The Supreme Court of India in the case of Vijay Gopala Lohar v. Pandurang Rammchandra Ghorpade observed that a reference to ‘Loan Amount’ and not to ‘Cheque Amount’ in notice issued under Section 138 of the Negotiable Instrument, Act is valid unless both the Amount are same.
In the aforesaid mentioned case Appellant took a loan of Rs. 50,000/- with an assurance that he would return within six months and in return issued two cheques for an amount of Rs 25,000/- each in favour of respondent. However, the cheques were deposited in the bank by respondent which were returned with an endorsement “fund insufficient”. The respondent issued two notices but when no payment received even after notice, he filed two complaints under Sec. 138 of N.I. Act.
The amount of 25,000/- was mentioned in the notices issued but a reference was made to the loan amount which had to be returned. The trial court in its judgement declared the notice to be defective on the grounds that notice does not mention ‘cheque amount’.
However, a contrary view is take in an appeal filed before the HC where it was observed that “the words ‘loan amount’ should not have been mentioned in the notice. However, the High Court was convinced that the respondent demanded the payment of Rs.50,000/- which was the cheque amount” and thereby declared the notice to be valid under Sec 138 of N.I., Act.
The Counsel for appellant cited case of Suman Sethi vs. Ajay K. Churwal & Anr.(2000) 2 SCC 380, K.R. Indira vs. Dr. G. Adinarayana (2003) 8 SCC 301 and Rahul Builders vs. Arihant Fertilizers & Chemicals & Anr. (2008) 2 SCC 321 in support of the argument that Notice under Section 138 can be issue only for the cheque amount.
However, SC by upholding the view of HC observed “Whereas, in the instant case, the loan amount and the cheque amount is the same i.e., Rs.50,000/-. Therefore, the above mentioned judgments cited by the learned counsel for the appellant are not applicable to this case.”
Courtesy/By: Jayant Upadhyay
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20 Apr 2019
