Section 138 NI Act – Demand Notice Need Not Disclose Nature Of Transaction Leading To Issuance Of Cheque : Kerala High Court

first_imgNews UpdatesSection 138 NI Act – Demand Notice Need Not Disclose Nature Of Transaction Leading To Issuance Of Cheque : Kerala High Court Lydia Suzanne Thomas18 March 2021 6:34 AMShare This – x“The court cannot legislate by prescribing a particular form and cannot require that the nature of the transaction, leading to the issuance of cheque, be disclosed in the notice when the statute does not provide for it.”Answering a reference, the Kerala High Court held that a demand notice under Section 138 of the Negotiable Instruments Act need not disclose the nature of transaction leading to the issuance of cheque.The Division Bench was answering the reference whether a demand notice without a full disclosure of the details of the transaction would be rendered invalid. The Bench, comprising …Your free access to Live Law has expiredTo read the article, get a premium account.Your Subscription Supports Independent JournalismSubscription starts from ₹ 599+GST (For 6 Months)View PlansPremium account gives you:Unlimited access to Live Law Archives, Weekly/Monthly Digest, Exclusive Notifications, Comments.Reading experience of Ad Free Version, Petition Copies, Judgement/Order Copies.Subscribe NowAlready a subscriber?LoginAnswering a reference, the Kerala High Court held that a demand notice under Section 138 of the Negotiable Instruments Act need not disclose the nature of transaction leading to the issuance of cheque.The Division Bench was answering the reference whether a demand notice without a full disclosure of the details of the transaction would be rendered invalid. The Bench, comprising  Justices K Vinod Chandran and MR Anitha ruled that the Negotiable Instruments Act (the Act) did not mandate a format for a demand notice. The Court stated in the case K Basheer v C Usman Koya as follows :, “The court cannot legislate by prescribing a particular form and cannot require that the nature of the transaction, leading to the issuance of cheque, be disclosed in the notice when the statute does not provide for it.” The question was referred to the Division Bench for consideration after a Single Bench hearing an appeal against an Additional Sessions Court’s Order found divergence in the Kerala High Court’s treatment of such cases. The Single Judge was hearing an appeal from the order of an Additional Sessions Judge acquitting the respondent (accused) who was alleged to have dishonoured a cheque. In Kerala High Court decision Divakaran v. State of Kerala, a Single Judge of Justice K Abraham Mathew had held that the nature and date of transaction, and the date of issuance of cheque were material facts. If these were not disclosed in the statutory demand notice, the doors of the Court would be closed for such ‘fortune seekers’, it had been stated. The Single Judge in the case had held that a person accused in a complaint under Section 142 of the Act is entitled to know the material particulars of the accusation levelled before he was tried. A suppression of these particulars would entail acquittal, without anything more, it was stated. Another Single Bench of the High Court took a divergent stance in Surendra Das v. State of Kerala, wherein the Judge opined that an error or an omission to state the nature of debt or liability in a demand notice does not render it invalid. The Court had pointed out that the Act did not prescribe a form in which a demand notice was to be issued under Section 138(b). Drawing from the legislative scheme and intent, the Division Bench stated that a complaint under Section 138 required the following factual allegations, that the cheque was drawn in a valid account by the holder, that its presentation was within six months or validity period; whichever is earlier, that the cheque was dishonoured, that the demand was made by the payee or holder in due course within 30 days of dishonour. The Court surmised that the only additional fact that had to be proved was the fact that the drawer did not pay the sum demanded within 15 days from the date of receipt of the demand. Concluding that the statute did not prescribe a form for a demand notice, the Court quoted Central Bank of India & Anr. v. M/s. Saxons Farms & Ors., wherein it had been categorically held that no form of notice is prescribed under Clause (b) of the proviso to Section 138 of the Act. Holding that the Act only required a payee or holder in due course to notify the drawer of the cheque of its dishonour, the Bench held that the legislation created a presumption in favour of the payee once the ingredients of the dishonour were disclosed. This presumption could not be rendered otiose, the Court emphasized. The Bench summarised the law on dishonour of cheques in this way, “The legislative intention is to overcome the cumbersome procedure of filing police report or complaint and subsequent enquiry or investigation etc., in matters of cheque dishonour. It also seeks to avoid the filing of a civil suit and a further execution for realisation of the decretal amount. This is the reason why Proviso (b) to Sec.138 provides that once the cheque is returned on presentation for reason of insufficiency of funds or for exceeding the arrangement, the payee or the holder in due course may make a demand for payment of money by giving a notice in writing to the drawer of the cheque, but within 30 days of the receipt of information of dishonour from the Bank. Time frame prescribed under the proviso further is an indication to ensure the bonafides of the drawee.” Therefore, the Court declared, “It is also to be noted in this context that the offence u/s.138 of the Act is an offence which would be attracted on the ingredients above referred being satisfied. The statute also provides a presumption in favour of the holder which cannot be rendered otiose. We are, with utmost respect, unable to agree with the requirement mandated by Divakaran that the nature of the transaction should be disclosed in the notice; as that does not appear to be the correct position of law.” On facts, the Court found that there was no business transaction between the accused and the complainant as alleged by the latter. Additionally, when the complainant averred that the accused had failed to respond to his demand notice, the Court stated that a failure to send reply cannot be a circumstance to prove the case of the complainant or demolish the case of the defence. On these terms, the appeal was dismissed.Click here to download the judgmentNext Storylast_img read more

