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2006 DIGILAW 331 (KER)

Bank of Baroda, Fort Branch v. Philip Thomas

2006-06-15

K.A.ABDUL GAFOOR

body2006
Judgment :- The appellant did not succeed in the prosecution launched against the respondent alleging offence punishable under Section 138 of the Negotiable Instruments Act. The respondent/accused was acquitted. Therefore, this appeal. The appellant is a bank offering facility of credit card. The respondent availed that facility. The accused availed the credit facility to the tune of Rs.1,38,598/-. In part repayment there of, he issued Ext.P2 cheque dated 23.6.97 for an amount of Rs.1,27,000/-. This was presented for encashment on 17.10.97. It bounced for want of sufficient amount in the account maintained by him. The appellant represented the cheque again on 3.11.1997. Then also the same story repeated. There upon appellant issued a notice Ext.P4, on 10.11.97. It was duly acknowledged by the accused as is revealed by one amount the documents produced as Ext.P4 series. It was not responded either in the form of reply or repayment. This resulted in the complaint. 2. Answering the point on the maintainability of the complaint on the basis of the evidence deposed through PW1 in negative, as being time barred, reckoning the limitation period from the date of information given to the accused about the dischonour of the cheque drawn by him, immediately after its first presentation on 17.10.1997, the accused was acquitted. 3. Assailing this acquittal, it is contended by the counsel for the appellant that the cause of action for the case had arisen so far as the appellant is concerned only when no payment was made by the accused in spite of the receipt of notice issued by him. It is true that the evidence given by Pw1, the Manager of the Bank reveals that immediately after bouncing of the cheque on the first presentation on 17.10.97, an information in that regard had been passed over to the accused. This information was brought out during cross-examination of PW1. In the chief examination PW1 had deposed that on dishonour on the first occasion, as debit advice was given to the accused. It is contended by the counsel that this does not form a statutory demand in terms of clause (b) of proviso to Section 138 to give rise to a cause of action, depending upon information so furnished. It was only a written communication in the usual way of business of the bankers, the appellant being a banker. It is contended by the counsel that this does not form a statutory demand in terms of clause (b) of proviso to Section 138 to give rise to a cause of action, depending upon information so furnished. It was only a written communication in the usual way of business of the bankers, the appellant being a banker. In this regard the decisions reported in M/s. Uniplas India Ltd. V. State of NCT of Delhi (AIR 2001 SC 2625) and M/s. Dalmia cement Ltd. V. M/s. Galaxy Traders and Agencies Ltd. (AIR 2001 SC 676) are heavily relied on. Referring to the decision reported in Sadanandan Bhadran V. Madhavan Sunil Kumar (1998 (2) KLT 765), it is submitted by the counsel that the facts there are distinguishable, as there was no demand in the debit memo sent to the accused in this case following the first dishonour on 17.10.1997. Therefore, as the demand for repayment of the amount covered by the cheque in question, in terms of clause (b) of proviso to Section 138 was made by the appellant only after the second presentation on 3.11.1997, the cause of action had arisen in this case with reference to the second presentation and issuance of notice there upon and its acknowledgment by the accused. The filing of the complaint on 24.12.1997 is therefore within the time limits. The court below fell in error in reckoning the debit information given to the accused as the point around which the cause of action had arisen, it is submitted. 4. It is the contention of the accused that, by communicating the debit memo immediately after the 1st presentation of the cheque, the complainant was briinging to his notice that the cheque had bounced for want of fund. The limitation in terms of section 142 has to be reckoned based on it. Therefore the prosecution was time barred. Section 142 of the Negotiable Instruments Act provides that no court shall take cognizance of an offence punishable under Section 138 unless complaint is made within one month from the date on which the cause of action arises under clause (C) of the proviso to Section 138. Therefore the prosecution was time barred. Section 142 of the Negotiable Instruments Act provides that no court shall take cognizance of an offence punishable under Section 138 unless complaint is made within one month from the date on which the cause of action arises under clause (C) of the proviso to Section 138. Clause (C) of the proviso to Section 138 stipulates that, that section shall not apply not apply unless; “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.” The notice mentioned is one provided in clause (b) of the proviso to Section 138, which is as follows; “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;” Therefore the cause of action arises, depending upon the date of receipt of demand for payment of the amount covered by the cheque by giving a notice in writing to the drawer. A mere intimation that the cheque has been dischonoured for wand of sufficient fund will not be a notice making a demand for payment of the amount. Going by the evidence on record, what PW1 had deposed during his chief examination was that “ Malayalam” …. (A debit advise was given to the accused with reference to the first dishonour). The first dishonour was on 17.10.1997. When cross examined, what was brought in by the accused from PW2 was as follows: “ Malayalam” (It was presented on 17.10.1997. The accused was informed of the fact that the cheque bounced for the reason funds insufficient). Unfortunately, the accused did not proceed further to elicit whether such information contained any demand for payment of the amount covered by the bounced cheque. Then alone the statutory requirement will be completed. The accused was informed of the fact that the cheque bounced for the reason funds insufficient). Unfortunately, the accused did not proceed further to elicit whether such information contained any demand for payment of the amount covered by the bounced cheque. Then alone the statutory requirement will be completed. A mere information about the bouncing of the cheque alone is not sufficient to give rise to a cause of action on the basis of the provisions contained in Section 142 read with clauses (b) & (C) of proviso to Section 138 of the Act. Demand for payment of the amount covered by the bounced cheque in the form of a notice in writing is an inseparable constituent of a cause of action and that demand should have reached the accused. The accused did not have a case before me that the said information in the form of debit slip given to him did contain any demand for payment of the cheque amount. No such suggestion has been given to PW1 nor the said document had been produced by the accused. The evidence on record thus is not sufficient to hold that the debit slip contained a demand for payment of the amount covered by the cheque in question Ext.P2. That demand was made by the appellant only by issuing Ext.P4 notice, after the second presentation on 3.11.97. The accused does not have a case that filing of the complaint in the court below was beyond the time limit, reckoned with reference to the second presentation and the receipt of the notice issued subsequent to such second presentation. 