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K. Madhu and anr. Vs. Omega Pipes Ltd. and anr. - Court Judgment

SooperKanoon Citation
SubjectCommercial
CourtKerala High Court
Decided On
Case NumberCriminal M.C. No. 1941 of 1993
Judge
Reported in1994(1)ALT(Cri)603; [1996]85CompCas263(Ker); 1994CriLJ3439
ActsNegotiable Instruments Act, 1881 - Sections 138
AppellantK. Madhu and anr.
RespondentOmega Pipes Ltd. and anr.
Appellant Advocate M.V.S. Nampoothiry,; K. Kunhirama Poduval and; P.V. Kunh
Respondent Advocate P.K. Sureshkumar and; V.J. Mathew, Advs. for respondent No. 1 and;
DispositionPetition dismissed
Cases ReferredGovinda Rao v. Addl. Secretary
Excerpt:
- .....of a municipality. as per that proviso, no such resolution shall be moved unless at least fifteen days' notice has been given of the intention to move the resolution. in govinda rao's case [1987] 1 klt 253, the division bench of this court considered the scope of a notice contemplated in section 79 of the gold (control) act, 1968, in which adjudicatory proceedings are not to commence unless the owner of the contraband 'is given a notice in writing'. in both the provisions the expression has been used in the passive voice while in clause (b) of section 138 of the act, it is used in the active voice. that apart, the period mentioned in the provisions (considered in the two decisions) commences only from the date of notice being given, whereas the period of fifteen days mentioned in clause.....
Judgment:

K.T. Thomas, J.

1. What is meant by the expression 'giving a notice in writing' in the context in which it is used in Clause (b) of the proviso to Section 138 of the Negotiable Instruments Act, 1881 (for short 'the Act') According to the petitioner, there is no 'giving' of notice until notice is delivered to the drawer of the cheque. If the said contention deserves acceptance, the complaint filed against the petitioner is liable to be dismissed. As the Judicial Magistrate of the First Class took cognizance of the offence upon the institution of the complaint and issued process to the accused, he has filed this petition under Section 482 of the Code of Criminal Procedure for quashing the proceedings.

2. The case spelt out in the complaint, in short, is that the cheque issued to the complainant for rupees two lakhs was returned dishonoured due to insufficiency of funds in the account and the bank intimated the fact to the complainant through a memo dated May 19, 1993 ; the complainant sent notice by registered post to the accused on June 21, 1993, demanding payment of the amount ; and the notice was received by the accused on June 24, 1993. If the date of receipt of notice is the crucial date in the process of 'giving notice' as envisaged in Clause (b) of the proviso to Section 138 of the Act, the notice should have been received at least on June 23, 1993. The said clause reads thus :

' Provided that nothing contained in this section shall apply unless-- ... (b) the payee or the holder in due 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, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.'

3. Shri K. Kunhirama Poduval, advocate, who argued the case for the petitioner, relied on the following observations of the Supreme Court in Narasimhiah v. Singri Gowda, AIR 1966 SC 330, 332 :

'Giving of anything as ordinarily understood in the English language is not complete unless it has reached the hands of the person to whom it has to be given. In the eye of law, however, 'giving' is complete in many matters where it has been offered to a person but not accepted by him. Tendering of a notice is in law, therefore, giving of a notice even though the person to whom it is tendered refuses to accept it. We can find, however, no authority or principle for the proposition that as soon as the person with a legal duty to give the notice despatches the notice to the address of the person to whom it has to be given, the giving is complete.'

Learned counsel for the petitioner invited my attention to the decision of a Division Bench of this court which has followed the said observations in Govinda Rao v. Addl. Secretary [1987] 1 KLT 253, 256. Bhaskaran Nambiar J. has observed in the decision that 'the expression (giving of notice) understood in the common parlance would convey that the notice must be served or tendered in order to complete the process of giving of such notice.'

4. The aforesaid interpretation is particularly relevant in the context in which the expression 'giving of notice' has been used in the respective enactments. In Narasimhiah's case, AIR 1966 SC 330, the Supreme Court considered the scope of a notice contemplated in the proviso to section 27(3) of the Mysore Town Municipalities Act, 1951, in connection with a no confidence resolution moved against the president of a municipality. As per that proviso, no such resolution shall be moved unless at least fifteen days' notice has been given of the intention to move the resolution. In Govinda Rao's case [1987] 1 KLT 253, the Division Bench of this court considered the scope of a notice contemplated in Section 79 of the Gold (Control) Act, 1968, in which adjudicatory proceedings are not to commence unless the owner of the contraband 'is given a notice in writing'. In both the provisions the expression has been used in the passive voice while in Clause (b) of Section 138 of the Act, it is used in the active voice. That apart, the period mentioned in the provisions (considered in the two decisions) commences only from the date of notice being given, whereas the period of fifteen days mentioned in Clause (b) of Section 138 of the Act commences far earlier than notice.

5. The question is whether the said interpretation can be imported to the context in which the expression is used in Clause (b) of the proviso to Section 138 of the Act. If a strict and literal interpretation would result in defeating or frustrating the purpose of giving a notice to the drawer, it must be avoided. To salvage the purpose a liberal interpretation is justified. In Maxwell's Interpretation of Statutes, the learned author has pointed out that 'provisions regarding the giving of notice often receive a liberal interpretation' (page 99 in the 12th edition). In Black's Law Dictionary 'giving of notice' is distinguished from 'receiving of notice'. 'A person 'notifies' or 'gives' notice to another by taking such steps as may be reasonably required to inform the other in ordinary course whether or not such other actually comes to know of it'. A person 'receives' a notice when it is duly delivered to him or at the place of business (vide page 958, 5th edition). So the guideline can be collected from the setting or context and the object sought to be achieved through such notice and the practical incidence thereof. Liberal interpretation is needed in the context, as for the person who has the statutory obligation to give notice since he is presumed to be the loser in the transaction, for whose interest the very provision is made.

6. In Clause (b) of the proviso to Section 138 of the Act, the payee has the statutory obligation to 'make a demand by giving notice'. The collocation of the words conveys the requirement to be complied with by the payee in the special circumstances. The thrust in the clause is on the need to 'make a demand'. It is only the mode for making such demand which the Legislature prescribed to be done by 'giving a notice'. It has to be borne in mind that the time for giving such notice ends with the expiry of 15 days of receipt of information from the bank regarding return of the cheque. If actual receipt of notice is the crucial point in giving the notice, when shall the payee send the notice Is it enough that he sends it just two or three days before the end of the said period, since the postal authority would take the notice to the addressee with reasonable despatch and promptitude.

7. In the above context, it is useful to know that in Clause (c) of the proviso the drawer of the cheque is given fifteen days from the date 'of receipt of the said notice' for making payment. This affords clear indication that 'giving notice' in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment. The payee has to perform the former process by sending the notice to the drawer at his correct address. If receipt or even tender of notice is indispensable for giving the notice in the context envisaged in Clause (b), an evader would successfully keep the postal article at bay at least till the period of fifteen days expires. Law shall not help the wrongdoer to take advantage of his tactics. Hence, the realistic interpretation of the expression 'giving notice' in the present context is that, if the payee has despatched the notice to the correct address of the drawer reasonably ahead of the expiry of fifteen days, it can be regarded that he made the demand by giving notice within the statutory period. Any other interpretation is likely to frustrate the purpose for providing such a notice.

8. In view of the said interpretation, the complaint is not liable to be dismissed for want of notice contemplated in Clause (b) to the proviso to Section 138 of the Act. Accordingly, the criminal miscellaneous case is dismissed.


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