Suman Sethi vs Ajay K, Churiwal on 2 February, 2000

Suman Sethi vs Ajay K, Churiwal on 2 February, 2000

Equivalent citations: AIR 2000 SUPREME COURT 828, 2000 (2) SCC 380, 2000
AIR SCW 383, (2000) 2 HINDULR 170, (2000) 1 JT 493 (SC), 2000
CRILR(SC&MP) 180, (2009) 1 NIJ 135, (2000) 1 CAL HN 795, (2000) 2 CAL LJ
36, 2000 (1) JT 493, 2000 (1) SCALE 385, 2000 ALL MR(CRI) 645, 2000
CALCRILR 257, 2000 SCC(CRI) 414, 2000 CORLA(BL SUPP) 56 SC, 2000 (2)
COM LJ 40 SC, 2000 (2) SRJ 410, 2000 (3) LRI 820, 2000 CRIAPPR(SC) 180,
2000 (2) ALL CJ 934, 2000 CRILR(SC MAH GUJ) 180, (2000) 1 PUN LR 43,
(2001) 1 ALLCRILR 311, (2000) 245 ITR 810, (2001) 115 TAXMAN 193, (2000) 2
CAL LJ 275, (2000) CAL WN 1223, (2000) 164 CURTAXREP 554, (2000) 2 DMC
216, (2000) 2 HINDULR 631, (2000) 2 ALLCRILR 154, 2000
CHANDLR(CIV&CRI) 339, (1999) CRILT 421, (2000) 2 RECCRIR 80, (2000) 2
CURCRIR 581, (2000) SC CR R 533, (2000) 1 EASTCRIC 372, (2000) 1
CIVILCOURTC 386, (2000) 2 GUJ LR 1071, (2000) 1 KER LT 701, (2000) MAD
LJ(CRI) 564, (2000) 2 MAH LJ 301, (2000) 1 MPLJ 610, (2000) 1 ORISSA LR
315, (2000) 18 OCR 419, (2000) 2 PAT LJR 40, (2000) 2 RAJ LW 260, (2000) 1
RECCRIR 780, (2000) 1 SCJ 688, (2001) 2 BANKCAS 144, (2000) 1 SUPREME
405, (2000) 27 ALLCRIR 466, (2000) 1 SCALE 385, (2000) 38 ALL LR 712,
(2000) BANKJ 298, (2001) 1 CALLT 1, (2000) 1 CHANDCRIC 114, (2000) 1
ALLCRILR 546, (2000) 2 CIVLJ 737, (2000) 100 COMCAS 444, (2000) 1 CRIMES
207, (2000) 1 CURLJ(CCR) 225, (2000) 2 BANKCLR 337, 2000 (1) ANDHLT(CRI)
181 SC, (2000) 5 BOM CR 271

Bench: G.T. Nanavati, S.N. Phukan

CASE NO.:
Appeal (crl.) 113 of 2000

PETITIONER:
SUMAN SETHI

RESPONDENT:
AJAY K, CHURIWAL

DATE OF JUDGMENT: 02/02/2000

BENCH:
G.T. NANAVATI & S.N. PHUKAN

JUDGMENT:

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 Suman Sethi vs Ajay K, Churiwal on 2 February, 2000
JUDGMENT 2000 (1) SCR 601 The Judgment of the Court was delivered by PHUKAN, J. Leave
granted.

This appeal is directed against the judgment and order dated 3,10.1997 passed by the Calcutta High
Court in Criminal Revision No. 1611/97. By the impugned judgment, the High Court set aside the
order of the Metropolitan Magistrate - 16th, Calcutta passed b case No. C/1661/96.

Briefly stated the facts are as follows :

The appellant issued a cheque for Rs. 20,00.000 (Rupees Twenty Lacs) in favour of
respondent No, 1 The cheque was presented to the banker which was returned on 2nd
August, 1996 with the remarks "Insufficient Fund". Thereafter within 15 days of
return of the cheque, respondent No. 1 gave a notice of demand as required under
proviso (b) to Section 138 of the Negotiable Instruments Act, 1881, as amended, (for
short the Act). As the appellant failed to meet the demand, a complaint was filed
before the Metropolitan Magistrate. On perusal of the above notice, the Magistrate
was of the view that the (demand made in the notice being higher than the amount of
the cheque), notice was bad in view of an earlier decision of the High Court.
Respondent No. 1 approached the High Court by filing the revision petition which
was allowed by the impugned order and the order of the Metropolitan Magistrate was
set aside. The High Court was of the view that the decision of the High Court on
which reliance was placed by Magistrate was distinguishable. The High Court held
that as in notice, respondent No. 1 clearly demanded the cheque amount, the notice
was a valid one and accordingly set aside the order of the Metropolitan Magistrate.

