1999 (10) TMI 718

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....al proceedings namely case Nos. 172 and 1156 of 1995 pending before the Judicial Magistrate, First Class, Gwalior. Respondent No. 1, a partnership firm, took a loan of over a crore of rupees from the appellant-bank and towards part re-payment of the above loan, issued three cheques dated 29.3.94, for Rs. 1 lakh, Rs. 2 lakhs and Rs. 39,50,000, All three cheques were presented to the bank for collection but received back by the appellant unpaid on 25.4.94 and 19.6.94 with the remarks "funds insufficient". The appellant bank sent two registered notices dated 2,5.94 and 27.6.94 through the advocate and there was no dispute that the notices were received. All the cheques were again presented to the bank but returned with the same remarks namely....

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.... that 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 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, such person shall be deemed to have committed an offence under the above Section. According to the proviso to the said Section unless the three clauses mentioned therein are fulfilled the provisions of the Section shall not apply. In these appeals we are concerned with Clause (b) which is quoted below : "(b) the payee or the holder in due course of the cheque, as the case may be, makes a dem....

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....cant/petitioner should arrange the payment on re-presentation of the cheque". The High Court over looked the last line of notice as indicated above and, therefore, erred in holding that there was no demand of payment. A cheque can be presented any number of times to the bank within the period of its validity. In view of the above, appellant-bank had a legal right to re-present the cheques to the bank as indicated in the notices and, therefore, respondents could have arranged payment either through bank or directly to the appellant bank. By not doing so the provision of Section 138 is clearly attracted. In the notices it was stated that on re-presentation of the cheques if returned unpaid, the appellant-bank would report the matter to the ....