LEGAL NOTICE IN INDIA
Legal notice is issued in case of certain disputes espicially consumer complaint, property dispute, check bounce, divorce, eviction legal notice. It is important for you to inform the other person that you are going to initiate a legal action against them.
The filing of a legal notice acts a beginning to your journey of litigation. Therefore it has various aspects in which it is important:
·By sending legal notice it can give a clear intention on the part of the sender to file a lawsuit for the purpose of resolving the issue to which the other party might respond immediately to save oneself from court proceedings.
·A person can easily describe his grievance in a legal notice with the help of an Advocate.
·Serving of legal notice gives an opportunity to the receiver of the legal notice, that is, the opposite party to resolve the issue cordially.
·It acts as a reminder for the receiver of the legal notice about the acts that have intentionally or unintentionally have created a problem for the sender.
The most common cases where legal notice is issued are :
·Disputes related to property such as mortgage, delayed possession delivery by the builder, eviction of the tenant, the partition of family property, etc.
·Notice to the employer for wrongful termination, unpaid salary, violation of any right of the employee by the employer, etc.
·Notice to the employee for violation of the HR policies, sexual harassment act at the workplace, leaving the job without handing over the resignation letter, violation of any provision of the employment agreement, etc.
·Notice to a company manufacturing or providing service of faulty products, faulty services, false advertisement, etc.
·Notice in the case of cheque bounce to the issuer of the cheque.
·Notice in case of personal conflicts such as divorce, maintenance, child custody, etc.
A legal notice is essentially a notice sent by an advocate on the behalf of his/her client. It is not mandatory for a person to send a legal notice through an advocate, he/she can send a legal notice on his/her own accord without the assistance of an advocate.
It is not even mandatory to send a legal notice as there is no specific provision/enactments of law that make it mandatory to issue a legal notice before filing a suit.
A legal notice is generally issued by an advocate on behalf of his/her client for the purpose of soliciting a settlement. It is issued either to accept the settlement or to reject it altogether in order to avail a civil suit or legal remedies.
Criminal Vs Civil in India : Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention is shown.
M AND B FOOTWEAR PVT LTD Vs. R K SALES
HIGH COURT OF BOMBAY Decided on April 01,2008
JUDGEMENT
(1.) HEARD Shri A. M. Nabira, Advocate for the petitioners and Shri d. P. Lalwani, Advocate for the respondent.
(2.) THIS petition has been filed under article 227 of the Constitution of India read with section 482 of the Criminal Procedure code seeking quashing of the order of issuance of process against the petitioners. It may be stated that the respondent has preferred a Criminal Complaint No. 326/2005 in the Court of J. M. F. C. , Nagpur. The complaint was for the offences punishable under sections 406, 420, read with section 34 of I. P. C. It was alleged that the petitioners-accused have committed criminal breach of trust and caused financial losses to the respondent-complainant by not refunding security deposit amongst other allegations. The process was issued against the petitioners by the order dated 1. 9. 2007 passed by the learned J. M. F. C. , Nagpur. Petitioners are challenging that order. Petitioners also seek quashing of the proceedings in criminal Complaint Case No. 326/2005.
(3.) BRIEF facts which need to be noted are that-the respondent-complainant and the petitioners are business firms. They entered into Distributorship Agreement on 31. 12. 2002 for distributing goods of the petitioner No. 1 company in some parts of maharashtra. Petitioner No. 2 is the director of petitioner No. 1 which is a registered company. It is alleged that respondent appreached with the proposal for carrying on the business of the distribution of the goods marketed by the petitioners. It is alleged that thereafter, there were some disputes between parties; so also exchange of notices and even civil suit was filed by the respondent- (complainant ). Respondent-complainant also filed a criminal complaint as stated above for the aforesaid offences. When the said complaint was filed, the learned Magistrate initially called report under section 202 of Cri. P. C. After hearing the complainant, perusing his verification statement and report under section 202 of cri. P. C. , he issued process against the petitioners for the offences under sections 406 and 420 of the I. P. C. This order dated 1. 9. 2007 is challenged in this petition. The quashing of the complaint case proceedings instituted by respondent-complainant is also sought.
(4.) Learned counsel for the petitioners . Shri Nabira submitted that there was an agreement of business between the parties. The bank guarantee was also to be furnished by the respondent. The agreement of business with all details was entered into between the parties on 31.12.2002. Thereafter, there was exchange of letters and notices between the parties. Respondent also filed Civil Suit for recovery of the due amount against the petitioners. The suit was for recovery of rupees nine lacs and odd bearing Civil Suit No.1032/2005. Almost simultaneously respondent . complainant filed the instant complaint against the petitioners for the aforesaid offences. It is further submitted that that the transaction between the complainant and the petitioners was of commercial & civil nature and therefore, there could not be any offence under section 420 or section 406 of the Indian Penal Code. According to him, as it was a matter of civil nature, criminal complaint would not lie. The same should not have been entertained by the learned Magistrate. According to him; the order of issuance of process was totally illegal. It causes prejudice and it is clearly abuse of process of law inasmuch as the matter between the parties is of civil nature and in fact civil suit was filed. Criminal complaint proceedings instituted against the present petitioners is one of the coercive method for getting success in the civil suit. It is also submitted by him that Director of the petitioner's company never signed any agreement and therefore, Director is not liable for any criminal offence. It is also his submission that during the exchange of correspondence and even notices there was no whisper of criminal intention attributed to the petitioners and therefore, there cannot be any criminal liability of the petitioners. He therefore, submitted that as the matter between the parties is of civil nature, it does not constitute any mens rea for invoking jurisdiction of the criminal courts for the offences under section 406 and 420 of the Indian Penal Code. Therefore, according to him, it is sheer abuse of process of law as such the proceedings against the petitioners need to be quashed so also the order of issue of process against them; under section 482 of Criminal Procedure Code.
