The Hon’ble Supreme Court in the case of
M/S. SIL Import, USA V. M/S. Exim Aids Silk Exporters,
Bangalore, reported in 1999 Crl.L.J 2276, has specifically
explained that the statutory interpretation of a particular Act
has to be in accordance with the need to treat it as correct law.
And the Hon’ble Court held that radio gram, fax, e-mail are to be
treated as modes of making demand. Section 94 of the N.I Act
also is in conformity with the said interpretation of the law laid
down by the Hon’ble Supreme Court.
IN THE GAUHATI HIGH COURT
AGARTALA BENCH
CRIMINAL PETITION NO.12 OF 2010
Shri Makarand Patankar,
-Versus –
1.Shri Sujit Saha,
This criminal petition has been filed by the accused/
petitioners for quashing the proceedings of case No. NI 192 of
2009, registered under section 138 of the Negotiable Instruments Act 1891, pending in the Court of Learned Judicial Magistrate Ist
Class, at West Tripura , Agartala .
2. Heard Mr. B. N. Majumder, learned counsel for the
petitioner and Mr. P. Rathor, learned counsel representing the
respondents.
3. The accused /petitioner is the Director of the
Information Interface India Private Limited, which is a registered
private limited Company, having its registered Office in Mumbai.
The petitioner’s Company is engaged in the business of
networking support and solution, which is providing collection
services to various Banks (nationalized, private and foreign). The
petitioner’s company is also providing the services through
coordinator networking by engaging/appointing coordinators. The
networking system of the company was extended in the State of
Tripura and accordingly, the complainant-respondent No.1 was
appointed as the coordinator of the petitioner’s company w.e.f.
14.07.2005, for the purpose of providing services to various
customers of different Banks at Agartala. The sole purpose of
appointment of the complainant-respondent No.1 was for the
purpose of collecting cheques from various customers of the
company and to deposit those cheques immediately in the
approved Banks and to send report of such deposits to the
petitioners company. As per the terms of appointment of the
complainant-respondent No.1, he would be entitled to get his
remuneration for such service rendered by him. 4. The business was going on smoothly and the
complainant-respondent No.1 was also paid his remuneration
regularly since 2005.
The communication between the complainantrespondent No.1 and the petitioner was mostly exchanged
through their respective e-mails and by telephonic conservations.
The registered e-mail of the complainant-respondent No.1 was
sujitnupursaha @ yahoo.co.in and that of the petitioner was
mpatanker@gmail.com.
5. On 18.04.2009, a cheque bearing No.461078, for a
sum of Rs.19,279/-, was issued in favour of the complainantrespondent No.1. However, in the meanwhile, since the company
received complaint from his client against the complainantrespondent No.1, relating to withholding of cheques of various
customers unnecessarily, the company issued ‘stop payment
instruction’ to it’s Banker in respect of the cheque dated
18.04.2009, issued in the name of the complainant-respondent
No.1, till resolution of the complaint received against the
complainant-respondent No.1. It is stated on behalf of the
petitioner that the ‘stop payment instruction’ was given by the
company as the complainant-respondent No.1 failed to perform
his contractual obligations, in terms of the contract.
6. Even in spite of being alive of the facts aforesaid, the
complainant-respondent No.1 presented the cheque to the Banker
for collection, which was in fact returned unpaid on 29.04.2009, and on that day the balance in the Bank Account of the company
was sufficient to satisfy the cheque amount of Rs.19,279/-.
However, the payment was not made for having issued instruction
for stop payment to its Banker by the Company.
7. The complainant-respondent No.1 admittedly on
receipt of the information of return of the cheque aforesaid by
the Banker of the petitioner on the instruction of stop payment,
admittedly made a demand in writing through e-mail dated
29.05.2009, from his e-mail account to the petitioner’s e-mail
account viz. mpatanker@gmail.com, with a remark of special
attention to the in-charge of the office of the Company Mr. Gore.
It would be pertinent to depict herein below the e-mail dispatch of
the complainant-respondent No.1, under the e-mail id of the
petitioner, which reads as follows:-
“from sujit saha< sujitnupur_saha@yahoo.co.
in> hide details May 29
to mpatankar @ gmail.com
date May 29, 2009 4:42 PM
subject About STOP PAYMENT from Agartala.
