some of the observations of
the Hon'ble Apex Court, which he reproduced in the impugned
judgment and order by picking them up half heartedly. Therefore, I
find it necessary to reproduce the relevant observations of the Hon'ble
Apex Court as appearing in paragraph8 of the said judgment in their
entirety and they read as under.:
“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 up
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
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.
11. The above referred observations make it clear that in every
case a notice can not be held to be bad only for failure to specify
therein the amount of the cheque and it would depend upon the
language of the notice to come to an appropriate conclusion in the
matter. I have already considered the evidence brought on record by
both the sides and found that this evidence sufficiently establishes the
fact that the notice was complete in all sense and specific demand was
made for payment of the “amount of the cheque” and that there being
no doubt or confusion or dispute about the amount of the cheque, the
notice conveyed what it ought to have and, therefore, valid in the eye
of law.
12. In these circumstances, I find that the learned Magistrate
has committed a serious error of fact and law in recording a verdict of
acquittal of the respondents for the offence punishable under Section
138 of the N. I. Act and I find that the appellant has proved beyond
reasonable doubt his case against the respondents. As a sequel, the
verdict of acquittal is quashed and set aside and I find that respondents
are guilty of the offence punishable under Section 138 of the N. I. Act
and respondent No.2 being the manager of respondent No.1HUF,
would be liable to be receive the sentence.
13. At this stage, I have heard learned Counsel for the appellant
on the question of sentence. Respondent No.2 is not available as he has
not chosen to appear before the Court.
14. In the case of Kumar Exports Vs. Sharma Carpets 2009 (4)
Mh. L. J. 23, the Hon'ble Apex Court has held that once the appellate
Court , after hearing an appeal against acquittal, records conviction,
the powers enumerated in Section 386(a) of the Code of Criminal
Procedure, 1973 do not contemplate that appellate Court can remit the
matter to the trial Court for passing appropriate order of sentence.
The Hon'ble Supreme Court further observed that the judicial function
of imposing appropriate sentence must be performed only by the
appellate Court on reversing the order of the acquittal and not by any
other Court or otherwise, it is an abdication of its power in favour of
the trial Court. In view of this law, I have heard the learned Counsel
for the appellant on the point of the sentence.
15. Learned Counsel for the appellant submitted that at the
time when the cheque was dishonoured and liability under Section 138
of the N. I. Act arose, the maximum punishment prescribed for the
offence under Section 138 was of only one year and in this case, since
the cheque was issued towards discharge of commercial liability,
maximum punishment as prescribed by law needs to be imposed,
keeping in view the object of Chapter XVII of the N. I. Act, 1881
inserted by the Banking Public Financial Institutions and Negotiable
Instruments Laws (Amendment) Act, 1988. He also submits that
adequate compensation to the extent of Rs. 1 lac needs to be awarded
in this case.
16. In the case of Suganthi Suresh Kumar Vs. Jagdeeshan –
(2002) 2 SCC 420, the Hon'ble Apex Court after analysing various
judgments of the Supreme Court held that having regard to the object
of fastening of criminal liability for dishonour of cheque by inserting
ChapterXVII in the Negotiable Instruments Act, 1881, there was need
for making liberal use of the provision of awarding of compensation as
contained under Section 357(3) of Cri. P. C. The Hon'ble Apex Court
considered its own judgments rendered earlier in the case of
K. Bhaskaran Vs. Sankaran Vaidhyan Balan – (1999) 7 SCC 510 and
Harisingh Vs. Sukhbir Singh – (1988) 4 SCC 551. It referred to
Bhaskaran's case wherein it is observed that if a Judicial Magistrate of
the First Class was to order compensation to be paid to the
complainant from out of the fine realised, the complainant will be the
loser when the cheque amount exceeded the said limit of the Judicial
Magistrate to impose fine. It is further noted therein that in such a
case, a complainant would get only the maximum amount of rupees
five thousand and therefore, a way out to alleviate the grievance of the
complainant would have to be found and it would be by making resort
to Section 357 (3) Cri. P. C. The Hon'ble Apex Court was also in
agreement with the law laid down in the case of Hari Singh Vs.
