LexMIS. RAHUL BUILDERS versus M/S. ARIHANT FERTILIZERS AND CHEMICAL AND ANR.
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MIS. RAHUL BUILDERS
A
v.
MIS. ARIHANT FERTILIZERS AND CHEMICAL AND ANR.
NOVEMBER 02, 2007
[S.B. SINHA AND HARJIT SINGH BEDI, JJ.]
B
1 •
Negotiable Instruments Act, 1881:
s.138, proviso (b)-Dishonour of cheque-Complaint petition- c
Maintainability of, when no specific demand made in notice for
payment ofmnount covered by cheque-Held: Not maintainable since
service ofnotice not in conformity with proviso (b) to s.138-Also the
section does not speak of 15 days' notice-In absence of such
stipulation, it cannot be held to be so contemplated--Notice-~ D
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lnter71retation of sratutes.
_,.,
lnte17Jretation of statutes:
Proviso-Applicability of-Held: When proviso applies, main
section would not.
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Appellant and Respondent No.1 entered into a contract.
Appellant submitted bills for execution of contractual work for R$.
26.46 lacs. RespondentNo.1 paid Rs.17.74 lacs. Balance of Rs. 8.72
lacs was outstanding. Respondent No.1 issued a cheque for Rs. 1
lac in favour of appellant which on presentation was dishonoured on F
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the ground that Respondent No.1 had closed its account with the
Bank.
Appellant sent letter dated 31.10.2000 to Respondent No.1
requesting to make payment of pending bills within 10 days. G
Respondent No.1 did not make payment. Appellant filed complai11t
petition on 11.12.2000. The High Court quashed the proceedings
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holding that 15 days' notice having not been served upon
Respondent No. 1, the same was not valid in law and that the notice
was vague and did not serve the statutory requirements of Provisos
951
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_J
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952
SUPREME COURT REPORTS
(2007] 11 S.C.R.
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A (b) and (c) of s.138 of the Negotiable Instruments Act, 1881. Hence
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the present appeal.
Dismissing the appeal, the Court
HELD: 1. S.138 of Negotiable Instruments Act, 1881 does not
B speak of 15 days notice. It contemplates service of notice and
payment of amount of cheque within 15 days from the date of
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receipt. When the statute prescribes for service of notice specifying
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a particular period, it should be expressly stated. In absence of any
such stipulation, it is difficult to hold that 15 days' notice was thereby
c contemplated. The High Court, therefore, was not correct in arriving
at the aforementioned finding. [Para 8] [956-C, D]
2. In the notice dated 31.10.2000 issued by the appellant to
Respondent No.1, information was only given that the cheque when
D presented was returned "unpassed" by the bank authorities on the
plea that the account had been closed. By the operative portion of
the said notice, the respondent was called upon to remit the payment
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r:..
of his pending bills, otherwise suitable action shall be taken.
[Para 9] [956-E, F]
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Suman Sethi v. Ajay K. Churiwal and Anr., [2000] 2 SCC 380
and KR. Indira v. Dr. G. Adinarayana, [2003] 8 SCC 300, referred
to.
3.1. Service of a notice is imperative in character for
F maintaining a complaint. It creates a legal fiction. Operation of s.
138 of the Act is limited by the proviso. When the proviso applies,
the main Section would not. Unless a notice is served in conformity
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with Proviso (b) appended to Section 138 of the Act, the complaint
petition would not be maintainable. The Parliament while enacting
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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
r-
issued within a period of 30 days from the date of receipt of
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information from the bank in regard to the return of the cheque as
unpaid. {Para 10) [956-G; 957-A, B)
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M/S. RAHUL BUILDERS v. MIS. ARIHANT FERTILIZERS 953
AND CHEMICAL [SINHA, J.]
3.2. The statute envisages application of the penal provisions. A
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 paid 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 B
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two interpretations. An omnibus notice without specifying as to what
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was the amount due under the dishonoured cheque would not
subserve the requirement oflaw. Respondent No. 1 was not called
upon to pay the amount which was payable under the cheque issued
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