Attention Mr. GORE,
I received a cheque on 27th April 2008 the
amount Rs. 19279.00 dt. 18.04.2009
cheque no 461078 pay to Sujit Saha, Agartala of
SBI bank. I received this cheque on 27.04.2009
and deposit this to vijaya bank on 28.04.2009..
But the said cheque
unfortunately returned the cause of return
reason is “Payment stoped
discharged to
the bank required “by this time I am not in
Town. When (08.05.2009) I reach Agartala
I found the said are returned. Please confarmed
me why you stop payment
and pl.
release another fresh cheque in favour of me.
The Return reason copy &
cheque are enclosed with this mail.
Thanking you,
Yours
Sujit Saha
Agartala
Former Coordinator.”
However, according to the complainant-respondent
No.1, since the notice was addressed to Mr. Gore, it can not be
treated as valid demand in terms of Section 138 of N.I. Act.
8. However, even thereafter the complainant-respondent
No.1 once again presented the cheque for second time on
18.08.2009, for collection without any consent of the company,
which certainly, followed the similar consequence, since
instruction for stop payment was already issued and
communicated to its Banker.
9. After the cheque was returned unpaid, the complainantrespondent No.1 issued second demand notice dated 29.08.09,
once again through his Lawyer demanding the amount of cheque
along with additional Rs.1,000/- as cost of the notice.
10. It has been contended on behalf of the petitioner that
following the receipt of the demand notice from the complainant–
respondent no.1, the authorized signatory of the Company, sent
an e-mail on 11.09.2009, intimating him that though complaints
were received against him, however, the company was willing to
disburse the amount in due course of time. Accordingly, on
20.10.2009, the authorized signatory of the company issued two
letters, one addressed to the complainant-respondent No.1 and another Xe-rox copy of the same along with a forwarding letter to
the Advocate of the complainant-respondent No.1, together with
the a bank draft of Rs.19000/-. Learned counsel for the petitioner
submitted that a good gesture of a gentleman and amiable
intention of the petitioner to make payment of the amount to the
complainant-respondent No.1 was refused and accordingly, the
registered letter containing the draft was sent back to the
Company. Thereafter, the complainant-respondent No.1 filed a
case against the petitioner and the Company under Section 138 of
the N.I.Act, 1891 and the learned Court below after examining
the complainant-respondent No.1 under Section 200 Cr.P.C.
issued summons upon the petitioner and the respondent No.2.
11. Learned counsel for the petitioner pointed out that the
complainant respondent was also offered payment of the cheque
amount with an offer of compromise which was refused, which
reflects oblique intention to harass the petitioner.
12. According to the learned counsel for the petitioner
the complaint filed by the complainant-respondent No.1 is liable
to be quashed also for the reason that the complainantrespondent No.1 has refused to accept the draft issued by the
Company against the disputed cheque, for an amicable
settlement.
13. By referring to the statement of the complainantrespondent No.1 made in paragraph No.11 of the complaint,
learned counsel for the petitioner contended that the statement has been made with a mala fide intention, since the draft dated
20.10.2009 for a sum of Rs.19000/-, issued in the name of the
complainant-respondent No.1, shows that the complainantrespondent No.1, refused to accept the said registered letter with
a malafide intention. Learned counsel for the petitioner by
referring to judicial pronouncement of various authorities
submitted that where a criminal proceeding is manifestly attended
with malafide and/or where the proceeding is maliciously
instituted with an ulterior motive for wreaking vengeance on the
accused and with a view to spite him due to private and personal
grudge, such malafide proceedings deserves to be quashed.
14. Learned counsel for the petitioner submitted that
facts available on the record in the instant proceeding shows that
the complainant was offered the amount all the while, after
launching of the criminal case by the respondent and also before
the institution of the case by issuing draft dated 20.10.09, finally
in the High Court , but consistently the complainant has refused
to accept the same, which clearly demonstrates that the present
prosecution is manifestly attended by absolute malafide intention
to harass the petitioner and on that score also the proceeding is
liable to be quashed.
15. According to the learned counsel for the petitioner on
the date of filing the complaint cause of action in terms of section
138 read with section 142 of the N.I. Act was not alive since. The
cause of action for launching prosecution under section 138 read
with section 142 NI Act arises only once and in the present case the cause of action arose from the date of sending the aforesaid
e-mail dated 29.05.09 (Annexure-P/1), but the present criminal
complaint was filed on 28.10.09, after lapse of 3 months and
prayer for condonation of delay of 4 days only was sought for,
without showing satisfactory ground to the Court that he had
sufficient cause for not making a complaint within such period.
