NI Act| Obligation Is Of Payee To Send Notice To Drawer On Correct Address: Tripura High Court

Update: 2023-08-17 04:30 GMT

The Tripura High Court held that there is a distinction between ‘giving of notice’ and ‘receipt of notice’. If the drawer fails to pay within 15 days after receiving the notice, only then the offence would be completed, the Court emphasised. The Court held that the payee must send a formal notice to the correct address of the drawer.

Justice T. Amarnath Goud observed, “With regard to the “giving of notice” and “receipt of notice” this court is of the view that it is amply clear from a bare reading of the sub-clause of Section 138 of the NI Act that on the part of the payee, he has to make a demand by giving a notice” in writing. If that was the only requirement to complete the offence on the failure of the drawer to pat the cheque amount within 15 days from the date of such “giving” the travails of the prosecution would have been very much lessened, but the legislature says that failure on the part of the drawer to pay the amount should be 15 days of the receipt of the said notice. It is therefore clear that “giving notice in the context is not the same as receipt of Notice. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the Notice to the drawer in the correct address”.

Senior Advocate P. Roy Barman appeared for the Appellant and Senior Advocate P.K. Biswas with Advocate R. Nath appeared for the Respondents.

A complaint was filed against the Respondent for issuing a cheque of Rs.9,75,000/- with insufficient funds in their account. The Appellant had given the money to the Respondent on the assurance that it would be repaid within a year. The Respondent was sent a legal notice to refund the amount within 15 days but failed to return the amount. Therefore, the Appellant lodged a complaint before the Chief Judicial Magistrate (CJM), which was dismissed. An Appeal was filed before the High Court challenging the judgement of the CJM.

The Court placed reliance on Sections 138 and 139 of the Negotiable Instruments Act (NI Act) and Section 27 of the General Clauses Act, 1987 (GC Act) and emphasised that when such a formal demand is made, the period of 15 days commences.

The Court noted that the Respondent's wife received the notice, and it was reasonable to assume that the Respondent knew about it. The Respondent's signature on the check indicates an admission of the debt.

“It is an admitted fact that the wife of the respondent had duly received the Notice, and it was nowhere pleaded by the respondent that he and his wife were living separately during the relevant point of time, hence burden was upon the respondent to substantiate that he did not receive the Notice. It is submitted that just to evade the liability of Section 138 of the Negotiable Instruments Act, 1881, the respondent has taken such umbrage of non-receipt of the Notice. Hence, a reasonable presumption has to be drawn that the husband did have the knowledge regarding the receipt of notice as they were staying together. Thus, it cannot be said that notice served on the wife is not served on the husband under Section 138 of NI Act”, the Court observed.

Accordingly, the Court allowed the Appeal and set aside the impugned judgment.

Cause Title: Nabarun Datta v. Goutam Roy Barman and Anr.

Click here to read/download Judgment

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