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Orissa High Court: Proceedings Cannot Be Invalidated Merely Because Costs For Miscellaneous Expenses Claimed Along With Cheque Amount | Sec. 138 NI Act

The Orissa High Court in the case Hemalata Mohapatra v. Bijay Kumar Pradhan observed and has held that the proceedings initiated under Section 138 of the Negotiable Instruments Act, 1881 cannot be invalidated only because the notice claims the costs for some miscellaneous expenses which being alongside wherein demanding the cheque amount. The single bench […]

The Orissa High Court in the case Hemalata Mohapatra v. Bijay Kumar Pradhan observed and has held that the proceedings initiated under Section 138 of the Negotiable Instruments Act, 1881 cannot be invalidated only because the notice claims the costs for some miscellaneous expenses which being alongside wherein demanding the cheque amount.

The single bench headed by Justice Radha Krishna Pattanaik in the case observed that it being a settled legal position in K.R. Indira (supra), wherein the irresistible conclusion is that the defect in notice cannot invalidate the proceeding when the demand made is only for the cheque amount with additional claim which being towards the miscellaneous expenses.

In the present case, three cheques were allegedly been issued by the petitioner in the plea to the opposite party for an amount of Rs. 14,00,000/- and when they were being presented before the Bank, thus, all stood dishonoured and the same being due to the insufficiency of funds.

Therefore, the legal notice was served upon to the opposite party, wherein the petitioner to pay the cheque amount and in case of legal action, in order to bear the entire cost of the proceeding and the interest on the amount beside the legal fees. Thus, the complaint was filed under section 138 of the NI Act. Further, the petitioner also approached the High Court for quashing the entire proceeding, wherein claiming the notice to be defective as more amount was claimed than what was due for dishonour of the cheques.
The petitioner in the plea also referred to the impugned notice which called upon it to pay the cheque amount of Rs. 14,00,000/- within fifteen days which being from the date of receipt and failing to which appropriate legal action would be taken in that event.
The court also relied upon the decision taken by the Supreme Court, wherein the petitioner contended that such notice cannot be acted upon as it is not permissible to demand more than the dishonoured amount in the notice issued.

Further, the court in the case referred to the decision of Apex Court in the case Vijay Gopala Lohar v. Panduram Ramachandra Ghorpade & Anr, wherein the court held that when the cheque amount and the loan amount is same, thus, the notice issued with demand for payment is per the law.

The court placed reliance on K.R. Indira v. Dr. G. Adinarayana, wherein it has been observed by the Top Court observed that if there is indication in the notice of any other amount covered by the cheque and it is not invalidated. Accordingly, the court dismissed the criminal miscellaneous case being devoid of merit.

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