16. Before proceeding to examine the rival contention of
the respective parties, it would be apposite to depict herein below
Sections 138 and 142 of the N.I. Act, 1891, which read as under:
“138. Dishonour of cheque for insufficiency, etc., of funds
in the account.- Where any cheque drawn by a person on
an account maintained by him with a banker for payment
of any amount of money to another person from out of
that account for the discharge, in whole or in part, of any
debt or other liability, is returned by the bank unpaid,
either because of the amount of money standing to the
credit of that account is insufficient to honour the cheque
or that it exceeds the amount arranged to be paid from
that account by an agreement made with that bank, such
person shall be deemed to have committed an offence and
shall, without prejudice to any other provision of this Act,
be punished with imprisonment for [a term which may be
extended to two years], or with fine which may extend to
twice the amount of the cheque, 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 thirty days] of the
receipt of information by him from the bank regarding the
return of the cheque as unpaid; and
(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 course of the cheque within
fifteen days of the receipt of the said notice.
Explanation.- For the purposes of this section," debt or
other liability" means a legally enforceable debt or other
liability. 142. Cognizance of offences.- Notwithstanding anything
contained in the Code of Criminal Procedure, 1973 (2 of
1974 ),-
(a) no court shall take cognizance of any offence
punishable under Section 138 except upon a complaint, in
writing, made by the payee or, as the case may be, the
holder in due course of the cheque;
(b) such complaint is made within one month of the date
on which the cause of action arises under Clause (c) of the
proviso to Section 138;
[Provided that the cognizance of a complaint may be
taken by the Court after the prescribed period, if the
complainant satisfies the Court that he had sufficient
cause for not making a complaint within such period;]
(c) no court inferior to that of a Metropolitan Magistrate
or a Judicial Magistrate of the first class shall try any
offence punishable under Section 138.]
17. For successfully prosecuting the drawer for an offence
under Section 138 of the Act, the following requirements are
essential:
(i) A cheque was drawn for payment in
discharge of liability/debt.
(ii) Such cheque was presented for payment
within its validity period.
(iii) The payment of the cheque was not made
due to "insufficiency of funds" and accordingly
retuned to the payee by the Bank.
(iv) That the complainant had issued notice to
the drawer, but the drawer had failed to make
payment of the cheque amount within fifteen
days from the date of the receipt of the notice.
18. In today’s business world ordinarily cheques are
presented again and again to the banker, for payment after
dishonour or return by the Bank, during the validity period of the
said cheque. Sections 138 and 142 of the Act, nowhere bar or
prohibit such multiple representation. In Prem Chand Vijay Kumar v. Yash Pal Singh and Anr. 2005 (4) SCC 417, the
Supreme Court examined the provisions of Section 138/142 of the
Act and observed that on each presentation of a cheque and
dishonour a fresh right, but no cause of action accrues in favour
of the payee. The payee may, therefore, without taking
preparatory action in form of notice under Section 138(b) of the
Act, represent the cheque during the validity period. However,
once notice under Section 138(b) of the Act is issued, the
complainant/payee forfeits his right to file a complaint on the
basis of second subsequent dishonour of a cheque on representation. It is observed that cause of action for filing of the
complaint under Section 142(c) of the Act arises only once, i.e.,
when a cheque is presented and dishonoured and notice is issued
under Section 138(b) of the Act. After the cause of action has
arisen, it is not permissible to the payee/complainant to create
another cause of action by re-presenting the dishonoured cheque
again. The Supreme Court, however, clarified that in case notice
is not issued under Section 138(b), then the complainant/payee is
entitled to re-present the cheque and on dishonour, issue notice
and thereafter file a complaint.
19. The relevant extract of Prem Chand Vijay Kumar v.
Yashpal Singh : (2005) 4 SCC 417, reads as follows:
“8. Clause (a) of the proviso to Section 138 does not
put any embargo upon the payee to successively
present a dishonoured cheque during the period of
its validity. This apart, in the course of business
transactions it is not uncommon for a cheque being
returned due to insufficient funds or similar such
reasons and being presented again by the payee after some time, on his own volition or at the request
of the drawer, in expectation that it would be
encashed. The primary interest of the payee is to get
his money and not prosecution of the drawer,
recourse to which, normally, is taken out of
compulsion and not choice. On each presentation of
the cheque and its dishonour, a fresh right — and not
a cause of action — accrues in his favour. He may,
therefore, without taking pre-emptory action in
exercise of his such right under clause (b) of Section
138, go on presenting the cheque so as to enable
him to exercise such right at any point of time during
the validity of the cheque.
