MALOOK CHAND AGROILS LTD Vs. PRAKASH INDUSTRIES LTD

JUDGEMENT

(1.) BY this petition under Section 482 cr. P. C. , petitioners have prayed for quashing of the complaint titled "m/s. Prakash Industries Ltd. v. Malook Chand Agroils and Others" under section 138 of the Negotiable Instruments Act (in short NI Act), on the ground that in the notice of demand, being not of the cheque amount, as envisaged by cluase (b) of the proviso to section 138 of NI Act, prosecution based on such a notice is not sustainable, therefore, petitioners are entitled to be discharged. For the sake of convenience, parties hereinafter, are referred to as the 'complainant' and 'accused' as arrayed in the complaint.

(2.) FACTS in brief are as follows. The complainant filed a complaint under section 138 of the NI Act pleading that the accused approached them for a short term loan of Rs. 50,00,000/- (Rs. Fifty lacs ). On 22. 3. 1993, considering request of the accused, the complainant advanced the said loan for sixty days, with interest at the rate of 29% per annum. The accused paid towards interest Rs. One Lac vide cheque dated 16. 6. 1993 and Rs. 30,000/- through bank draft. The accused issued the cheque for rs. 50,00,000/- (Rs. Fifty lacs) dated 23. 5. 93 drawn on State Bank of india, towards payment of principal loan amount. The complainant presented said cheque for encashment and on 7. 10. 1993 same was returned unpaid with the remarks "exceeds arrangement". On 20. 10. 1993, complainant served a "demand notice" on the accused through advocate demanding principal loan amount alongwith interest due within the statutory period of 15 days. The accused failed to comply with the demand, consequently complaint was filed, and petitioners were summoned for the offence under Section 138 of NI Act. They appeared before the trial court and moved an application for discharge, pleading that the notice did not comply with the legal requirement; there was no cause of action in favour of the complainant and the order of summoning was liable to be recalled. The application was dismissed vide orders dated 2. 7. 2003, by the learned trial court. This order is under challenge.

(3.) LEARNED counsel for petitioners argued that in the notice dated 20. 10. 1993 served by the complainant, instead of demanding the cheque amount of Rs. 50,00,000/- (Rs. Fifty lacs), petitioners were called upon to pay the entire outstanding amount of Rs. 54,50,000/- (Rupees Fifty four Lacs Fifty thousands ). The demand being not of the cheque amount, as envisaged by clause (b) of the proviso to section 138 of NI Act, no prosecution could be launched. In support of this submission, reliance was placed on the recent Supreme Court decision in K. R. Indira v. Dr. G. Adinarayana (2003) 8 SCC 300. Learned counsel for complainant referring to the various clauses of the demand notice argued to the contrary.