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The High Court rejected the first contention and held that the criminal prosecution would lie under Section 138 of the Negotiable Instruments Act, without impleading the company of which the accused is the Director as the party.
But so far as the second contention is concerned, the High Court came to the conclusion that the notice that was issued by the complainant on account of dishonour of the cheques having been issued to the accused in his individual capacity and not having been issued to the drawer thereof, no offence can be said to have been committed by the company M/s. Bhalla Techtran Industries Limited, and, therefore, the criminal proceedings cannot be proceeded against by taking recourse to Section 141 of the Act. It is this conclusion of the High Court, which is the subject matter of challenge in these appeals.
It may be stated at this stage that in the earlier round of litigation, when the accused has filed application under Section 482 of the Code of Criminal Procedure, it had been urged that the service of notice, as contemplated under proviso (b) to Section 138 of the Act, has not been proved, but yet the Court refused to exercise jurisdiction under Section 482 and refused to quash the proceedings. The learned Judge after analyzing the provisions of Section 138 of the Negotiable Instruments Act, came to hold that before an offence under the said provision can be said to have been made out, it must be shown that the cheque was presented to the bank for encashment within a period of six months from the date on which it was drawn or within the period of its validity, whichever is earlier ; the payee or holder in due course of the cheque makes demand for the payment of the amount of money under the cheque by giving a notice in writing to the drawer of the cheque within 15 days of information received by him from the bank regarding
dishonour of the cheque; and the drawer of the cheque fails to make payment of the amount of money within 15 days of the receipt of notice.