9. But once he gives a notice under clause (b) of
Section 138, he forfeits such right as in case of
failure of the drawer to pay the money within the
stipulated time, he would be liable for offence and
the cause of action for filing the complaint will arise.
10. In a generic and wide sense (as in Section 20 of
the Civil Procedure Code, 1908 (in short “CPC”)
“cause of action” means every fact which it is
necessary to establish to support a right or obtain a
judgment. Viewed in that context, the following facts
are required to be proved to successfully prosecute
the drawer for an offence under Section 138 of the
Act:
(a) that the cheque was drawn for payment of an
amount of money for discharge of a debt/liability
and the cheque was dishonoured;
(b) that the cheque was presented within the
prescribed period;
(c) that the payee made a demand for payment of
the money by giving a notice in writing to the drawer
within the stipulated period; and
(d) that the drawer failed to make the payment
within 15 days of the receipt of the notice.
Proceeding on the basis of the generic meaning of
the term “cause of action”, certainly each of the
above facts would constitute a part of the cause of
action but clause (b) of Section 142 gives it a
restrictive meaning, in that, it refers to only one fact
which will give rise to the cause of action and that is
the failure to make the payment within 15 days from
the date of the receipt of the notice. A combined
reading of Sections 138 and 142 makes it clear that
cause of action is to be reckoned accordingly. The
combined reading of the above two sections of the
Act leaves no room for doubt that cause of action
within the meaning of Section 142(b) arises — and
can arise — only once.11. The period of one month for filing the complaint
will be reckoned from the day immediately following
the day on which the period of fifteen days from the
date of the receipt of the notice by the drawer
expires.
12. As noted in Sadanandan Bhadran case1 once a
notice under clause (b) of Section 138 of the Act is
“received” by the drawer of the cheque, the payee or
holder of the cheque forfeits his right to again
present the cheque as cause of action has accrued
when there was failure to pay the amount within the
prescribed period and the period of limitation starts
to run which cannot be stopped on any account.
13. One of the indispensable factors to form the
cause of action envisaged in Section 138 of the Act is
contained in clause (b) of the proviso to that section.
It involves the making of a demand 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”. If no such notice is given within the said
period of 15 days, no cause of action could have
been created at all.
14. Thus, it is well settled that if dishonour of a
cheque has once snowballed into a cause of action it
is not permissible for a payee to create another
cause of action with the same cheque.
15. In SIL Import, USA v. Exim Aides Silk Exporters it
was held that the language used in Section 142
admits of no doubt that the Magistrate is forbidden
from taking cognizance of the offence if the
complaint was not filed within one month of the date
on which the cause of action arose. Completion of
the offence is the immediate forerunner of rising of
the cause of action. In other words, cause of action
would arise soon after completion of the offence and
period of limitation for filing of the application starts
running simultaneously.”
20. Learned counsel for the petitioner submitted that
order condoning the delay of 4 days, as mentioned in paragraph
13 of the complaint (Annexure-P/5 to the criminal petition
no.12/2010), was admittedly passed without giving a notice to
the petitioner, which also violates the basic principle of natural
justice namely audi alterem partem, and on that score also the present prosecution before the Ld. trial Court is vitiated and liable
to be quashed. Moreover, it is apparent from the order dated
28.10.2009 and order dated 27.11.2009 respectively, passed by
the Ld. Court below that the cognizance of the offence under
section 138 of the act was taken before condoning the delay of 4
days, as prayed for by the complainant, which is absolutely
contrary to the statutory prescription.
21. In reply to the above, learned counsel for the
respondent, in his written argument however contended that
though the petitioner cited many grounds for quashing the
criminal case in his revision petition before this Court, however, at
the time of argument, he confined to his submission mainly on
two grounds; (1) whether the e-mail sent in the address of the
petitioner, with a remark of special attention of Mr. Gore amounts
to demand notice, in terms of Section 94 of the N.I.Act and, if so,
whether demand notice dated 29.08.2009, sent by the
complainant-respondent No.1 to the petitioner and the accusedCompany on the dishonor of cheque for the second time amounts
to second notice; and (2) whether the complainant-respondent
No.1 in terms of Section 142 of the N.I.Act filed any petition
explaining delay in filing the complaint petition and, if so, whether
the learned Court below can take cognizance of the complaint
without hearing the petitioner and the accused-Company?