6. In Sadanadan Bhadran v. Madhavan Sunil Kumar (1998 (2) KLT 765) it has been made clear by the apex court that; “If we were to proceed 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 then it is significant to note that clause (b) S.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. The reasons behind giving such a restrictive meaning is not fair to seek. The reasons behind giving such a restrictive meaning is not fair to seek. Consequent upon the failure of the drawer to pay the money within the period of 15 days as envisaged under clause (c) of the proviso to S.138, the liability of the drawer for being prosecuted for the offence he has committed arises, and the period of one month for filing the complaint under S.142 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 S.142(c) arises-and can arise-only once.” The notice mentioned in this passage is the notice contemplated under clause (b) of the proviso to Section 138. This has to be issued on the drawer demanding payment of the amount covered by the cheque. Of course, one cannot renew the cause of action by issuing successive notices one after another on each presentation. In this case the intimation said to be given by the appellant to the accused immediately after the first presentation on 17.10.97 was not shown to contain a demand for payment of the amount covered by the cheque. Therefore, it cannot be taken as a notice contemplated in clause (b) of the proviso to Section 138. So the cause of action in this case had arisen for the 1st time only with reference to the receipt of the notice issued to the accused after the 2nd presentation and not with reference to the alleged debit slip issued after the 1st presentation of the cheque. 7. The facts in M/s. Dalmia Cement Ltd. v. M/s. Galaxy Traders Ltd. (2001 (6) SCC 463) reveals that though the complainant has issued two notices, the first one, according to the drawer of the cheque, did not contain any contents in the cover and that it was there upon the complainant presented the cheque once again and issued a notice within the time frame provided under Section 138. That means there was no demand in the first notice. The facts in this case are almost similar to that case with the exception that the intimation given immediately after the first presentation on 17.10.97 reached the accused. But going by the evidence of PW1, it did not contain any demand for payment of the amount. That means there was no demand in the first notice. The facts in this case are almost similar to that case with the exception that the intimation given immediately after the first presentation on 17.10.97 reached the accused. But going by the evidence of PW1, it did not contain any demand for payment of the amount. The accused also did not produce the said intimation to prove that it contained any demand. Therefore, this factual difference is of no consequence. 8. The Supreme Court in Uniplas India Ltd. And Ors. V. State and Ors. (2001 (6) SCC 8) held that one of the factors to form cause of action is contained in clause (b) of the proviso to section 138, which involves the making of a demand by giving a notice in writing to the drawer of the cheque within 15 days of the receipt of the information by him from the bank regarding the return of the cheque. If no such notice is given within the said period of 15 days, no cause of action could have been created at all. 9. As already discussed above, the intimation given to the respondent immediately after presentation did not contain any demand for making payment. There is no evidence on record in that regard. The accused also did not as already mentioned above produce that document. No such material had been brought out in cross-examination of PW1 as to whether the intimation contained any demand. So it was not a statutory notice. In such circumstances it cannot be found that the cause of action in the case had arisen based on furnishing such information about the dishonour without containing a demand, immediately after the first presentation. Therefore the cause of action in this case had arisen with reference to the date of receipt of Ext.P4 notice containing demand. 10. The impugned judgment appreciating the facts pleaded and brought out in evidence reveals that all the ingredients for the offence under Section 138 had been proved in this case, through the evidence of PW1 and the documents Exts. P1 to P4 series. Ext.P1 details regarding the ledger of the bank account of the accused conclusively proved that the cheque bounced for want of sufficient fund. There was notice, Ext.P4, which had been duly acknowledged by the accused. That notice contained the demand for payment of the amount. It was not acceded to. P1 to P4 series. Ext.P1 details regarding the ledger of the bank account of the accused conclusively proved that the cheque bounced for want of sufficient fund. There was notice, Ext.P4, which had been duly acknowledged by the accused. That notice contained the demand for payment of the amount. It was not acceded to. The notice complaint has been file in time with reference to the date of receipt of that notice. 11. Accordingly the appeal is allowed; acquittal is set aside and the first respondent/accused is found guilty of the offence punishable under Section 138 of the N.I. Act and he is convicted and sentenced as under. 12. The respondent shall undergo imprisonment for a day until the rising of the court on 11.9.06, when he shall appear before the court below, and shall also pay a compensation of Rs.1,38,598/-, in default of which, he shall undergo simple imprisonment for six months. The compensation if collected shall be paid to the appellant/complainant. Appeal is allowed as above.