Sukhbir Singh wherein it was held that the quantum of compensation
may be determined by taking into account the nature of crime, the
justness of the claim by the victim and the ability of accused to pay. It
was also laid down therein that the sentence of imprisonment can be
imposed in case of any default in payment of compensation ordered by
the Court under Section 357 (3) Cri. P. C.
17. Even in the case of R. Vijayan Vs. Baby & another – 2012
(2) Mh. L. J. 584, the Hon'ble Apex Court has held that when a
sentence of fine forms a part of the sentence of imprisonment, the
Court can direct a portion of the fine amount to be paid as
compensation for any loss or injury caused by the offence or for
defraying the expenses properly incurred by the prosecution. Such
compensation from out of the fine amount can be imposed by taking
resort to the provision of Section 357 (1) of the Code. However, when
the sentence imposed does not include fine or where the sentence
relates to only imprisonment, the Court would have the power to
direct the accused to pay, by way of compensation, such amount as
may be specified in the order to a person who has suffered loss or
injury as per the provision of SubSection (3) of Section 357 of the
Code. The Hon'ble Apex Court has also made it clear that the
compensation can be directed to be paid either under Section 357 (1)
or Section 357 (3) of the Code but not under both the Sections as
these two Sections do not coexist.
18. From the above discussion, it wold be clear that the Court
has power to impose compensation and the Hon'ble Apex Court has led
emphasis upon liberal use of the provision of Section 357 (3) of the
Code in order to suitably compensate the complainant who has
suffered loss on account of dishonour of the cheque. The only
conditions subject to which the powers under SubSection (3) of
Section 357 of the Code should be exercised are is that the
compensation should be just and that fine should not form part of the
sentence or the sentence imposed should only be of imprisonment.
19. Having considered the law governing the field of awarding
compensation together with sentence of imprisonment under Section
138 of the N. I. Act, now, it would be necessary to examine the
question as to what should be the sentence and quantum of
compensation, which could be termed as adequate, just and proper so
as to meet the ends of justice.
20. The accused, i.e. respondent No.2, is a businessman, who
had issued the cheque in question towards satisfaction of legally
enforceable liability and the liability was commercial in nature. The
object of Section 138 of the N. I. Act is to enhance the creditability of
the cheque and facilitate its acceptability as an instrument for
completion of economic transactions. Therefore, I am of the view that
the sentence to be imposed must be of such a nature as would achieve
the object of Section 138 of the N. I. Act and also achieve the purposes
of punishment for economic offences namely deterrence, exemplifying
that crime does not pay and restitution. Viewed in this way, I am of the
opinion that a simple imprisonment of six months would meet the ends
of justice. In addition, the quantum of compensation to be awarded
could be Rs.75,000/, having regard to the fact that the cheque was
dishonoured in March. 1988 and during the pendency of the
proceedings before the learned Magistrate and thereafter till date,
respondent No.2 has not paid the amount of the cheque.
21. Accordingly, the appeal is allowed and the impugned
judgment and order are hereby quashed and set aside.
The respondents are convicted of the offence punishable
under Section 138 of the Negotiable Instruments Act, 1881
and respondent No.2 Sureshkumar Sagarmal Nevtia is
sentenced to suffer Simple Imprisonment for six months.
Respondent No.2 is further directed to pay compensation
of Rs.75,000/ (rupees seventyfive thousand only) under
Section 357(3) of the Code of Criminal Procedure, 1973,
out of which an amount of Rs.70,000/ (rupees seventy
thousand only) shall be paid to the appellant and an
amount of Rs.5,000/ (rupees five thousand only) shall be
credited to the account of District Legal Services Authority,
Akola, within a period of three months from the date of the
order.
In case, there is default in payment of the amount of
compensation within the stipulated period, it is directed
that respondent No.2 shall undergo further Simple
Imprisonment for a period of three months.
The bail bonds of respondent No.2 are cancelled and he
be placed under arrest forthwith by the concerned police
station and be committed to Jail for undergoing the
sentence.
Action under Section 388 Cr. P. C. be taken.