22. Learned counsel for the complainant respondent No.1
referring to the provision of Section 94 of the N.I.Act submitted
that the e-mail, addressed with a remark ‘special attention of Mr. Gore’, cannot be treated as demand notice to the petitioner on
dishonour of cheque because Mr. Gore admittedly is an official of
the accused-company, to whom a request e-mail was sent. Mr.
Gore cannot represent the petitioner, who was the Director of the
accused-Company, without any resolution of the Board of
Directors. Learned counsel for the respondent No.1 contended
that the contents of the e-mail does not fulfill the requirement of
demand notice in terms of Section 94 read with Section 138 of
the N.I. Act and so, Advocates notice dated 29.08.2009, sent by
the complainant-respondent No.1, on dishonour of cheque for the
second time to the petitioner and the accused-company was a
valid notice .
23. Section 94 if N.I. Act provides mode in which notice
may be given, which reads as follows:-
“94.Mode in which notice may be given. Notice of
dishonour may be given to a duly authorized agent of the
person to whom it is required to be given, or, where he
has died, to his legal representative, or, where he has
been declared an insolvent, to his assignee ; may be oral
or written; may, if written, be sent by post; and may be
in any form ; but it must inform the party to whom it is
given, either in express terms or by reasonable
intendment, that the instrument has been dishonoured,
and in what way, and that he Will be held liable thereon ;
and it must be given within a reasonable time after
dishonour, at the place of business or (in case such party
has no place of business) at the residence of the party
for whom it is intended .
If the notice is duly directed and sent by post and
miscarries, such miscarriage does not render the notice
invalid.” 24. As a matter of fact, in terms of provision of Section 94
of the N.I.Act, a notice on dishonour of a cheque may be given to
a duly authorized agent of the person to whom it is required to be
given. A demand notice may be given orally or in writing, may if
written, be sent by post and may be in any form, but it must
inform the party to whom it is given either in express terms or by
reasonable intendment that the instrument has been dishonoured
and in what way, he will be held liable thereon, it must be given
within a reasonable time after dishonour, at the place of business
or at the residence of the party for whom it is intended if the
notice is duly directed and sent by post and miscarries, such
miscarriage does not render the notice invalid.
25. The Hon’ble Supreme Court has also culled down the
manner of compliance of the mandatory requirement of section
138 (c ) of the Act and has expanded the arena to that effect by
interpreting the statute as to how a written demand for the
amount of bounced cheque, as available in section 138 of the Act,
is to be construed. The Hon’ble Supreme Court in the case of
M/S. SIL Import, USA V. M/S. Exim Aids Silk Exporters,
Bangalore, reported in 1999 Crl.L.J 2276, has specifically
explained that the statutory interpretation of a particular Act
has to be in accordance with the need to treat it as correct law.
And the Hon’ble Court held that radio gram, fax, e-mail are to be
treated as modes of making demand. Section 94 of the N.I Act
also is in conformity with the said interpretation of the law laid
down by the Hon’ble Supreme Court. 26. Therefore, in the facts and circumstances, e-mail
notice issued by the complainant-respondent No.1 in the e-mail
address of the petitioner, contained all the ingredients of a valid
notice, as per provision of Sec 94 of the N.I.Act,1891. The notice
having all the ingredients of Section 94 of the N.I. Act was
addressed to the petitioner’s email address. Though the name of
Mr. Gore was referred, but apparently Mr. Gore naturally would
not access a mail addressed to the petitioner. The complainantrespondent No.1 cannot be heard to submit that since the notice
addressed to the accused-petitioner was issued drawing attention
of Mr. Gore, it would not be sufficient notice to the petitioner.
Notice obviously was addressed to the accused/petitioner, in his
e-mail id, which naturally would amount to proper service of
notice on the petitioner. Consequently, the e-mail notice
addressed to the petitioner has to be treated as a valid notice in
the facts and circumstances of the case.
