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2002 DIGILAW 194 (JK)

Subhash Chander v. Pritam Singh Machinewala

2002-06-06

S.K.GUPTA

body2002
This appeal is directed against the order dated 20-2-2001 propounded by Chief Judicial Magistrate, Udhampur in File No. 7 of 1997. By the aforesaid order, the Trial Court acquitted the accused for offence under S. 138. Negotiable Instruments Act (hereinafter referred to as "the Act") on the ground that requirement of Clause (c) of the proviso to S. 138 of the Act has not been fulfilled. Facts relevant for the disposal of this appeal summarily may be recited. Appellant Subhash Chander engaged in the business of poultry feed filed a complaint in the Court of CJM, Udhampur in alleging that he had supplied the poultry feed to Pritam Singh accused respondent and an amount of Rs. 36,602/- was outstanding against him. The accused, when approached by the Complainant, issued a Cheque No. 659782 for the amount outstanding against him to be drawn on State Bank of India Branch, Garhi, in discharge of his liability, on 15-5-1997. The cheque was dishonoured, when presented in the Bank by Complainant and returned with a memo of "Insufficient Fund", on 20-5-1997 under Clause (b) of the proviso to S. 138 of the Act, after the dishonour of the cheque, the payee or the holder in due course made a demand for payment by issuing notice dated 3-6-1997 in writing to the drawer of the cheque on the return of the cheque as unpaid. It is also stated in the complaint that no payment was made after service of notice on the drawer of the cheque within the stipulated period and thus accrued a cause of action under Clause (c) proviso to S. 138 of the Act, hence complaint. The Trial Court took cognizance of the complaint made under S. 142(b) of the Act and after recording evidence and hearing the parties, dismissed, the complaint in taking a view that there, is nothing on record to show as to when the notice of demand was served on the drawer and that the cause of action arises only on failure to make the payment within 15 days of the receipt of notice as is contemplated by Clause (c) of proviso to S. 138 of the Act, which became the subject matter of challenge in this appeal. I have heard the learned counsel for the parties and also perused the record meticulously. I have heard the learned counsel for the parties and also perused the record meticulously. The spinal question raised before the Trial Court and also reiterated in this appeal that falls for determination is whether the date of receipt of notice of demand is of vital significance as the cause of action accrues to the holder in due course only in case of non-payment within fifteen days, as contemplated by Clause (c) of the proviso to S. 138 to maintain the complaint envisaged under S. 142(b) of the Act. It is advantageous to point out that the offence under S. 138 of the Act can be completed only with the concatenation of number of acts. The following are the acts which are components of the said offence : (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice ............... But a concatenation of all the above five is a sine qua non for the completion of the of offence under S. 138 of the Code (Paras 14 and 15). The object of issuing notice indicating the factum of dishonour of the cheque is to give an opportunity to the drawer to make the payment within fifteen days, so that it will not be necessary for the payee to initiate any criminal action even though the Bank dishonoured the cheque. The Supreme Court in Jagdish Chand Gupta v. Sandeep Arora, (1999) 9 SCC 192, held that a S. 142(b) provides that complaint should be made within one month from the date on which the cause of action arises under S. 138 proviso (c), and such cause arises 15 days after receipt by drawer of written demand notice for payment by payee. So understood, it is unambiguously clear that the complaint, should contain allegation of the ingredients of the offence. In the matter of taking cognizance on receiving a complaint, S. 142 of the Act enjoins the conditions for taking cognizance of the offence punishable under S. 138 of the Act. So understood, it is unambiguously clear that the complaint, should contain allegation of the ingredients of the offence. In the matter of taking cognizance on receiving a complaint, S. 142 of the Act enjoins the conditions for taking cognizance of the offence punishable under S. 138 of the Act. It is apt to point out that the complainant has to make out that the drawer has failed to make the payment within fifteen days of the receipt of notice of demand by the holder in due course of the cheque. So under S. 138. proviso Clause (c), service of notice of demand, is a condition precedent for filing a complaint under S. 138. It is not possible to compute a period of fifteen days unless date of receipt of notice is made out for accrual of cause of action. In the present case, the cheque was dishonoured on 20-5-1997. A notice of demand for payment, in writing, after dishonour of the cheque was given on 3-6-1997. It is neither borne out from the complaint nor the evidence adduced as to when the notice of demand given by the complainant, was received by the accused as was necessitated by Clause (c) of proviso to S. 138 for launching prosecution against the accused. One of the indispensable factors of prosecution under the section is that, complaint must be made within one month of the date on which the cause of action arises under Clause (c) of proviso to S. 138. The date of cause of action under the said Clause of the proviso is the date of expiry of 15 days of the receipt of the notice under Clause (b) of the proviso. So real cause of action giving rise a right of prosecution arises from the date of the failure of the drawer of cheque to make payment to the payee. This is how the date of receipt of notice assumes significance for prosecution under S. 138 of the Act for giving rise to cause of action. There is no error, legal or factual, found in the order impugned passed by the Trial Court inviting interference in appeal. The provisos to S. 138 of the Act proscribed a mandatory procedure. This is how the date of receipt of notice assumes significance for prosecution under S. 138 of the Act for giving rise to cause of action. There is no error, legal or factual, found in the order impugned passed by the Trial Court inviting interference in appeal. The provisos to S. 138 of the Act proscribed a mandatory procedure. Provisos stipulate that all three following conditions laid down vide (a) (b) and (c) must be complied with, so that payee or the holder in due course can file a complaint against the drawer. So far as the question of accruing the cause of action is concerned, it would arise on the failure to pay after notice under Clause (c) of the proviso to S, 138 of the Act. The language employed in S. 138(c), namely, "receipt of the said notice" unambiguously points to actual receipt of notice. In the absence of a proof of the service of the notice of demand as, required under this Section, the prosecution of the drawer is not permissible. The general burden to prove the prosecution case rests with the complaint. It is necessary for the complainant to prove the facts constituting the sending of notice and its receipt. Notice should not be deemed to have been served as a matter of course. Although in appropriate case, deemed service is accepted by the Court, but such presumption or deemed service is not a matter of course in all cases. Deemed service is to be accepted in the facts of each case. The cause of action is discernible for filing a complaint under the Act from the date of receipt of the notice which, in the present case, is not neither indicated in the complaint nor is made out and gatherable from the evidence on record, which shows that there was no service of notice and complaint under S. 138 cannot be maintained. Having regard to the facts and circumstances of the case discussed above, this acquittal appeal, in my view, is devoid of any merit and accordingly dismissed. Record shall be remitted back to the Trial Court forthwith. Appeal dismissed.