JUDGE
Print Page
that the learned Magistrate has misdirected himself in reading the
evidence available on record so as to incorrectly find that the notice
(Exh.33) issued by the appellant was invalid. It is true that in this
notice the appellant has not mentioned the amount of the cheque
either in figures or in words. What the appellant has mentioned is the
number of the cheque as 656523, date of the cheque being
23/02/1998, name of the Bank on which it was drawn and name of
the Bank to which it was presented for encashment. Then, it is also
mentioned in the notice that the appellant was calling upon the
respondents to pay to the appellant within 15 days of receipt of the
notice the “amount of the cheque”. It is significant to note that in this
notice, except for the amount of the cheque, no other dues or money
have been claimed by the appellant. The notice clearly shows that
what was ultimately demanded by the appellant from the respondents
was nothing but the amount of the cheque. So, it would be important
for this Court to examine whether there was any doubt about the
amount of cheque No.656523 dated 23/02/1998 in the mind of the
respondents.
9. If one goes through the reply of the respondents vide Exh.
39, one would find that respondent No.2 had absolutely no doubt in
his mind about the amount of the cheque and it was of Rs.25,000/.
Even before dishonour of the cheque, the evidence shows, respondent
No.2 had admittedly sent a letter dated 07/3/1998 informing the
applicant that respondent No.2 had not received the payment of Rs.
25,000/, being the amount of the cheque. Thus, this evidence
establishes beyond reasonable doubt that there was absolutely no
confusion or doubt in the mind of respondent No.2 that the amount of
cheque No.656523 dated 23/02/1998 drawn on Jintur Urban CoOp.
Bank was of Rs.25,000/ only. I must say, at this stage, there is no
dispute about issuance of the cheque and it is nobody's case that there
were other cheques of the same date which were dishonoured. In fact,
there is also no doubt about the validity of the notice vide Exh.33 with
no challenge having been made to it on this count at any point. This
can be seen from the reply given by respondent No.2 to the notice vide
Exh.33. Even in the evidence of respondent No.2, no challenge to the
validity of the notice has been made on the ground that the notice
suffered from the vice of vagueness on account of non mentioning of
the amount of the cheque in a specific manner. All these facts would
together show that the parties had understood as to what was the
amount of the cheque and what was due from the drawer under the
cheque to its payee. As such, the learned Magistrate could not have
dismissed the complaint by holding, albeit wrongly, that the notice was
invalid.
10. While recording a wrong finding not based upon the
evidence, the learned Magistrate has misinterpreted the judgment of
the Hon'ble Apex Court rendered in the case of Suman Sethi (supra).
In this case the Hon'ble Apex Court has clearly held that it is well
settled principle of law that the notice has to be read as a whole and in
the notice, demand has to be made for “said amount” i.e. cheque
amount and if no such demand is made, it would have to be examined
if the notice is bad or not on this count by considering the language of
the notice. If, in the notice, a demand has been made not only for the
amount of the cheque but also for the interest and other charges, then
it would be necessary to bifurcate all these amounts by specifying as to
what is due under the cheque and what is due on other counts. But, if
no such bifurcation is made and an omnibus demand is made inclusive
the amount of the cheque as well as the amount due on account of
interest, damages and other charges, such notice would be invalid in
law. The learned Magistrate, confused himself in understanding the
law so laid down by the Hon'ble Apex Court and it appears that the
learned Magistrate was swayed away by some of the observations of
the Hon'ble Apex Court, which he reproduced in the impugned
judgment and order by picking them up half heartedly. Therefore, I
find it necessary to reproduce the relevant observations of the Hon'ble
Apex Court as appearing in paragraph8 of the said judgment in their
entirety and they read as under.:
“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 up
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
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.
11. The above referred observations make it clear that in every
case a notice can not be held to be bad only for failure to specify
therein the amount of the cheque and it would depend upon the
language of the notice to come to an appropriate conclusion in the
matter. I have already considered the evidence brought on record by
both the sides and found that this evidence sufficiently establishes the
fact that the notice was complete in all sense and specific demand was
made for payment of the “amount of the cheque” and that there being
no doubt or confusion or dispute about the amount of the cheque, the
notice conveyed what it ought to have and, therefore, valid in the eye
of law.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
CRIMINAL APPEAL NO. 225 OF 2001
Kamal s/o Babulal Sharma
.. Versus ..
Ramkumar Sagarmal (HUF)
CORAM : S. B. SHUKRE, J.
DATED : 25th SEPT., 2014.
