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of <h1>Supreme Court reinstates conviction under Section 138 of Negotiable Instruments Act</h1> The Supreme Court overturned the High Court's decision to set aside the conviction of the first respondent under Section 138 of the Negotiable Instruments ... Conviction u/s 138 of the Negotiable Instruments Act - dishonoured cheques - undelivered notice - It was contended that:- Notice demanding payment of the amount arising from the two dishonoured cheques in question was on 04-05-1991, whereas the intimation regarding dishonour of the said cheques was given by the appellant’s bank on 08-04-1991. Therefore, the notice was beyond 15 days. - Held that:- generally there is no bar under the N.I. Act to send a reminder notice to the drawer of the cheque and usually such notice cannot be construed as an admission of non-service of the first notice by the appellant as has happened in this case. First notice sent by appellant on 12-04-1991 was effective and notice was deemed to have been served on the first respondent. Further, it is clear that the second notice has no relevance at all in this case at hand. Second notice could be construed as a reminder of respondent’s obligation to discharge his liability. As the complaint, was filed within the stipulated time contemplated under Clause (b) of Section 142 of the N.I. Act, therefore Section 138 r/w 142 of N.I. Act is attracted. In the view of the matter, we set aside the impugned judgment of the High Court. However, during the course of hearing, learned counsel for first respondent, as agreed by appellant herein, submitted that first respondent was willing to pay ₹ 2,00,000/- (Rupees two lakhs only) in lieu of suffering simple imprisonment of three months as imposed by the Trial Court, as confirmed by the first Appellate Court, and endorsed by this Court. In view of the undertaking given by the learned counsel, we direct the first respondent to deposit the said amount of ₹ 2,00,000/- (Rupees two lakhs only) before the Judicial First Class Magistrate-II at Alappuzha on or before 30.04.2017. Out of the said amount of ₹ 2,00,000/- (two lakhs only) so deposited, ₹ 1,30,000/- (one lakh thirty thousand) shall be paid to the appellant as compensation.In the event, first respondent fails to deposit the said amount of ₹ 2,00,000/- within the stipulated period as indicated above, the conviction and sentence of three months awarded by the Ld. Trial Court and affirmed by the Appellate Court shall stand restored and bail granted to the first respondent shall stand cancelled. Issues:Appeal against High Court's judgment allowing criminal revision under Section 138 of the Negotiable Instruments Act, 1881.Analysis:1. The appeal stemmed from the High Court's decision setting aside the conviction of the first respondent under Section 138 of the N.I. Act due to procedural non-compliance.2. The appellant loaned money to the first respondent who issued three cheques, two from State Bank of India and one from LIC, all of which were dishonored.3. The appellant sent legal notices after the cheques bounced, leading to a complaint under Section 138 filed in 1991.4. The Trial Court convicted the first respondent, a decision upheld by the Appellate Court but later reversed by the High Court.5. The High Court's main ground was that the notice demanding payment was issued beyond the 15-day limitation period prescribed by Section 138.6. The primary issue was whether the High Court was correct in rejecting the case based on the timing of the second notice.7. Section 138 of the N.I. Act mandates serving a notice within 15 days of receiving information about the dishonored cheque, providing the drawer an opportunity to make payment.8. The Act allows for sending a reminder notice, which does not invalidate the service of the first notice.9. The Supreme Court held that the first notice was effective, and the second notice was irrelevant, as the complaint was filed within the stipulated time.10. The Court directed the first respondent to deposit a specified amount as compensation, failing which the original conviction and sentence would be reinstated.This comprehensive analysis of the judgment highlights the legal intricacies involved in the case, focusing on the interpretation of Section 138 of the N.I. Act and the procedural requirements for establishing an offense under the Act.
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