27. Learned counsel for the complainant-respondent No.1
in reply to the submission made on behalf of the petitioner further
contended that Section 142 of the N.I.Act has been amended by
the Act 55 of 2002 dated 17.12.2002, by inserting enabling
provision permitting the Court to take cognizance of the complaint
after the prescribed period of limitation , if the complaint satisfied
the court that he had sufficient cause for not making a complaint
within such period and the provision so incorporated in the N.I.Act
stand on a separate footing and thus, cannot be co-related with
the provision of the Limitation Act. Such discretions are exclusively within the domain of the Court and the complainant
and the accused–petitioner would not have a right of hearing
before considering such applications by the Courts for
condonation of delay. Learned counsel for the complainantrespondent No.1 submitted that in the complaint petition it has
been clearly stated that the delay of 4 days occurred in filing the
complaint and for condonation of the said delay a separate
petition supported by an affidavit stating grounds of delay was
filed and the said petition was allowed by the learned Court
below.
28. As discussed above, Annexure-P/1 dated 29.05.2009,
was a demand in terms of section 138 (b) of the Act. The cause of
action for the criminal proceeding arose after expiry of time in
terms of Section 142(b) of the N.I. Act and any further deposition
of the cheque, for collection in any subsequent date cannot give
any fresh cause of action as per the statute and hence the N.I
Case No. 192/09 having been filed without satisfying the court for
the delay of 3 months is a clear express legal bar.
29. To substantiate the grounds for quashing the instant
proceeding, the petitioner’s side relied upon the following
proposition of law propounded by the Hon’ble Supreme Court, in
AIR 1992 SC 604, State of Haryana & Ors. vs. Bhajanlal &
Ors., wherein in paragraph-108, the explanation 1 to 7, the
Hon’ble Supreme Court in no uncertain terms culled out and
indicated grounds for quashing a pending criminal proceeding has
stated as follows :- “1. Where the allegations made in the First
Information Report or the complaint, even if
they are taken at their face value and accepted
in their entirety do not prima-facie constitute
any offence or make out a case against the
accused.
2. Where the allegations in the First Information
Report and other materials, if any,
accompanying the F.I.R. do not disclose a
cognizable offence, justifying an investigation
by police officers Under Section 156(1) of the
Code except under an order of a Magistrate
within the purview of Section 155(2) of the
Code.
3. Where the uncontroverted allegations made
in the FIR or complaint and the evidence
collected in support of the same do not disclose
the commission of any offence and make out a
case against the accused.
4. Where, the allegations in the F.I.R. do not
constitute a cognizable offence but constitute
only a non-cognizable offence, no investigation
is permitted by a police officer without an order
of a Magistrate as contemplated Under Section
155(2) of the Code.
5. Where the allegations made in the FIR or
complaint are so absurd and inherently
improbable on the basis of which no prudent
person can ever reach a just conclusion that
there is sufficient ground for proceeding against
the accused.
6. Where there is an express legal bar engrafted
in any of the provisions of the Code or the
concerned Act (under which a criminal
proceeding is instituted) to the institution and
continuance of the proceedings and/or where
there is a specific provision in the Code or the
concerned Act, providing efficacious redress for
the grievance of the aggrieved party.
7. Where a criminal proceeding is manifestly
attended with mala fide and/or where the
proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the
accused and with a view to spite him due to
private and personal grudge.” 30. To substantiate the argument that the cause of action
has arisen in the present case immediately after receipt of the
mail dated 29th May, 2009 the petitioner relied on the law laid
down by the Hon’ble Supreme Court reported in AIR 1998 SC
3043 in the case of Sadananda Bhadran Vrs. Madhaban Sunil
Kumar. In the said decision the Supreme Court has in
unequivocal terms has culled down that for a particular cheque
the cause of action to file a criminal case arises only once after
completion of the statutory period as stipulated in section 138
read with section 142 of the Act.
31. The aforesaid law laid down by the Hon’ble Supreme
Court is followed in the decision reported as (2005) 4 SCC 417
(Premchand Vijoykumar Vs. Jashpal Singh and others),
2009 AIR SCW 1044, (SL Construction & anr. vs. Alapati
Srinivas Rao and another) and 2010 AIR SCW 828
(Tameswar Baishnab Vs Ram Bishal Gupta). All the previous
decisions were considered by the Hon’ble Supreme Court in the
case reported in 2010 AIR SCW 828. The report of S.L
Construction (supra) is a case where the first notice was
returned without service, the 2nd notice was withdrawn as per the
advice and as such, the Hon’ble Supreme Court agreeing with the
proposition of Sadananda Bhadran Vrs. Madhaban Sunil
Kumar (supra) has held that in view of the fact of this case
since there was no service of notice in terms of section 138 C of
the Act, the 3rd notice was accepted as valid notice which gave
the cause of action. 32. The ratio laid down in Sadananda Bhadran Vrs.