Citation: 2016 ALLMR(CRI)2652
1. This appeal is directed against the judgment and order
dated 08/6/2001 passed in Summary Criminal Case No.14408 of 1998
by 9th Judicial Magistrate, First Class, Akola, thereby acquitting the
respondentsaccused of the offence punishable under Section 138 of
the Negotiable Instruments Act, 1988 (the N.I. Act, for short). The
criminal proceedings initiated under Section 138 of the N.I. Act against
the respondents related to a cheque bearing No.656523 dated
23/2/1998 for Rs.25,000/ It was issued by respondent No.1 being
the HUF of which respondent No.2 was the manager at the relevant
time. It was signed by respondent No.2 as the manager of respondent
No.1HUF. According to the appellant, the cheque was issued towards
the satisfaction of legally enfoceable liability. It was the case of the
appellant that the appellant had given an amount of Rs.25,000/ by
way of a hand loan and the repayment thereof was to be made by a
cheque. Therefore, a postdated cheque came to be issued by the
respondents in favour of the appellant. The cheque was drawn on The
Jintur Urban CoOperative Bank Ltd., Akola. When the cheque was
presented on 20/3/1998 to the Bank of the appellant, The Akola Janta
Comm. CoOp. Bank Ltd., Akola on 20/3/1998, it could not be
honoured and was returned on 21/3/1998 on the ground that
'payment stopped by the drawer'.
2. Upon return of the cheque by the Bank of the appellant, the
appellant issued notice within the stipulated period of time to the
respondents calling upon them to make payment of the cheque
amount. The respondents replied the notice. While the respondents
did not deny issuance of the cheque, they took a stand that first cheque
was issued by the respondents on the assurance given by the appellant
that amount of the cheque would be sent later on by the appellant. It
was submitted that thereafter the appellant never sent the amount of
the cheque and, therefore, they sent a letter to the appellant requesting
him to send the amount of the cheque, but in vain. According to the
respondents, the cheque came to be issued without incurring of any
liability by them and, therefore, there was no question of making
payment of the cheque amount.
3. The proceedings under Section 138 of the N.I. Act, upon
denial of the liability by the respondents, came to be initiated and the
respondents were prosecuted for an offence relating to dishonour of
the cheque. After considering the evidence on record and hearing the
arguments of both sides, the learned Magistrate found that the cheque
in question was issued towards discharge of legally enfoceable liability
by the respondents and that the respondents could not rebut the
presumption raised in law in this regard as per Section 139 of the N.I.
Act. Even then, the trial Court did not find the respondents as guilty of
the offence with which they were charged and the reason therefor was
that the notice issued by the appellant demanding payment of the
amount of the cheque was invalid. According to the learned
Magistrate, this notice did not specify the amount of the cheque in any
manner. Thus, the respondents were given acquittal by the judgment
and order dated 08/6/2001. It is the same judgment and order, which
are under challenge in the present appeal.
4. This appeal is on Board of final hearing for quite some time.
The roznama shows that even though the respondents were duly
served with notice and are also represented by their Advocate, nobody
has appeared on behalf of the respondents. The appeal is of the year
2001 and over ripe for final hearing. The requirement of Section 386
Cri. P. C. is that in an appeal filed under Section 377 or 378 of Code
of Criminal Procedure, the accused should be heard only if he appears
and if he does not appear in spite of being duly served, the appeal has
to be decided on merits, but subject to the condition that it should be
done after perusing the record. The law only expects the appellate
Court to dispose of the appeal on merits after perusal and scrutinising
of the record and the requirement of hearing of the appellant or the
accused comes into play only if they appear or any of them appears.
The law in this regard has been settled by the Hon'ble Apex Court in
the case of Bani Singh & others Vs. State of U. P. (1996) 4 SCC 720,
to which a useful reference may be made.
5. In these circumstances, I have heard Shri Panpalia, learned
Counsel for the appellant. I have carefully gone through the impugned
judgment and order and also perused the record of the case.
6. Shri Panpalia, submitted that in this case there were no
other cheques involved so as to create a doubt about the amount of the
cheque. He further submits, the evidence on record would show that
respondent No.2 has admitted the fact that he was aware of the
amount of the cheque and it was of Rs.25,000/. In the notice issued
by the appellant vide Exh.33 what was demanded was the amount of
the cheque after mentioning the cheque number and also the date of
the cheque and that in the reply given to the notice (Exh.39), the
respondent nowhere disputed the validity of the notice on the ground
that it is vague and does not specify the amount of the cheque, so
submits the learned Counsel. He further submits that the learned
Magistrate has misinterpreted the ratio of the case of Suman Sethi Vs.
