N i act

This query is : Resolved 
 


Querist : Anonymous (Querist)
01 July 2020

Dear Experts plz clarify the following
1. What is the result if the drawer not receives the notice under NI Act
2. Banker endorsed insufficient funds, and the payee got issued notice to the proper address, which is mentioned in their agreement, but the drawer is presently away from that address and the notice is returned unserved with an endorsement that "Address left" in such case can the payee proceed to file a complaint


K Rajasekharan (Expert)
01 July 2020

It seems the terms used in the query, particularly the term drawee, is a bit confusing.

The drawer is one who issues the cheque, drawee is the bank, and the payee is the one  who receives the cheque amount.

A cheque case cannot be filed without issuing a due notice to the drawer/maker of the cheque within the time limit specified in the act by following the due procedural formalities. 

If the payee sends the notice to the drawer (the accused)  in his last known address by registered post, that can be considered as tantamount to service of notice, as per Section 27 of the General Clauses Act.

Even if the drawer is away and the notice reached his address, and got returned in his absence with the note that "addressee left", the payee can file a case considering the sending of notice as "deemed service of notice".


Querist : Anonymous (Querist)
01 July 2020

Sir Thank you very much for your kind response and clarification regarding the issuance of notice under NI Act, and more am sorry to say that the word drawee in my second point was typographical mistake

Dr J C Vashista (Expert)
02 July 2020

The connotation "drawer" is correctly used in the post since the author of the cheque has drawn as "drawer" in favour of "drawee" / "payee"of the cheque, if the statement of author is correct.
The notice u/s 142/ 138 of the Negotiable Instruments Act, 1881 is presumed as served as held by Apex Court in D. Vinod Shivappa vs. Nanda Belliappa, Latest Caselaw 344 SC, (2006) 6 SCC 456 while discussing service of legal demand notice and presumption thereof in case of report of “refusal”, “left”, “not available” etc, laid that if in each such case the law is understood to mean that there has been no service of notice, it would completely defeat the very purpose of the Act. It would then be very easy for an unscrupulous and dishonest drawer of a cheque to make himself scarce for sometime after issuing the cheque so that the requisite statutory notice can never be served upon him and consequently he can never be prosecuted. In such situation, upon appearance the accused will get ample opportunity to either prove the conditions favoring him or to compound the matter by making payment.

N.J.S.Rajkumar alias narasimha (Expert)
02 July 2020

Very Well Attended by our Learned Advocates / Experts Mr. K.Rajasekharan and Dr. J. C. Vashista . Agreed and Appreciated.

K Rajasekharan (Expert)
02 July 2020

A write up on cheque dishonour case including its procedural formalities  was prepared by me sometime ago  in a near comprehensive nanner as possible and touching upon some essential things  within a 12 page limit.

I am linking it below for those who would like to have a look at it at
http://lawwatch.in/2020/03/14/Dishonour%20of%20cheque%20&%20its%20consequences/

Rajendra K Goyal (Expert)
02 July 2020

You said:
1. What is the result if the drawer not receives the notice under NI Act

Reply:

There are two positions:

a) Notice was not issued – No case of cheque dishonor can be filed without notice.

b) Notice issued not received by drawer: If the notice was sent at last known address / address of drawer, notice returned with the remark addressee left the place/ refused to accept, the notice is considered as duly served.


Rajendra K Goyal (Expert)
02 July 2020


You said:
2. Banker endorsed insufficient funds, and the payee got issued notice to the proper address, which is mentioned in their agreement, but the drawer is presently away from that address and the notice is returned unserved with an endorsement that "Address left" in such case can the payee proceed to file a complaint

Reply:

Yes, the drawee of the cheque has ground to lodge complaint in the given situation.

N.J.S.Rajkumar alias narasimha (Expert)
03 July 2020

An Very Good Article by Learned Advocate Mr.K.Rajasekharan . Appreciated.

Rajendra K Goyal (Expert)
03 July 2020

Really a very informative article by the expert K. Rajasekharan. Thanks.

venkatesh Rao (Expert)
03 July 2020

Really wonderful to have such experts on panel.

K Rajasekharan (Expert)
06 July 2020

Nice to learn that the article is really useful even according to some of the learned friends here. Thanks to all.

Rajendra K Goyal (Expert)
06 July 2020

Query dealt with, author may return with any further question on the query.



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