Demand notice u/s 138 n.i. act
Basavaraj hadimani
(Querist) 22 February 2013
This query is : Resolved
Hello Sir,
Complainant(bank) recieved information of dishonour of ch. on 22-1-2012,legal notice dated 18-2-2012 sent thro U.C.P to the accused on 20-02-2012,but the said notice was servrd to the accused on 24-02-2012. Where as demand notice ought to be served within 30 days from the date of reciept of information of dishonour from the bank.In the above scenario whether the demand notice sent is beyond the limitation period? Please share your valuable openion
Regards
Advocate M.Bhadra
(Expert) 22 February 2013
Please note the following:
(a) The cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, 3["within thirty days"] of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
(d)The case u/sec.138 N.I.have to filed within 30 days fro the date of failing notice of 15 days.
prabhakar singh
(Expert) 22 February 2013
Intimation of dishonor received by payee from bank on 22.01.12 and notice of demand of payment sent on 18.02.12 (well With in time of 30 days),hence NO INVALIDITY IN SENDING NOTICE.It is wrong to understand that"Where as demand notice ought to be served within 30 days from the date of receipt of information of dishonor from the bank."Rather the requirement is to SEND and not to SERVE as you are getting confused.
NOTICE HAS BEEN SENT WELL WITH IN PRESCRIBED period of 30 days.No illegality
at all here.
It may be served any time.Service is not within control of sender.
Thereafter when ever it gets served on the drawer,the drawer is under legal duty to pay the sum demanded to the payee or holder,as the case may be,well within 15 days from the date of your service.In your case the service was effected on 24.02.12(as per information given in query)Then drawer (the accused)was legally obliged to pay by 10.02.12.
In case he did not pay the complaint was required to be lodged within 30 days counting from 10.02.12,that is by 09.03.12.
YOUR QUESTION "whether the demand notice sent is beyond the limitation period?"
MY ANSWER "NO" notice of demand sent was not beyond limitation period.
prabhakar singh
(Expert) 22 February 2013
I KNOW YOU SHALL CLAIM ME ABOUT SCORING MORE
BUT HONESTLY SPEAKING I AM TIRED.
GOOD BY !
Nadeem Qureshi
(Expert) 23 February 2013
1[CHAPTER XVII]
OF PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNTS
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 2["a term which may extend to two year"], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, 3["within thirty days"] of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability].
OBJECTS AND REASONS OF AMENDING ACT OF 2002
The Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due fo insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instruments Act, 1881, namely, sections 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques, Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the Courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act- (Para 1)
Keeping in view the recommendations of the Standing Committee on Finance and other representations, it has been decided to bring out, inter alia, the following amendments in the Negotiable Instruments, Act, 1881, namely:-
(i) to increase the punishment as prescribed under the Act from one year to two years;
(ii) to increase the period for issue of notice by the payee to the drawer from 15 days to 30 days; (Para 4)
DEFENSE ADVOCATE.-firmaction@g
(Expert) 23 February 2013
Sending notice by UCP that is under cetificate of posting is doubtful procedure.
More over how do you know it was deleverd unless you have official receipt from postal dept.
Statutory notice has two provisions in the NI 138, one is sending the notice and other is action by accused after its receipt.
Apex court in Dalmia cement case and even earlier old BHASKARAN case these two facets have been discussed and analysed in detail.
