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2004 DIGILAW 418 (RAJ)

Ajudiya Sugar Mills v. Alcobex Metals Ltd.

2004-03-17

N.N.MATHUR

body2004
Honble MATHUR, J.–All these four petitions under Section 482 of the Code of Criminal Procedure arise from the order dated 19.10.2002 passed by the Judicial Magistrate No. 4, Jodhpur rejecting the petitioners application for dropping the proceedings against them for offence under Section 138 of the Negotiable Instruments Act. (2). The relevant facts giving rise to the instant petitions are that the respondent namely M/s Alcobex Metals Ltd. Supplied goods to the petitions company namely M/s Ajudiya Sugar Mills for which he gave seven different cheques of Rs. one Lac each of various dates. The cheques were presented before the Vijya Bank, Branch New Delhi. But the same were returned to the complainant with the endorsement that the same could not be honoured because of the insufficiency of the funds. It is averred that the complainant served notice on the petitioners. According to the complainant the second petitioner namely Dharmendra Jain contacted the Head Office of the complainants company at Jodhpur and assured that since there is some financial crunch with the company, hence payment could not be made and, therefore, a request was made that the cheque may again be presented before the Bank. The complainant again presented the cheques before the Bank, which was again dishonoured. After statutory notice being served, the complaint was filed. The learned Magistrate has taken cognizance against the petitioners for offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act). It was contended before the learned Magistrate that it had no jurisdiction to take cognizance of the offence after the expiry of 30 days from the date of cause of action i.e. within 30 days, on expiry of 15 days from the date of receipt of the first statutory notice as there could not be more than one cause of action in respect of single cheque. The learned Magistrate rejected the contention by the impugned order. (3). Thus, the core question which arises for consideration is:- ``Whether the payee or holder of the cheque can initiate prosecution for an offence made under Section 138 of the Act for its dishonour for the second time, if he had not initiated such presentation on the earlier cause of action? The relevant dates in all the four petitions which have bearing on the controversy are given in a tabular form as follows: PETITION NO. COMPLAINT NO. The relevant dates in all the four petitions which have bearing on the controversy are given in a tabular form as follows: PETITION NO. COMPLAINT NO. FIRST DISHONOUR FIRST NOTICE WHICH WAS RECEIVED SECOND DISHONOUR 2ND NOTICE COMPLAINT 856/02 8990/2000 22-10-99 22-11-99 03-11-99 13-01-00 17-01-00 02-03-00 857/2002 8935/2000 18-10-99 03-11-99 07-01-00 15-01-00 06-03-00 858/2002 8983/2000 20-10-99 03-11-99 10-01-00 15-01-00 06-03-00 859/2002 8953/2000 21-10-99 03-11-99 11-01-00 15-01-00 06-03-00 (4). For the convenience I shall take up Cr. Misc. Petition No. 856/2002. The said case pertains to Complaint No. 8990/2000, wherein the cheque was dishonoured on 22.10.1999. The statutory notice given by the respondent complainant was served on the accused petitioners on 3.11.99. Thus, the cause of action arose on the expiry of 15 days when the payment was not made inspite of demand i.e. On 18.11.99. The complaint was required to be filed within 30 days i.e. Before 18.12.99. Thus, according the accused petitioners the complaint is time barred having been filed on 6.3.2000. However, the case of the complainant is that on the request of the accused party instead of launching prosecution the complainant company again presented the cheque which was dishonoured on 13.1.2000. Thus, a second statutory notice was given which was served on 17.1.2000. The accused petitioner was required to make payment within a period of 15 days. Thus, the cause of action arose on expiry of 15 days when the payment was not made i.e. On 2.02.2000 instead of 18.11.99. The complaint could be filed within 30 days from the 2.2.2000. The complaint was in fact filed on 2.03.2000. Thus, it cannot be said that the learned Magistrate had no jurisdiction to entertain the complaint. (5). In order to appreciate the controversy, it would be apt to read Section 138 and 142 of the Act, which reads as follows:- ``138. The complaint could be filed within 30 days from the 2.2.2000. The complaint was in fact filed on 2.03.2000. Thus, it cannot be said that the learned Magistrate had no jurisdiction to entertain the complaint. (5). In order to appreciate the controversy, it would be apt to read Section 138 and 142 of the Act, which reads as follows:- ``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 extend to one year, 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 fifteen 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 ``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; (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. (6). To invoke the provisions of Section 138 of the Act the payee or the holder in due course in presenting the cheque for payment to the Bank within a