Case Note & Summary
The case involves a criminal revision application filed by the accused, Gurudas Budho Velip, challenging his conviction under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of two cheques. The complainant, Premanand Krishna Anvekar, presented two cheques dated 17-11-1998 for Rs.17,000 and 10-12-1998 for Rs.4,000 for collection on three occasions: 20-2-1999, 20-3-1999, and 3-5-1999. Each time, the cheques were returned dishonoured due to insufficient funds. The complainant sent a notice dated 5-5-1999, which the accused received on 28-5-1999 and replied on 3-6-1999. The accused contended that the notice was not sent within 15 days of receipt of information from the bank regarding dishonour, as required by Section 138(b) of the Act. The trial court and the appellate court had not considered this issue. The High Court noted that the last presentation of the cheques was on 3-5-1999, and the notice was dated 5-5-1999, but there was no evidence of when it was posted. The complainant failed to produce the A.D. card, and an adverse inference was drawn. The court held that the complainant did not prove compliance with the 15-day notice requirement, and therefore, the conviction could not be sustained. The court relied on precedents including Goa Antibiotics & Pharmaceuticals Ltd. v. R. K. Chawda & another (2009(2) GLR 63), N. G. Narayanaswamy v. M/s. Vijayanand Roadlines Ltd. (2001 Cri.L.J. 211), and Munoth Investments Ltd. v. Puttukola Properties Ltd. and another ((2001) 6 SCC 582). The revision application was allowed, and the conviction and sentence were set aside.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138(b) - Notice Period - The complainant must send a demand notice within 15 days of receiving information from the bank that the cheque was dishonoured. Failure to do so vitiates the complaint. The court held that the notice dated 5-5-1999 was not proved to have been sent within 15 days from 3-5-1999, and adverse inference was drawn for non-production of A.D. card. (Paras 2-6)
B) Negotiable Instruments Act - Strict Liability - Section 138 - Penal Provision - Being a penal provision, Section 138 must be construed strictly. Non-compliance of any clause, including the notice period under clause (b), results in no offence being made out. (Paras 6)
C) Evidence - Adverse Inference - Non-production of A.D. Card - When the complainant fails to produce the A.D. card despite opportunity, an adverse inference is drawn against the complainant that the notice was not sent within the prescribed period. (Para 5)
Issue of Consideration
Whether the conviction of the accused under Section 138 of the Negotiable Instruments Act, 1881 is sustainable when the statutory demand notice was not sent within 15 days of receipt of information from the bank regarding dishonour of cheque.
Final Decision
The Criminal Revision Application is allowed. The conviction and sentence imposed on the applicant-accused under Section 138 of the Negotiable Instruments Act, 1881 are set aside. The applicant is acquitted.
Law Points
- Strict construction of penal provisions
- Mandatory 15-day notice period under Section 138(b) NI Act
- Adverse inference for non-production of A.D. card
- Burden on complainant to prove notice within limitation
Case Details
2010 LawText (BOM) (08) 112
Criminal Revision Application No. 6 of 2010
Shri G. Shirodkar for the Applicant; Respondent absent.
Shri Premanand Krishna Anvekar
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Nature of Litigation
Criminal revision application against conviction under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheques.
Remedy Sought
The applicant-accused sought setting aside of conviction and sentence on the ground of non-compliance of Section 138(b) of the Negotiable Instruments Act, 1881.
Filing Reason
The accused contended that the complainant failed to send the statutory demand notice within 15 days of receipt of information from the bank regarding dishonour of the cheques.
Previous Decisions
The trial court convicted the accused under Section 138 of the Negotiable Instruments Act, 1881. The appellate court (Additional Sessions Judge) dismissed the appeal, considering limitation under Section 142 read with Section 138 but not under Section 138(b).
Issues
Whether the statutory demand notice under Section 138(b) of the Negotiable Instruments Act, 1881 was sent within 15 days of receipt of information from the bank regarding dishonour of the cheque?
Whether the conviction can be sustained when the complainant fails to prove compliance with the 15-day notice requirement?
Submissions/Arguments
The applicant-accused argued that the complainant did not send the demand notice within 15 days from the date of receipt of information from the bank regarding the return of the cheque unpaid, as required by Section 138(b) of the Negotiable Instruments Act, 1881.
The respondent-complainant remained absent despite service.
Ratio Decidendi
Section 138 of the Negotiable Instruments Act, 1881 is a penal provision and must be construed strictly. Compliance with clause (b) of Section 138, which requires the payee to send a demand notice within 15 days of receipt of information from the bank regarding dishonour of the cheque, is mandatory. Failure to prove such compliance renders the complaint not maintainable and the conviction unsustainable. The burden is on the complainant to prove that the notice was sent within the prescribed period, and adverse inference can be drawn for non-production of the A.D. card.
Judgment Excerpts
The contention is that the applicant-accused could not have been convicted, for non compliance of Clause (b) of Section 138 of the Negotiable Instruments Act, 1881.
Obviously, the statutory demand notice had to be sent within 15 days, in terms of Section 138(b) of the Act, from the date of the receipt of information by the Complainant from the Bank regarding the return of the cheque unpaid, which obviously the Complainant did not.
Adverse inference has got to be drawn against the Complainant for non production of the said A.D. Card.
Section 138 of the Act incorporates the principle of strict liability and being a penal provision it has got to be construed strictly.
Procedural History
The complainant filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 against the accused. The trial court convicted the accused. The accused appealed to the Additional Sessions Judge, who dismissed the appeal. The accused then filed the present criminal revision application before the High Court of Bombay at Goa.
Acts & Sections
- Negotiable Instruments Act, 1881: 138, 138(b), 138(c), 142