The offence under section 406 is antithesis to an offence under section 420 IPC. Even otherwise, dishonest intention is an essential ingredient of both these offences. To constitute an offence under section 406 or section 420 I.P.C. it is for the prosecution to allege and prove that there was dishonest intention to do the particular act on the part of the accused person.
(2005) 10 SCC 228 Anil Mahajan vs. Bhor Industries Ltd & another wherein the Apex Court has held that:
From mere failure of a person to keep up promise subsequently, a culpable intention right at the beginning, that is, when he made the promises cannot be presumed. A distinction has to be kept in mind between mere breach of contract and the offence of cheating. It depends upon the intention of the accused at the time of inducement. The subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention is shown at the beginning of the transaction. The substance of the complaint is to be seen. Mere use of the expression cheating in the complaint is of no consequence.
In (2007)7 Supreme Court Cases 373 Vir Prakash Sharma vs. Anil Kumar Agrawal & another, it has been observed that:
8- The dispute between the parties herein is essentially a civil dispute. Non-payment or underpayment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust contained in Section 405 of the Penal Code can be said to have been made out in the instant case. Section 405 of the Penal Code reads thus: .405. Criminal breach of trust. Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits' criminal breach of trust'. Neither any allegation has been made to show existence of the ingredients of the aforementioned provisions or any statement in that behalf has been made.
Time to dishonour Section 138?
Why there is little reason to
continue with India's cheque bounce law
Once upon a time in America and Europe debtors who could not
repay were incarcerated in what were known as Debtors Prisons. We are not
talking of yesteryear Nirav-Mallyas who had siphoned off top dollars from
Victorian lenders, but ordinary men who had borrowed money to run their
businesses or meet personal exigencies but failed to repay for whatever reason.
By early twentieth century the practice of sending debtors to prison had become
more or less obsolete thanks to the growing consciousness about human rights
and the rapid evolution of modern bankruptcy laws. The concept of Mens Rea
became an established tenet whereby failure to repay borrowed monies became a
culpable criminal offence only if there was an “intent to defraud”. Article 11
of the ICCPR – International Covenant on Civil and Political Rights codified
this tenet by stating that "No one shall be imprisoned merely on the
ground of inability to fulfil a contractual obligation”.
In India, while Section 51 (c) of Code of Civil
Procedures (CPC) gave powers to the Courts to arrest and detain defaulting
‘judgement debtors’, the same could be resorted to only if the judge was
satisfied that the debtor had the means to pay but was wilfully refusing to do
so. In one of the most celebrated judgements on the issue (Jolly George
Varghese Vs. Bank of Cochin) Justice V. R. Krishna Iyer, with his inimitable
flourish wrote that “to be poor, in this land of Daridra Narayana, is no crime
and to 'recover' debts by the procedure of putting one in prison violates
Article 21 (of the constitution)…
With domestic and international jurisprudence well
aligned on the principle that not being able to pay off a debt is not a crime,
one would have been justified in assuming that there would be little scope for
future laws that urged otherwise. But in 1988, new Sections Nos. 138 to 142
were inserted in the colonial era Negotiable Instruments Act, making dishonour
of cheques a criminal offence punishable by imprisonment and fines. This
literally opened a Pandora’s Box of litigatory chaos. As on 31/12/2019 nearly
36 lakhs cheque dishonour cases (constituting nearly 15% of the overall
pendency of criminal cases) were pending in various courts, majority of which are
proceedings against individuals or small businesses. Leave alone humaneness and
dignity, these Sections deserve to be repealed merely for the way they are
clogging up our legal system.
The major lacuna in the law is
that there is a presumption of mens rea without need for any additional proof.
The mere fact that a cheque is dishonoured is treated as proof of criminal
intent. Let us examine two scenarios to understand the frailty of such presumption.
First, assume that someone goes to a shop, buys a TV and issues a cheque
towards payment which bounces. In this case it is safe to presume that the
person had intention to cheat, for he would (or should) have known that the
cheque is likely to bounce. Now, take a variation of the same scenario: what if
the person takes a loan from a lender to buy the TV and hands over the
post-dated cheque/s as security for payment on a future date. Both borrower and
lender are aware that at the time of writing the cheque/s there is no liquidity
in the account to honour them. The borrower merely believes he can arrange
liquidity at a future date and the lender also concurs with the assessment;
that is why the loan is sanctioned in the first place. Clearly, here criminal
intent cannot be presumed in the absence of corroborative evidence such as
forged documents, false claims etc. But sadly, a good percentage of Section 138
cases relate to cheques issued as guarantees for future payments, often to
shadow banks and private money lenders and that too for amounts substantially
higher than the initial sums owed, due to application of usurious interest
rates.
Perhaps at the time of original
legislation of Section 138 there was some rationale and justification for it.
Banking habit was spreading in India thanks to two rounds of nationalisation
and resultant branch expansion. Cheques were the primary means of transacting
through banks and most commercial transactions were settled through them. In
that backdrop the argument for employment of coercive legislation to instil
banking discipline and responsible usage of cheques might have held some merit.
But things have changed dramatically over the last 2 decades. Most of the
payments have moved to plastic or electronic channels and cheques have become
mere instruments for securing credit or obtaining deferred payment. In the
changed scenario there is little reason to continue with this law especially
since it has been decreed through case laws that Section 138 provisions cannot
be invoked for corporate defaults once a moratorium under Section 14 of
Insolvency and Bankruptcy Code is announced. This has made the law almost
toothless as a deterrent against big corporate defaults, so why single out
lesser mortals to bear its brunt?
By Prakash P B,.The
author is a seasoned banker with over 25 years experience in domestic and
international banking.