We have heard Dr. Rajeev Dhawan, learned senior counsel for the appellant, Mr.
Sanjiv Sen, learned counsel for respondent No. 1 and Mr. Dilip Sinha, learned counsel
for respondent No. 2 - the State of West Bengal.

The only question for consideration by us is whether the notice in question issued
under proviso (b) to Section 138 of the Act was valid or not. We extract below
Sections 138 and 139 of the Act :

"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 one year, or with fine which may extend to twice the

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 Suman Sethi vs Ajay K, Churiwal on 2 February, 2000
amount of the cheque, or both :

Provided that nothing contained in this section shall apply unless -

(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 fifteen 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".

(Emphasis supplied) "139 - Presumption in favour of holder. - It shall be presumed, unless the
contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in
Section 138 for the discharge, in whole or in part, of any debt or other liability."

‘We have to ascertain the meaning of the words "said amount of money"

occurring in clauses (b) and (c) to the proviso to Section 138. Reading the Section as a
whole we have no hesitation to hold that the above expression refers to the words
"payment of any amount of money" occurring in main Section 138 i.e. the cheque
amount. So in notice, under clause (b) to the proviso, demand has to be made for the
cheque amount. Dr. Dhawan, learned senior counsel has urged that Section 138 being
a penal provision has to be construed strictly. We may refer the decision of this Court
in M. Narayanan Nambiar v. State of Kerala, AIR (1963) SC 1116 = [1963] 2 Supp.
SCR 724. This Court considered the rule of construction of a penal provision and
quoted with approval the following passage of the decision of the Judicial Committee
in Dyke v, Elliot, (1872) LR 4 AC 184. The passage runs as follows :

"No doubt all penal Statutes are to be construed strictly, that is to say, the Court must
see that the thing charged as an offence is within the plain meaning of the words
used, and must not strain the words on any notion that there has been a slip, that
there has been a casus omissus, that the thing is so clearly within the mischief that it
must have been intended to be included if thought of. On the other hand, the person
charged has a right to say that he thing charged although within the words, is not
within the spirit of the enactment. But where the thing is brought within the words
and within the spirit, there a penal enactment is to be construed, like any other
instrument, according to the fair commonsense meaning of the language used, and
the Court is not to find or make any doubt or ambiguity in the language of a penal
statute, where such doubt or ambiguity would clearly not be found or made in the
same language in any other instrument."”

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 Suman Sethi vs Ajay K, Churiwal on 2 February, 2000
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 than what
is due under the cheque.

It is well settled principle of law that the notice has to he 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. Ifin 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 he 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.

In Section 138 legislature clearly stated that for the dishonored cheque the drawer shall be liable for
conviction if the demand is not met within 15 days of the receipt of notice but this is without
prejudice to any other provision of the Act. If the cheque amount is paid within the above period or
before the complaint is filed the legal liability under Section 138 will cease and for recovery of other
demands as compensation, costs, interest etc., a civil proceeding will lie. Therefore, if in a notice any
other sum is indicated in addition to the "said amount" the notice cannot be faulted, as stated above.

Drawing our attention to Section 139 of the Act, Mr. Dhawan has urged that if in the notice in
addition to "said amount" other demands are made the presumption as contemplated under Section
138 would operate. We are unable to accept the submission of the learned senior counsel as Section
139 has to be read with Section 138 and reading both the Sections together it would appear that
presumption would arise only in respect of the "said amount”.

We extract below the relevant portion of notice :

"I, therefore, by means of this notice call upon you to pay the amount of Rs.
20,00,000 along with the incidental charges of Rs. 1,500 spent on the cheque on its
presentation and also Rs. 340 as notice charges within a period of 15 days from the
date of receipt thereof, failing which my clients shall take necessary legal steps
against you holding you liable for all costs and consequences thereof, which please
note."

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 Suman Sethi vs Ajay K, Churiwal on 2 February, 2000
In the notice in question the "said amount" i.e. the cheque amount has been dearly stated.
Respondent No. 1 had claimed in additional to the cheque amount, incidental charges and notice
charge. These two amounts are severable. In the notice it was clearly stated that on failure to comply
with the demand necessary legal steps will be taken up. If respondent No. 1 had paid the cheque
amount he would have been absolved from the criminal liability under Section 138. Regarding other
claims, a civil suit would be necessary We, therefore, do not Find any merit in the present appeal
and accordingly it is dismissed.

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