Ajay K. Churiwal & another – AIR 2000 SC 828 and wrongly
concluded that the notice was invalid and, therefore, the complaint
was not maintainable.
7. Insofar as the aspect of the rebuttal of presumption under
Section 139 of the N.I. Act is concerned, there is absolutely no
evidence brought on record by the respondents to enable the Court to
uphold the contention that this presumption has been rebutted by the
respondents. A bald statement has been made in defence that the
cheque in question was issued by respondent No.2 on behalf of
respondent No.1 as it was promised by the appellant that amount of
the cheque would be sent by him to respondent No.2. No evidence nor
any material has been brought on record to probablise this defence.
Therefore, the finding recorded by the learned Magistrate that the
presumption under Section 139 has not been rebutted by the
respondents has to be upheld as legal and correct leaving no scope for
interference with it.
8. However, it is seen from the impugned judgment and order
that the learned Magistrate has misdirected himself in reading the
evidence available on record so as to incorrectly find that the notice
(Exh.33) issued by the appellant was invalid. It is true that in this
notice the appellant has not mentioned the amount of the cheque
either in figures or in words. What the appellant has mentioned is the
number of the cheque as 656523, date of the cheque being
23/02/1998, name of the Bank on which it was drawn and name of
the Bank to which it was presented for encashment. Then, it is also
mentioned in the notice that the appellant was calling upon the
respondents to pay to the appellant within 15 days of receipt of the
notice the “amount of the cheque”. It is significant to note that in this
notice, except for the amount of the cheque, no other dues or money
have been claimed by the appellant. The notice clearly shows that
what was ultimately demanded by the appellant from the respondents
was nothing but the amount of the cheque. So, it would be important
for this Court to examine whether there was any doubt about the
amount of cheque No.656523 dated 23/02/1998 in the mind of the
respondents.
9. If one goes through the reply of the respondents vide Exh.
39, one would find that respondent No.2 had absolutely no doubt in
his mind about the amount of the cheque and it was of Rs.25,000/.
Even before dishonour of the cheque, the evidence shows, respondent
No.2 had admittedly sent a letter dated 07/3/1998 informing the
applicant that respondent No.2 had not received the payment of Rs.
25,000/, being the amount of the cheque. Thus, this evidence
establishes beyond reasonable doubt that there was absolutely no
confusion or doubt in the mind of respondent No.2 that the amount of
cheque No.656523 dated 23/02/1998 drawn on Jintur Urban CoOp.
Bank was of Rs.25,000/ only. I must say, at this stage, there is no
dispute about issuance of the cheque and it is nobody's case that there
were other cheques of the same date which were dishonoured. In fact,
there is also no doubt about the validity of the notice vide Exh.33 with
no challenge having been made to it on this count at any point. This
can be seen from the reply given by respondent No.2 to the notice vide
Exh.33. Even in the evidence of respondent No.2, no challenge to the
validity of the notice has been made on the ground that the notice
suffered from the vice of vagueness on account of non mentioning of
the amount of the cheque in a specific manner. All these facts would
together show that the parties had understood as to what was the
amount of the cheque and what was due from the drawer under the
cheque to its payee. As such, the learned Magistrate could not have
dismissed the complaint by holding, albeit wrongly, that the notice was
invalid.
10. While recording a wrong finding not based upon the
evidence, the learned Magistrate has misinterpreted the judgment of
the Hon'ble Apex Court rendered in the case of Suman Sethi (supra).
