NEGOTIABLE INSTRUMENT ACT

1. All the High courts were ordered to issue directions magistrates to record the reason for conversion of trail from summary trial to summon trial;
2. Inquiry under section 202 shall be conducted in order to ascertain whether there is any case against the accused or not when such accused reside outside jurisdiction of such magistrate who is taking cognizance;
3. Evidence of witnesses on behalf of complainant should be taken on affidavit;
4. Court suggested to amend the Act for provision of one trial against a person for multiple offences filed under section 138 of NI Act committed within 12 months irrespective of section 219 of Crpc;
5. Trial court have no inherent power to review or recall the issue of summons, however in the light of section 322 of Crpc trial court have power to check the correctness of the order of issue of process in a case where it is brought to the notice of the court that there is lack of jurisdiction to try complaint;

Yes, the demand notice is mandatory under section 138 of the NI Act; in Shakti Travel & Tours v. State of Bihar, (2002) 9 SCC 415 court observed that it is mandatory to serve the notice for maintainability of case of cheque bounce. In a case where a cheque bounced and notice is not served and a complaint is filed under section 138 or in a case where a notice is served however, a complaint has been filed before the completion of 15 days provided in section 138 (c) will result in non-compliance of the procedure provided under the law.

A complaint under section 138 can be filed by a natural person or by an artificial or legal person, legal heirs or representative in case of death of the complainant for enforcement of rights. Section 138 of the Act “the payee or the holder in the due course of the cheque makes demand of the amount specified in the cheques which is bounced and not paid even after sending demand notice as directed in section 138 clause (b) to the drawer of the cheque.

There are certain key elements which need to be present to file a complaint under section 138 of the NI Act without the same a complaint under section 138 is not maintainable. Moreover, the magistrate who is empowered to take cognizance under section 142 on the said complaint will be barred by the law to proceed and take cognizance. The apex court in Kusum Ingots & Alloys Ltd. (supra) court ascertained and emphasized the ingredients of section 138 of the NI Act as under in para 10:

Three judges bench in Yogendra Pratap Singh (supra) overruled Narsingh Das (supra) and upheld Sarav Investment (supra) therefore it could be inferred that any complaint filed before completion of 15 days as prescribed under section 138 (c) is not maintainable and further remedy is to file a fresh complaint within the time prescribed under section 142(b) and in a case where no time left as specified under section 142(b) recourse is the proviso which was added with amendment as aforesaid thereby specify reason for delay in filing complaint.