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CASE

COMMENT

ON

RAMAWATI

SHARMA

VS

UNION OF

INDIA

SUBJECT- LAW OF CONTRACTS

FACTS

Shri Rahul Malaviya filed two complaints against Smt. Ramawati Sharma, Smt. Rama Shankar Sharma and Shri Suresh Chandra Sharma. In the firs t cas e, the accused, Smt. Ramawati Sharmahad taken a loan from the complain ant and with a view to repay the same she had issued a cheque. The cheque was drawn on the Kisanganj Branch of Allahabad Bank at D elhi, and it was deposited in Indian Overseas Bank, Allahabad. The cheque could not be encashed as the drawer of the cheque had directed that no payment under the cheque should be made.On the request of the accus ed, the cheque was withheld. A legal noticewas served upon the accus ed yet she failed to make the cheque payment of Rs. 30,000/-. The s econd case was against Smt. Rama Shankar Sharma and Shri. Sures h Chandra Sharma. The accused failed to pay a sum of Rs. 30,000/- vide via cheque for the purpose of repayment of loan. The cheque was drawn on Canara Bank, Wazirpur Branch, Delhi. There was no sufficient deposit in the bank with the holder. The case was filed after due notice and failure to pay the complainan t, Shri. Rahul Malaviya. The accused are the petitioners in the present matter at hand. The basic prayer is these writ petitions cover the validi ty of section 138 of The N.I. A ct. 1

RELEVANT ISSUES

 Whether section 138 of the Negotiable Instruments Act, 1881 is violativ e of Articles 14, 19, 20 and 21 of the Constitut ion of India?  Whether the liabili ty to repay the loan is simply a civil or crimina l liabil ity? It w as contended that the grounds to pronounce the arrangemen ts as ultra vires w ere that he N.I. Act thought of at any rate three sorts of debatable ins truments, to be specific, promissory note, bill of trade and check, and the law had made culpable a disappointment of encashment upon check jus t and not upon the other two kinds of debatable instruments. It was additiona lly expressed that the risk to reimburse an advance is without a doubt a common one and for that, no crimina l obligation could have been connected, even by making an enactmen t. (^1) The Negotiable Instruments Act, 1881.

The s cholarly direction demanded that for bringing about an advance, an individual couldn't be made at risk criminal ly. While we consent to his accommoda tion in all, we would just call attent ion to that despite our reques t the educated direction couldn't demonstrate if the reformatory arrangement was for the advance itself or for certain further activity concerning the indebted person to show a reimbursement of the obligation. Section 138 of the N. I. Act doesn't rebuff the demonstration of taking advance however it punishes an individual who proposed to reimburse the advance by the issuance of a check and the check isn't encashed because of deficiency of reserve in the record. This further activity for the indebted pers on can't be compared with his move of making the advance and w e s hould vary with the entries of the scholarly guidance that Section 138 is an arrangement for rebuffing one for taking an advance. Section 138 states that"D is honour of the check for inadequacy, and so forth., of assets in the record. Where any check drawn by an individual on a record kept up by him with a financier for the installment of any measure of cash to someone else from out of that represent the release, in entire or to some extent, of any indebted person another risk, is returned by the bank unpaid, either due to the meas ure of cash remaining to the credit of that record is lacking to res pect the check or that it surpasses the sum masterminded to be paid from that account by an understanding made with that bank, such individual will be esteemed to have submitted an offense and will, without bias to s ome other arrangement of this Act, be rebuffed with detainment for a term which may reach out to one year, or with fine which may stretch out to double the measure of the check, or with both : Provided that nothing contained in this section shall apply unless— (a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) The payee or the holder in due course of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. (c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due cours e of the cheque within fifteen days of the receipt of the said notice. 2 (^2) The Negotiable Instruments Act, 1881.

introduced because all the fact that in the business transaction it is obs erved that the issuance of cheques to discharge the date for further liabil ity is the basic transaction to avoid image create liabi lity people do degree course of issuing of a cheque which bounces on a presentation at the. The provision of one section 138 may not be biased in nature becaus e a promis sory note differs from cheque, this can be because while issuing a cheque, the drawer can make payment to himself by writing and promissory note, a drawer cannot be the drawee or make payment to himself like in cheque. Only a cheque out of the possible bill of exchange has been chosen to come under the purview section 138. The court, in this case, made it very clear that the payment provision under section 138 Please note for the loan its elf but the certain further action only part of the day after that is the is s uance of the cheque for the discharge of a debt or liabili ty. Therefore, we can see that the Liberty of a person is not being curtail ed by an arbitrary procedure and such a provision is violativ e of Article 21 of the Cons titution.