period of six months from the date on which it was drawn or within the period of validity, whichever is earlier as enjoined by Clause (a) of Section 138 of the Act. There is no limitation on the number of times a cheque can be presented to the Bank. Mere dishonouring of a cheque simplicitor does not constitute an offence under Section 138 of the Act. It constitutes an offence only when cause of action arises when inspite of a notice as contemplated under sub-clause (b) is given to the drawer of the cheque and as provided under Sub-clause (c) if he fails to make payment of the said amount within 15 days of its receipt. A notice envisages affording of opportunity to the payee to make the payment, with the intention that in case the payment was not made criminal prosecution was to ensue. The payee or endorsee of the cheque has, therefore, liberty to present the cheque as many times as he likes within the period of six months. Once he serves a notice upon the drawer the cause of action shall deem to have commenced and the period of limitation starts to run. It is well established position of law that once the period of limitation starts to run it cannot stop for any reason. Once he serves a notice upon the drawer the cause of action shall deem to have commenced and the period of limitation starts to run. It is well established position of law that once the period of limitation starts to run it cannot stop for any reason. Section 142 of the Act forbids a Magistrate from taking cognizance of an offence under Section 138 of the Act except on a complaint in writing made by the payee within one month of the date from which the cause of action arises under sub-clause (c) of the proviso to Section 138 i.e. none payment of the amount of cheque within 15 days from the date of receipt of the notice. The language of Section 138 and 142 clearly postulates only one cause of action. A payee who fails to file his complaint in writing thereby forfeits his right to prosecute the drawer. He cannot circumvent the limitative clause by giving successive notices as combined reading of both sections of the Act leaves no room of doubt that cause of action under Section 142(c) arises and can arise only once. The controversy has been concluded by the Apex Court in Sadanandan Bhadran vs. Madhavan Sunil Kumar (1). It is held therein that on the harmonious construction of the provisions on each presentation of cheque and its dishonour, a fresh right and not cause of action accrues in favour of the pay. He may, therefore, without taking premature action in exercise of such right under Sub-clause (b) of Section 138 of the Act can 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. But once he gives a notice under Sub-clause (b) of Section 138 he forfeits such right. In case of failure of the drawer to pay the money within the stipulated period, he would be liable for the offence and the cause of action for filing the complaint will not arise. The Apex Court found that the complaint was rightly dismissed as the complainant had earlier taken recourse of Clause (b) of Section 138 but did not avail the cause of action that arose in his favour under Section 142(b) of the Act. The Apex Court found that the complaint was rightly dismissed as the complainant had earlier taken recourse of Clause (b) of Section 138 but did not avail the cause of action that arose in his favour under Section 142(b) of the Act. The said decision has been followed by the Apex Court in another case Sil Import USA (M/s) vs. M/s Exim Aides Silk Exporters, Banglore (2). Thus, the Magistrate in view of Section 142 of the Act is forbidden from taking cognizance of an offence if the complaint was not filed within one month on which the first cause of action arose. (7). In the instant case in all the four cases the cheques were dishonoured on 22.10.99, 18.10.99, 20.10.99 and 21.11.99 respectively. The notices in each cases were received on 3.11.99. The drawer failed to make the payment. As such the cause of action arise under sub-clause (c) on expiry of 15 days i.e. On 19.11.99. The limitation of 30 days start running from 19.11.1999 for prosecution by way of filing a complaint in writing as provided under section 142 (a) & (b), which expired on 18.12.99. The complainant did not file the complaint and resubmitted the cheque to the Bank which was dishonoured on 13.1.2000, 7.1.2000, 10.1.2000 and 11.1.2000. The second notices were given on 15.1.2000 and 17.1.2000. In our view the limitation for filing the complaint in all the four cases expired on 18.12.99. By giving a second notice the limitation could not be revived. Admittedly, in all the cases the complaint has been filed on 6.03.2000. In view of the provisions of Section 142 of the Act, the court was forbidden from taking cognizance of offence under Section 138 as the complaint was not filed within one month on which the first cause of action arose. (8). Consequently, all the Misc. Petitions are allowed. The impugned order dated 9.10.2002 in each of the petition is quashed and set aside. The proceedings against the petitioners pending in the trial court for offence under Section 138 of the Negotiable Instruments Act stand quashed.