Madhaban Sunil Kumar (supra) reveal that once a notice is
issued, duly received by the payee, immediately thereafter the
cause of action arises and no cause of action would arise after
subsequent deposit/presentation of the cheque, for collection by
the holder of the cheque.
33. In view of the above settled position of law apparently
the N.I case no. 192/2009 had no cause of action alive on the
date of its filing i.e. on 28.10.2009 and as such it is amply clear
that the instant criminal proceeding before the Ld. Lower court is
barred under the express provision of the statute.
34. The Hon’ble Supreme Court in Subodh S. Salaskar
v. Jayprakash M. Shah & Anr., reported in AIR 2008 SC
3086, in paragraph 24, has expressly provided that in absence of
the condonation of the delay caused in filing the complaint under
section 138 of the N.I Act, no Court can take cognizance of the
case. Admittedly in the instant case, no prayer was made by the
complainant-respondent No.1 for condonation of delay, by
reckoning the date of demand notice as 29.05.2009.
35. That in the instant case it is available from the para-
13 of the complaint petition that the complainant has sought for
4(four) days condonation before the Ld. Trial Court and the same
was allowed and thereafter summons was issued to the petitioner.
It is a trite law that any order which has a criminal consequence
has to be passed after hearing the other party. In the present case the delay of 4 days being condoned without hearing the
petitioner is a clear violation of the established provision of law
i.e. the audi alterem partem. This being a manifest illegality the
present proceeding before the Ld. Trial Court has to be quashed.
On this point the following judgments are referred to wherein the
various judicial authorities have clearly mandated that the
discretion to condone delay has to be exercised after giving notice
to the other side and not other ways.
36. While considering the exercising power for extension
of period of limitation under section 473 of the Code of Criminal
Procedure, the Hon’ble Supreme Court in the case of P.K.
Choudhry vrs. Commender, 48 BRTF (GREF), reported in
2008 AIR SCW 2197, taking a reference of the decision render
in State of Maharashtra vrs. Sharadchandra Vinayak
Dongre and others (1994 AIR SCW 4301) has, in paragraphs
9 and 10 of the report, approved the proposition of law that if
delay for launching prosecution is to be condoned the other party
should be given notice and the delay cannot be condoned without
notice and behind their back and without recording any reason for
that.
37. The argument advanced by the learned counsel for
the complainant respondent No.1 that the N.I. Act being a special
statute the Magistrate has the power to ignore the basic rule of
natural justice, cannot have any flavor in view of the fact that the
Supreme Court has approved the said proposition of law, in the
above noted case, while dealing with a case under Army Act. 38. Further the order dated 28.10.2009 and 27.11.2009,
passed by the trial court, would clearly show that no notice
whatsoever was ever given to the petitioner before condonation of
four days delay and there is absolutely no reason assigned by the
Magistrate for the condonation of such delay.
39. Further, it is apparent from the above orders of the
trial court that the cognizance of the case was taken under
section 138 and section 141 of the N.I Act before condoning the
delay of 4(four) days which the Magistrate cannot do in view of
the specific bar under section 142 of the N.I Act. . The law laid
down by the Hon’ble Gauhati High Court reported in 2007
Volume 2 GLT page 895 has clearly settled the legal proposition
on this point and has laid down that the cognizance of the offence
cannot be taken without condoning the delay caused in filing the
complaint.
40. The complainant-respondent admittedly ignored the
1
st demand notice addressed to the petitioner in his e-mail dated
29.05.2009 while calculating the delay in lodging the complaint.
