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1998 DIGILAW 147 (MP)

KU. PREMLATA CHADDHA v. SURENDRA KUMAR SONI

1998-02-19

S.P.KHARE

body1998
S. P. KHARE, J. ( 1 ) THIS order will also govern the disposal of Criminal Appeal No. 1964 of 1997. This appeal has been filed by the complainant against judgment dated 17-7-1995 in Criminal Case No. 844 of 1995 passed by Shri Sanjay Shukla, Judicial Magistrate First Class, Jabalpur by which the complaint has been held to be barred by limitation as provided in Section 142 (b) of the Negotiable Instruments Act, 1881 (hereinafter to be referred to as the Act ). ( 2 ) THE facts relevant for decision of the point in issue as stated in the complaint are that accused Surendra Kumar Soni issued a cheque dated 1-4-1993 for Rs. 27087/- in favour of the complainant. It was drawn on the State Bank of India, Kamla Nehru Branch, Jabalpur. It was presented by the complainant for payment but it was dishonoured vide memo dated 6-4-1993 for want of sufficient funds. The complainant sent the notice dated 10-4-1993 to the accused to pay the amount of the cheque. This notice was received by the accused. He requested the complainant to represent the cheque to the bank for payment. It was represented but it was again dishonoured for the same reason on 13-8-1993. The complainant again sent the notice dated 16-8-1993 to the accused calling upon him to pay the amount of the cheque within 15 days of the receipt of the notice. It was duly served upon the accused. He failed to make payment of the amount and, therefore, the complaint under Section 138 of the Act was filed on 9-9-1993. ( 3 ) THE trial Magistrate held that the complaint is barred by limitation under Section 142 (b) of the Act as it was not filed within one month of the date on which the cause of action arose. In the opinion of the learned Magistrate the cause of action arose when the payment was not made by the accused within 15 days of the receipt of the first notice dated 10-4-1993 and there could not be fresh accrual of the cause of action on the second presentation of the cheque, its dishonour and the second notice. ( 4 ) THE question of law that falls for consideration in these appeals is whether cause of action for making complaint can arise on the basis of successive bouncing of the cheque ? ( 4 ) THE question of law that falls for consideration in these appeals is whether cause of action for making complaint can arise on the basis of successive bouncing of the cheque ? ( 5 ) SECTION 138 of the Act introduced by an amendment in the year 1989 creates a new offence, when a cheque is returned by the bank unpaid either because of the amount of money standing to the credit of the account of the drawer is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from the account of the drawer. The other ingredients of the offence as laid down in the proviso are : (A) the cheque must 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, (B) the payee must make a demand for payment of the amount of the cheque by giving a notice to the drawer of the cheque within fifteen days after the cheque is returned, and (C) the drawer must have failed to pay the amount demanded within fifteen days of the receipt of the notice. There is a further requirement of Section 142 (b) of the Act that the complaint must be made within one month of the date of the expiry of the period of fifteen days of failure to make the payment of the cheque by the drawer. ( 6 ) A cheque can be presented for payment any number of times until it has become stale. If it is dishonoured for a second or subsequent time the payee may serve a demand notice again on the drawer as required by law for payment of the amount of the cheque and on his failure to do so may file a complaint within one month of the fresh cause of action. There is no provision precluding the payee from doing so. Even if he does not take steps to file complaint when the cheque is dishonoured for the first time he can do so subsequently as a second inning after complying with the procedural requirements within the stipulated time. Successive causes of action can arise on repeated presentation and dishonour of the cheque. It cannot be said that more than one cause of action on the same cheque is not contemplated. Successive causes of action can arise on repeated presentation and dishonour of the cheque. It cannot be said that more than one cause of action on the same cheque is not contemplated. Such a construction would neither suppress the mischief nor advance the remedy. That would be against the plain meaning of the statutory provision. ( 7 ) THE trial Magistrate relied upon the two decisions of Kerala High Court in Chellakkannu Nadar v. Sri Chenkal, 1994 Cri LJ 3515 and Kumaresan v. Ameerappa, (1992) 1 Crimes 23 , but these have been overruled by the Full Bench of that High Court in S. K. D. L. Fireworks Industries v. K. V. Sivarama Krishnan, 1995 Cri LJ 1384 (FB ). The Full Bench has held that there is nothing in the provisions in Chapter XVII of the Act which will preclude the creation of successive causes of action on the basis of one and the same cheque. Section 142 (b) only prescribes a period of limitation for filing complaint with reference to a cause of action already accrued. The effect of the provision is only to bar a complaint filed on the basis of a cause of action which arose one month prior to the date of filing of the complaint. It cannot be construed as a provision barring the payee or holder in due course from taking necessary actions to complete a fresh cause of action in accordance with law so long as the cheque remains unpaid and filing a complaint on the basis of the fresh cause of action so created notwithstanding the bar against filing a complaint on the basis of the earlier cause of action. Successive causes of action may arise on the basis of one and the same cheque for filing complaint under Section 142 subject to the restrictions contained in Sections 138 and 142 of the Act. Deferment of prosecution or even omission to prosecute the offender at the earliest opportunity and availing a cause of action which accrues to him subsequently may not in any way be considered as an act prejudicial to the interest of the drawer or an act intended to harass or embarrass the drawer of the cheque. If at all, such an act can only be considered as an action advantageous to the drawer who is not in a position to pay. If at all, such an act can only be considered as an action advantageous to the drawer who is not in a position to pay. Repeated presentation and creation of fresh causes of action cannot also be considered as an action intended to embarrass or harass the drawer as he can at any time pay and avoid the threat of prosecution effectively if he chooses to do so. I am in respectful agreement with the Full Bench decision. ( 8 ) THE Karnataka High Court has recently taken the same view in G. Ekantappa v. State of Karnataka, 1997 Cri LJ 1274. It has summarised the legal position thus :"the mere issuance of cheque or its bouncing for insufficiency of funds does not constitute an offence under Section 138 of the Act. An offence is constituted only after a notice of demand under Section 138 (b) is served on the drawee and on his failure to make payment within fifteen days. Once there is failure, offence continues till the amount remains unpaid. Section 142 only imposes certain restrictions in taking cognizance of the offence and nothing more. Therefore, an offence under Sections 138 of the Negotiable Instruments Act is in the nature of continuing offence and as such complaint based on second or subsequent dishonour of the cheque is certainly maintainable in law, notwithstanding the fact that the drawee does not avail the opportunity and files the complaint after its first dishonour and thereafter notice under Section 138 (b) of the Act being served on the drawer of the cheque". ( 9 ) THE approach of the Rajasthan High Court is the same in Lallu Lal Agarwal v. Damodar Prasad Gupta, 1997 Cri LJ 1545, when it holds that the right of the holder of the cheque to prosecute the drawer may be exercised even after second or third refusal. The other decisions need not be cited as they have been referred to in the Full Bench decision of Kerala High Court (supra ). ( 10 ) IN the result this appeal is allowed. The impugned judgment is set aside and the case is remanded to the trial Magistrate for fresh decision on merits on the basis of the evidence already adduced by both the sides. Appeal allowed. .