Research › Search › Judgment

Madras High Court · body

2015 DIGILAW 2956 (MAD)

Nowshad Ali v. Panneer Selvam

2015-09-02

R.MALA

body2015
Order The petitioner has come forward with this application to quash the proceedings in S.T.C.No.88 of 2006 on the file of the 1st Additional District Munsif cum Judicial Magistrate, Kumbakonam. 2. The learned counsel for the petitioner would submit that the respondent has preferred a complaint for an offence punishable under Section 138 of the Negotiable Instrument Act stating that the petitioner/accused herein has issued two cheques dated 25.08.2003 for a sum of Rs.25,000/- and Rs.50,000/- for discharging the legally subsisting liability and when it was presented for encashment, the same was returned on 12.09.2003 as insufficient funds and hence, he issued a legal notice on 12.10.2013. Thereafter, he presented the cheques again on 24.11.2013 and the same was dishonoured on 28.11.2013 and subsequently, he issued statutory notice on 20.12.2013 and thereafter, preferred the complaint under Section 138 of the Negotiable Instrument Act. 3. The learned counsel for the petitioner would further submit that as soon as the notice has been issued on 12.10.2013, the cause of action has been arisen and hence, he ought to have filed the complaint within one month from the date of receipt of notice, whereas, the respondent filed the complaint belatedly and hence, the complaint is barred. For the said reason, he relied on the decision in Sadanandan Bhadran Vs. Madhavan Sunil Kumar reported in 1998 Supreme Court Cases (Cri) 1471 and hence, he prayed for quashing of the proceedings under Section 138 of the Negotiable Instrument Act. 4. Even though the respondent was served and his name was printed in the cause list, no one is represented on behalf of the respondent. 5. I have considered the submissions made by the learned counsel for the petitioner and perused the materials available on records. 6. Perusal of the complaint itself, it is specifically mentioned that the petitioner herein has borrowed a sum of Rs.75,000/- for his business on 20.07.2003. For discharging the same, the petitioner issued two cheques dated 25.08.2003 for a sum of Rs.25,000/- and Rs.50,000/- respectively. When it was presented for encashment on 25.08.2003, the same was returned as insufficient funds on 12.09.2003. Then, he issued notice on 12.10.2003 and the petitioner received the notice on 23.10.2003. The petitioner has filed the copy of notice dated 12.10.2003. For discharging the same, the petitioner issued two cheques dated 25.08.2003 for a sum of Rs.25,000/- and Rs.50,000/- respectively. When it was presented for encashment on 25.08.2003, the same was returned as insufficient funds on 12.09.2003. Then, he issued notice on 12.10.2003 and the petitioner received the notice on 23.10.2003. The petitioner has filed the copy of notice dated 12.10.2003. Again, the cheques were represented on 245.11.2003 and the same were returned on 28.11.2003 as insufficient funds and hence, after issuing statutory notice, the complaint has been preferred. 7. It is appropriate to incorporate Section 138 of the Negotiable Instrument Act, which reads thus:- “138.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 extent 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. 8. 8. It is appropriate to consider the decision relied on by the learned counsel for the petitioner in Sadanandan Bhadran Vs. Madhavan Sunil Kumar reported in 1998 Supreme Court Cases (Cri) 1471, wherein, the Apex Court has held in paragraph Nos.5 to 7 as follows:- “5.The next question that falls for our determination is whether dishonour of the cheque on each occasion of its presentation gives rise to a fresh cause of action within the meaning of Section 142(a) of the Act, Section 142 reads as under:- “142. 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 © 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.” From a plain reading of the above section, it is manifest that a competent court can take cognizance of a written complaint of an offence under Section 138 if it is made within one month of the date on which the cause of action arises under clause © of the proviso to Section 138. (emphasis supplied) 6. In a generic and wide sense (as in Section 20 of the Civil Procedure Code, 1908) '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. 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) 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. The reason behind giving such a restrictive meaning is not far 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 Section 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 Section 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 Section 142(c) arises-and can arise only once. 7. Besides the language of Sections 138 and 142 which clearly postulates only one cause of action there are other formidable impediments which negates the concept of successive causes of action. One of them is that for dishonour of one cheque there can be only one offence and such offence is committed by the drawer immediately on his failure to make the payment within fifteen days of the receipt of the notice served in accordance with Clause (b) of the proviso to Section 138. That necessarily means that for similar failure after service of fresh notice on subsequent dishonour the drawer cannot be liable for any offence nor can the first offence be treated as non est so as to give the payee a right to file a complaint treating the second offence as the first one. At that stage it will not be a question of waiver of the right of the payee to prosecute the drawer but of absolution of the drawer of an offence, which stands already committed by him and which cannot be committed by him again. 9. It is appropriate to consider the decision relied in MSR Leathers Vs. At that stage it will not be a question of waiver of the right of the payee to prosecute the drawer but of absolution of the drawer of an offence, which stands already committed by him and which cannot be committed by him again. 9. It is appropriate to consider the decision relied in MSR Leathers Vs. S. Palaniappan and another reported in (2013)1 Supreme Court Cases 177, wherein, it was specifically mentioned in para 22 as follows:- “22. The expression “cause of action” appearing in Section 142(b) of the Act cannot therefore be understood to be limited to any given requirement out of the three requirements that are mandatory for launching a prosecution on the basis of a dishonoured cheque. Having said that, every time a cheque is presented in the manner and within the time stipulated under the proviso to Section 138 followed by a notice within the meaning of clause (b) of the proviso to Section 138 and the drawer fails to make the payment of the amount within the stipulated period of fifteen days after the date of receipt of such notice, a cause of action accrues to the holder of the cheque to institute proceedings for the prosecution of the drawer.” As per the above said decision, as soon as the statutory notice was issued and the same was received by the borrower, the cause of action has been arisen and thereaftter, no second cause of action would arise. 10. Considering the above said decisions, I am of the view that as soon as the notice has been received, consequent upon the failute of the drawer to pay the money within the period of 15 days as envisaged under clause (c) of the proviso to Section 138, cause of action would arise and hence, he had to file the complaint within 30 days from that date, whereas, here, when the cheque was represented on 24.11.2003 and it was returned on 28.11.2003 and then only, notice was issued and complaint has been preferred and hence, the complaint is barred by limitation and the application is liable to be allowed. 11. Accordingly, this criminal original petition is allowed and the proceedings in S.T.C. No. 88 of 2006 on the file of the 1st Additional District Munsif cum Judicial Magistrate, Kumbakonam is hereby quashed.