The complainant-respondent by treating the 2nd notice issued by
him as the valid notice, prayed for condonation of delay of 4 days’
in lodging the complaint under Section 138 of the N.I.Act against
the petitioner and the petition for condonation of delay was
allowed without hearing the accused/petitioner, which is
apparently illegal. 41. In Tameeshwar Vaishnav v. Ramvishal Gupta ,
(2010) reported in 2 SCC 329, a complaint was filed against
dishonour of cheque .The complaint proceeded to issue second
notice on the accused , however, no action was taken after
sending first notice under section 138(b) . Question which arose
for consideration before the Hon’ble Supreme Court is - whether
after the notice is already issued once and it is received by the
drawer of the cheque, if the payee or holder of the cheque fails to
take any action as per law within the time period prescribed,
whether a fresh notice can be issued and thereafter proceed to
file a complaint? It was held by the Supreme Court, that a cheque
may be presented several times within the period of its validity,
the cause of action for a complaint under Section 138 arises but
once, with the issuance of notice after dishonour of the cheque
and the receipt thereof by the drawer.
42. In Tameeshwar Vaishnav v. Ramvishal Gupta
(supra), it was observed as follows:
“In support of his said submission, the learned
counsel firstly referred to and relied on the decision
of this Court in Sadanandan Bhadran v. Madhavan
Sunil Kumar, wherein this Court held that the cause
of action to file complaint on non-payment despite
issue of notice, arises but once. Another cause of
action would not arise on repeated dishonour on representation. Learned counsel pointed out that this
Court also held that while the payee was free to
present the cheque repeatedly within its validity
period, once notice had been issued and payments
not received within 15 days of the receipt of the
notice, the payee has to avail the very cause of
action arising thereupon and file the complaint.
Dishonour of the cheque on each re-presentation
does not give rise to a fresh cause of action. Taking
note of the amendment to Section 142(b) of the Act,
this Court also held that the complaint would have to be filed within one month from the day immediately
following the day on which the period of 15 days
from the date of receipt of the first notice by the
drawer expires.
16. On careful scrutiny of the decision in S.L.
Constructions case, it would appear that the facts on
the basis of which the said decision was rendered,
were different from a case of mere presentation and
dishonour of the cheque after issuance of notice
under the proviso to Section 138 of the Act. While
the decision in Sadanandan Bhadran case, clearly
spells out that a cheque may be presented several
times within the period of its validity, the cause of
action for a complaint under Section 138 of the Act
arises but once, with the issuance of notice after
dishonour of the cheque and the receipt thereof by
the drawer. The same view has been reiterated in
Prem Chand Vijay Kumar case. The only
distinguishing feature of the decision in S.L.
Constructions case is that of the three notices
issued, the first two never reached the addressee. It
is only after the third notice was received that the
cause of action arose for filing the complaint. In
effect, the cause of action for filing the complaint in
the said case did not arise with the issuance of the
first two notices since the same were never received
by the addressee.
17. The provisions of Section 138 and clauses (a),
(b) and (c) of the proviso thereto indicate that a
cheque has to be 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. Clause (b) indicates that the payee or the
holder in due course of the cheque, has to make
demand for the payment of the said amount of
money by giving a notice in writing to the drawer of
the cheque within 30 days of the receipt of
information by him from the bank regarding the
return of the cheque as unpaid and clause (c)
provides that if the drawer of the cheque fails to
make the payment of the said amount of money to
the payee or to the holder in due course of the
cheque within 15 days of receipt of the said notice,
the payee or the holder of the cheque may file a
complaint under Section 142 of the Act in the
manner prescribed.
18. In the instant case, it is clear that the first
notices were received by the appellant on 14-6-
2006, whereas the complaints were filed on 10-7-
2006. It must, therefore, be held that the complaints
were filed beyond the period of limitation and the
learned Magistrate erred in taking cognizance on the
complaints filed on the basis of the second notices
issued on 7-6-2006. Similarly, the High Court was also wrong in affirming the order of the learned
Magistrate.”
43. The proposition of law enunciated by the Hon’ble
Supreme Court clearly revealed that there can be multiple
presentation of cheque for encashment in the Bank but there
cannot be multiple demands for the same cheque amount.
44. In the instant case, cause of action is clearly based on
dates of receipt of first notices and the complaint was obviously
filed beyond the period of limitation and the learned Magistrate
erred in taking cognizance on the complaints filed on the basis of
the second notices.
45. Because of what have been discussed and pointed out
above, this Criminal Petition succeeds. The order, dated
27.11.2009, taking cognizance of offence under section 138 of
N.I. Act in N.I Case No. 192/09, against the present petitioners is
hereby set aside and the whole proceeding is hereby quashed.
46. With the above observations and directions, this
Criminal Petition shall stand disposed of.
47. No order as to cost.
48. Send back the LCR.
JUDGE
asim
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