Kroos: I won’t join United

first_img The Bayern Munich midfielder has long been linked with the Old Trafford club, especially as his contract situation with the German champions remains unresolved. Kroos, 24, has a year left with Bayern and has yet to accept their offer of an extension, giving a nod to a possible move away. Press Association United have been reported as suitors but he claims they are not on his radar. Speaking to Bild he said: “I am expecting to play for Bayern Munich next season. “There was a lot of speculation, but Manchester is and was not an issue. “At this point in time I am fully focused on preparations for the 2014 FIFA World Cup.” Rumours of a United move for Kroos started to circulate when David Moyes was in charge, although talk has cooled since the appointment of Louis van Gaal. center_img Toni Kroos has no intention of being a Manchester United player next season.last_img read more

Alex Iwobi: Arsenal New ‘Messi’

first_imgWeeks after the arrival of Unai Emery to the Emirate Stadium, Nigerian international, Alex Iwobi was one of the first Arsenal players to hail the Spaniard, saying he had brought a new lease of life to the Gunners and that his game had improved under him. Indeed, his recent performance proved him right so much so that Arsenal fans hailed him as the club’s version of Barcelona’s MessiSuper Eagles star, Alex Iwobi, has been a different player this season under Unai Emery and his stellar performance in Monday night’s Premier League game against Leicester City in which he earned himself the man-of-the-match award for his crucial part in his side’s counter-attack plan to catch the Foxes on the break.Following the match, YouTube channel AFTV spoke to those leaving the ground about their thoughts on the 22-year-old. And they may have got a bit carried away.“Don’t call him Alex Iwobi anymore, he is the Nigerian Lionel Messi,” one claimed.Before adding: “Emery has brought such a freshness to the side.“He came in and lost the first two games, but that feels so long ago now.” “I think you mean Messi is the Argentinian Iwobi,” one viewer claimed.Another added: “Iwobi doing things so right! Last season he’d make such brain-dead decisions but this season I’m shouting for him to receive it!”And a third claimed: “Iwobi is definitely a candidate for Young Player of The Season!”Meanwhile, Arsenal coach has charged Iwobi to be staying nearer to the box so as to continue scoring and laying assists.“I’m very happy with him and his mentality. He has the quality to play right or left, to do more one-on-ones against the opposition. I want him to stay nearer the box to score and be more aggressive, finding assists for team-mates. This is the way for him and other players,” Emery saidSo far this season, Iwobi’s performances have seen him become a pivotal part of new coach Emery’s plan.Iwobi however said Emery had removed the fear of failure at Arsenal, which has allowed the club to piece together a run of 10 consecutive victories in all competitions.The atmosphere towards the end of the Arsène Wenger years was tainted by negativity, which was not all down to the former manager – rather the broader situation around him and the yearning for change among a large section of the fanbase.One of the consequences was an extreme lack of patience. If the team fell behind in matches, the players would not want to make mistakes and, invariably, they chose not to take risks. The result could be inertia; an inability to make comebacks.Emery has benefitted from a greater degree of slack but, at the same time, he has driven a positive feeling through his bold approach. Arsenal started poorly once again at home to Leicester on Monday night. They trailed 1-0 after 31 minutes and the deficit could and should have been greater.There are defensive holes in the team and it was not difficult to imagine how the Emirates crowd would have reacted last season. But Arsenal remained unafraid to express themselves in an attacking sense and the result was an eventual 3-1 win.“The manager has imposed a new style and we are enjoying our time,” Iwobi said. “We are enjoying each other and the chemistry is good – it’s not just the people who are starting but those on the bench, as well. It’s a team thing and we are all enjoying it.“The manager has just given me the confidence to express myself and to believe in my ability, which I have been trying to show. In training, too, he is always letting me try new things – be positive, be direct and prove it in the games. It is working for me so I just have to keep it going.“Do I feel like a better player than a year ago? I’d just say I am more confident. I feel that even if I make a mistake, I am able to go again. I think that is the difference between me last year and this year.”Iwobi got the nod on the left ahead of Aubameyang and Welbeck against Leicester, and he was a factor in the comeback, getting into dangerous areas towards the end of the first half.“I get the privilege to play with Mesut every day,” Iwobi said. “He is a world-class player. He gives me advice in a different way. He jokes around but he always tells me I can do more. He also gives me the confidence to express myself.”‘I have been training with him since I was 17 and I have seen what he can do. The quality he has is not just in training but as you can see in the match last night, he is a world-class player and he proved that again. Mesut will come across as laid back but he is helping everyone in a different way and he helps me a lot,’ Iwobi said.‘For me, he has just given me confidence to express myself, to believe in my ability which I have been trying to show and basically also in training he is always letting me try new things, be positive, be direct and prove it in the game,’ Iwobi said.‘It is working for me so I just have to keep it going. I am more confident, I feel that even if I make a mistake I am able to go again. I think that is the difference between me last year and this year.’Arsenal are now level on points with Chelsea and remain just two points behind league leaders Manchester City and Liverpool.Since that defeat at Stamford Bridge the north London side are yet to lose a game, and made it 10 in a row with Monday’s victory over Leicester. And the 22-year-old has conceded that things are looking up at the Emirates this term.“Yeah, it’s going well, I’m very confident now. The manager is always being very positive to me, he’s always telling me to keep on going even if I make a mistake,” he told the club’s official website.“That’s what I’m showing, and also proving to myself that I can put in 100 per cent throughout the game, and that’s why I’m shattered right now! Yeah, that’s basically what he’s been telling me.” he aid.Indeed, Super Eagles Manager, Gernot Rohr says Iwobi is free to express himself in the Super Eagles, as long he plays for the collective good of the team.“Perhaps some times he did a little too much individually, he wanted to make a show. We prefer collective football.“But when he can eliminate his opponent it’s very good. He’s with us all the time in confidence. He’s free when he has the ball,” Rohr said.Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegramlast_img read more