In this case the Hon'ble Apex Court has clearly held that it is well
settled principle of law that the notice has to be read as a whole and in
the notice, demand has to be made for “said amount” i.e. cheque
amount and if no such demand is made, it would have to be examined
if the notice is bad or not on this count by considering the language of
the notice. If, in the notice, a demand has been made not only for the
amount of the cheque but also for the interest and other charges, then
it would be necessary to bifurcate all these amounts by specifying as to
what is due under the cheque and what is due on other counts. But, if
no such bifurcation is made and an omnibus demand is made inclusive
the amount of the cheque as well as the amount due on account of
interest, damages and other charges, such notice would be invalid in
law. The learned Magistrate, confused himself in understanding the
law so laid down by the Hon'ble Apex Court and it appears that the
learned Magistrate was swayed away by some of the observations of
the Hon'ble Apex Court, which he reproduced in the impugned
judgment and order by picking them up half heartedly. Therefore, I
find it necessary to reproduce the relevant observations of the Hon'ble
Apex Court as appearing in paragraph8 of the said judgment in their
entirety and they read as under.:
“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 up
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
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.
11. The above referred observations make it clear that in every
case a notice can not be held to be bad only for failure to specify
therein the amount of the cheque and it would depend upon the
language of the notice to come to an appropriate conclusion in the
matter. I have already considered the evidence brought on record by
both the sides and found that this evidence sufficiently establishes the
fact that the notice was complete in all sense and specific demand was
made for payment of the “amount of the cheque” and that there being
no doubt or confusion or dispute about the amount of the cheque, the
notice conveyed what it ought to have and, therefore, valid in the eye
of law.
12. In these circumstances, I find that the learned Magistrate
has committed a serious error of fact and law in recording a verdict of
acquittal of the respondents for the offence punishable under Section
138 of the N. I. Act and I find that the appellant has proved beyond
reasonable doubt his case against the respondents. As a sequel, the
verdict of acquittal is quashed and set aside and I find that respondents
are guilty of the offence punishable under Section 138 of the N. I. Act
and respondent No.2 being the manager of respondent No.1HUF,
would be liable to be receive the sentence.
13. At this stage, I have heard learned Counsel for the appellant
on the question of sentence. Respondent No.2 is not available as he has
not chosen to appear before the Court.
14. In the case of Kumar Exports Vs. Sharma Carpets 2009 (4)
Mh. L. J. 23, the Hon'ble Apex Court has held that once the appellate
Court , after hearing an appeal against acquittal, records conviction,
the powers enumerated in Section 386(a) of the Code of Criminal
Procedure, 1973 do not contemplate that appellate Court can remit the
matter to the trial Court for passing appropriate order of sentence.
The Hon'ble Supreme Court further observed that the judicial function
of imposing appropriate sentence must be performed only by the
appellate Court on reversing the order of the acquittal and not by any
other Court or otherwise, it is an abdication of its power in favour of
the trial Court. In view of this law, I have heard the learned Counsel
for the appellant on the point of the sentence.
15. Learned Counsel for the appellant submitted that at the
time when the cheque was dishonoured and liability under Section 138
of the N. I. Act arose, the maximum punishment prescribed for the
offence under Section 138 was of only one year and in this case, since
the cheque was issued towards discharge of commercial liability,
maximum punishment as prescribed by law needs to be imposed,
keeping in view the object of Chapter XVII of the N. I. Act, 1881
inserted by the Banking Public Financial Institutions and Negotiable
Instruments Laws (Amendment) Act, 1988. He also submits that
adequate compensation to the extent of Rs. 1 lac needs to be awarded
in this case.
16. In the case of Suganthi Suresh Kumar Vs. Jagdeeshan –
(2002) 2 SCC 420, the Hon'ble Apex Court after analysing various
judgments of the Supreme Court held that having regard to the object
of fastening of criminal liability for dishonour of cheque by inserting
ChapterXVII in the Negotiable Instruments Act, 1881, there was need
for making liberal use of the provision of awarding of compensation as
contained under Section 357(3) of Cri. P. C. The Hon'ble Apex Court
considered its own judgments rendered earlier in the case of
K. Bhaskaran Vs. Sankaran Vaidhyan Balan – (1999) 7 SCC 510 and
Harisingh Vs. Sukhbir Singh – (1988) 4 SCC 551. It referred to
Bhaskaran's case wherein it is observed that if a Judicial Magistrate of
the First Class was to order compensation to be paid to the
complainant from out of the fine realised, the complainant will be the
loser when the cheque amount exceeded the said limit of the Judicial
Magistrate to impose fine. It is further noted therein that in such a
case, a complainant would get only the maximum amount of rupees
five thousand and therefore, a way out to alleviate the grievance of the
complainant would have to be found and it would be by making resort
to Section 357 (3) Cri. P. C. The Hon'ble Apex Court was also in
agreement with the law laid down in the case of Hari Singh Vs.
