AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 558
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....of the Negotiable Instruments Act, 1881 (hereinafter referred to as the "NI Act") titled as M/s Vishwakarma Metal Box & another V M/s Aryan biological Corporation & another bearing CC no. 17879/2016 on the allegations that the respondent no. 2/Sanjay Gaur is carrying on wholesale business of metal boxes under the name and style of M/s Vishwakarma Metal Box, the respondent no. 1 being its sole proprietor. The accused no.2, namely, Anuj Singhal who is carrying on business in the name of M/s Aryan Biological Corporation i.e., the accused no.1 (hereinafter referred to as "the petitioners") approached the respondents for purchase of Metal Boxes. 2.1 The respondents sold metal boxes time to time to the petitioners and raised bills/invoices towards such sales subject to terms and conditions. The petitioners purchased goods from respondents during the period from 04.09.2011-18.10.2012 against which the demands were raised through 45 invoices with total value of Rs.65,57,525.23/-. The petitioners duly received and accepted the invoices. The sales were made against C-forms and the petitioner no.2 has represented and assured to the respondents to issue C-forms and accordingly VAT @ 2 % on th....
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.... dishonored/bounced are amounting to Rs.3,50,000/- whereas in legal notice dated 14.03.2013 the petitioners were asked to pay Rs.17,92,572.23/- and as such, legal notice dated 14.03.2013 is not in legal conformity as per mandate of section 138 of NI Act. The counsel for the petitioner relied upon M/s Rahul Builders V Arihant Fertilizers & Chemicals, (2008) 2 SCC cases 321. 5. The section 138 of the NI Act reads as under:- 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 provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine....
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....fficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank; (iv) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; (v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course. 8. The counsel for the respondents argued that the petition has been filed to delay the proceedings before the Trial Court. The document dated 21.02.2013 as referred in the present petition was never filed before the trial court. The present petition is filed after a delay of 18 months and the petitioners did not explain the delay. The present petition is filed after the trial court has closed the opportunity to cross examine the respondent no. 2. The statutory demand notice dated 14.03.2013 contains all necessary ingredients to attract section 138 of NI Act which does not provide any format for the notice to be issued. The notice under sectio....
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....respondents vide return memo dated 08.03.2013. Thereafter, the respondents served a legal notice dated 14.03.2013 to the petitioners and as per the respondents, the petitioners despite service of notice dated 14.03.2013 did not make the payment of cheque amount i.e. Rs.3,50,000/-. The relevant portion of the notice dated 14.03.2013 relating to the claims of the respondents reads as under:- We, therefore, on behalf of our client above named call upon you to forthwith and in any event not later than 15 (fifteen) days from the receipt hereof; i. pay our client the outstanding amount of Rs.17,92,572.23p. (Rupees seventeen lacs ninety two thousand five hundred seventy two and paise twenty three only), together with interest thereon at the rate of 24% per annum for the entire period of delay and default computed with effect the date of each of the Invoices; ii. issue all the C-Forms against the supplies made by our client, inter alia, as detailed herein above OR pay the differential amount of VAT for the entire value of the Sale Price, together with interest thereon at the rate of 24% per annum for the entire period of delay and default computed with effect the date of each of the ....
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....ng what was due under the dishonoured cheque, the notice might well fail to meet the legal requirement and may be regarded as bad. 9. This Court had occasion to deal with Section 138 of the Act in Central Bank of India v. Saxons Farms 3 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 the 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 the complaint is filed." [Underlining is ours for emphasis] As therein, some other sums were indicated in addition to the amount of cheque, it was, therefore, not held to be a case where the dispute might be existing in respect of the entire outstanding amount. 13. The Supreme Court in case of M/s Rahul Builders V Arihant Fertilizers & Chemicals (2008) 2 SCC cases 321 as relied upon by the petitioners considered the issue that failure on the part of complainant to serve proper notice, strictly in terms of proviso appended to section 138 of NI Act wou....
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....e Parliament while enacting the said provision consciously imposed certain conditions. One of the conditions was service of a notice making demand of the payment of the amount of cheque as is evident from the use of the phraseology "payment of the said amount of money". Such a notice has to be issued within a period of 30 days from the date of receipt of information from the bank in regard to the return of the cheque as unpaid. The statute envisages application of the penal provisions. A penal provision should be construed strictly; the condition precedent wherefor is service of notice. It is one thing to say that the demand may not only represent the unpaid amount under cheque but also other incidental expenses like costs and interests, but the same would not mean that the notice would be vague and capable of two interpretations. An omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law. Respondent No. 1 was not called upon to pay the amount which was payable under the cheque issued by it. The amount which it was called upon to pay was the outstanding amounts of bills, i.e., Rs. 8,72,409/-. The notice ....