Court finds elements met for action under Section 141 of Negotiable Instruments Act. Valid demand notice specified amounts. Accused's payments discharged liability.

The court held that the elements to proceed against Accused No.2 under Section 141 of the Negotiable Instruments Act were established. The demand notice was deemed valid as it clearly specified the amounts covered by the dishonored cheques. The court found that the liability under the dishonored cheques was discharged by the accused's payments, closing the proceedings upon payment of interest and costs. The accused were directed to deposit interest and costs, with the option to close the complaints if done within three weeks, or face further legal action.

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Issues Involved:
1. Invocation of Section 141 of the Negotiable Instruments Act, 1881.
2. Validity of the demand notice.
3. Discharge of liability under the dishonored cheques.

Detailed Analysis:

1. Invocation of Section 141 of the Negotiable Instruments Act, 1881:
The petitioners argued that the issue of process against Accused No.2 under Section 141 of the N.I. Act was legally infirm as Accused No.2 was neither the drawer of the dishonored cheques nor the signatory to the letter of settlement. However, the court noted that Accused No.2 was the Chairman of Accused No.1 society and there were adequate averments in the complaint indicating that Accused No.2 was in charge of and responsible for the affairs of the society. The court held that the necessary elements to proceed against Accused No.2 were made out, referencing the Supreme Court judgment in SMS Pharma Ltd V Nita Bhalla.

2. Validity of the Demand Notice:
The petitioners contended that the demand notice was invalid as it demanded an amount greater than the sum covered by the dishonored cheques. The court found that the demand notices contained a clear and categorical demand for the amounts covered by the dishonored cheques, which was severable from the additional amounts claimed. The court cited the Supreme Court's decision in Sunil Sethi Vs. Ajay K. Churiwal, which clarified that a notice demanding the cheque amount along with additional claims does not invalidate the notice if the cheque amount is clearly specified.

3. Discharge of Liability under the Dishonored Cheques:
The petitioners argued that the entire amount covered by the dishonored cheques had been paid by 17th February 2016, and thus, there was no subsisting liability. The court examined the payments made against the cheques and found that the amount covered by the second cheque was paid within the statutory grace period, while the amount covered by the third cheque was paid within five months of the expiry of the statutory period. The court referenced the Supreme Court's judgment in Meters and Instruments Private Limited Vs. Kanchan Mehta, which held that the proceedings under Section 138 of the N.I. Act could be closed if the cheque amount, along with interest and costs, was paid.

The court noted that the payments made by the accused could be attributed towards the discharge of the entire liability under the letter of settlement, but emphasized that the focus should be on whether the amount covered by the cheques was paid or offered to be paid along with interest and costs. The court concluded that since the amount covered by the dishonored cheques was paid, it would be justified in invoking the power under Section 143 read with Section 258 of the Code of Criminal Procedure to close the proceedings upon payment of interest and costs.

Order:
1. The petitioners-accused were directed to deposit the amount of interest and costs of litigation within three weeks from the date of the order in the Court of the learned Metropolitan Magistrate.
2. If the amount was deposited within the said period, both complaints (CC No.8222/SS/2015 and CC No.8223/SS/2015) would stand disposed of as closed under Section 143 of the N.I. Act, 1881 read with Section 258 of the Code of Criminal Procedure, and the accused would be discharged.
3. In the event of default, the complaints would proceed in accordance with law.
4. Rule made absolute in the aforesaid terms with no separate costs of these petitions.

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