Sukhbir Singh wherein it was held that the quantum of compensation
may be determined by taking into account the nature of crime, the
justness of the claim by the victim and the ability of accused to pay. It
was also laid down therein that the sentence of imprisonment can be
imposed in case of any default in payment of compensation ordered by
the Court under Section 357 (3) Cri. P. C.
17. Even in the case of R. Vijayan Vs. Baby & another – 2012
(2) Mh. L. J. 584, the Hon'ble Apex Court has held that when a
sentence of fine forms a part of the sentence of imprisonment, the
Court can direct a portion of the fine amount to be paid as
compensation for any loss or injury caused by the offence or for
defraying the expenses properly incurred by the prosecution. Such
compensation from out of the fine amount can be imposed by taking
resort to the provision of Section 357 (1) of the Code. However, when
the sentence imposed does not include fine or where the sentence
relates to only imprisonment, the Court would have the power to
direct the accused to pay, by way of compensation, such amount as
may be specified in the order to a person who has suffered loss or
injury as per the provision of SubSection (3) of Section 357 of the
Code. The Hon'ble Apex Court has also made it clear that the
compensation can be directed to be paid either under Section 357 (1)
or Section 357 (3) of the Code but not under both the Sections as
these two Sections do not coexist.
18. From the above discussion, it wold be clear that the Court
has power to impose compensation and the Hon'ble Apex Court has led
emphasis upon liberal use of the provision of Section 357 (3) of the
Code in order to suitably compensate the complainant who has
suffered loss on account of dishonour of the cheque. The only
conditions subject to which the powers under SubSection (3) of
Section 357 of the Code should be exercised are is that the
compensation should be just and that fine should not form part of the
sentence or the sentence imposed should only be of imprisonment.
19. Having considered the law governing the field of awarding
compensation together with sentence of imprisonment under Section
138 of the N. I. Act, now, it would be necessary to examine the
question as to what should be the sentence and quantum of
compensation, which could be termed as adequate, just and proper so
as to meet the ends of justice.
20. The accused, i.e. respondent No.2, is a businessman, who
had issued the cheque in question towards satisfaction of legally
enforceable liability and the liability was commercial in nature. The
object of Section 138 of the N. I. Act is to enhance the creditability of
the cheque and facilitate its acceptability as an instrument for
completion of economic transactions. Therefore, I am of the view that
the sentence to be imposed must be of such a nature as would achieve
the object of Section 138 of the N. I. Act and also achieve the purposes
of punishment for economic offences namely deterrence, exemplifying
that crime does not pay and restitution. Viewed in this way, I am of the
opinion that a simple imprisonment of six months would meet the ends
of justice. In addition, the quantum of compensation to be awarded
could be Rs.75,000/, having regard to the fact that the cheque was
dishonoured in March. 1988 and during the pendency of the
proceedings before the learned Magistrate and thereafter till date,
respondent No.2 has not paid the amount of the cheque.
21. Accordingly, the appeal is allowed and the impugned
judgment and order are hereby quashed and set aside.
The respondents are convicted of the offence punishable
under Section 138 of the Negotiable Instruments Act, 1881
and respondent No.2 Sureshkumar Sagarmal Nevtia is
sentenced to suffer Simple Imprisonment for six months.
Respondent No.2 is further directed to pay compensation
of Rs.75,000/ (rupees seventyfive thousand only) under
Section 357(3) of the Code of Criminal Procedure, 1973,
out of which an amount of Rs.70,000/ (rupees seventy
thousand only) shall be paid to the appellant and an
amount of Rs.5,000/ (rupees five thousand only) shall be
credited to the account of District Legal Services Authority,
Akola, within a period of three months from the date of the
order.
In case, there is default in payment of the amount of
compensation within the stipulated period, it is directed
that respondent No.2 shall undergo further Simple
Imprisonment for a period of three months.
The bail bonds of respondent No.2 are cancelled and he
be placed under arrest forthwith by the concerned police
station and be committed to Jail for undergoing the
sentence.
Action under Section 388 Cr. P. C. be taken.
JUDGE
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