E. Chellakkannu Nadar vs Sree Chenkal M.R. Simon and Another

K.T. Thomas, J.—Special leave is being sought for filing an appeal against the order of acquittal in a criminal prosecution for the offence under Sec. 138 of the Negotiable Instruments Act, 1881 (for short ''the Act''). Learned magistrate, who acquitted the accused, relied on the decision of this Court in Eumaresan v. Ameerappa (1991 (1) K, L. T. 893) and found that the complaint filed on a second cause of action with the cheque is not maintainable. In the trial court counsel for the accused cited a decision of Andhra Pradesh High Court in Rasool & sons v. Alidas Company 1992 Crl. L.J. 4048 and another decision of the Bombay High Court in Rakesh Porwell v. Narayan Joglekar (1993 Crl. L. J. 680) in which a different view has been adopted from that of Kumaresan''s case. But learned magistrate expressed his difficulty to follow those two decisions since Kumaresan''s decision has been rendered by the High Court of Kerala.

Learned counsel for the appellant/complainant, therefore, addressed arguments for persuading me to refer this case to a Division Bench for reconsideration of the dictum laid down in Kumaresan''s case in the light of the aforementioned two decisions.

Facts of this case, in brief, are the following; A cheque issued in favour of the complainant was dishonoured by the drawee bank on on 6-4-1990 on the ground of insufficiency of amount in the account of the accused. Complainant, thereupon sent a notice in writing to the accused on 7-4-09 demanding the amount. But the accused, on receipt of the notice, met the complainant and assured him that the amount would be made upon the account within four months. So, the complainant presented the cheque again on 20-8-90, but was again dishonoured by the bank on the same ground. On 15-9-90 the complainant sent another notice to the accused demanding payment. As the accused did not make the payment within the prescribed period even after receiving the second notice, the complaint was filed in the lower court. Accused disputes the stand of the complainant that an assurance was given to make up the amount within four months. However, the main contention raised in the trial court was that no complaint can be filed under Sec. 142 of the Act on the strength of a second cause of action. That contention was upheld and the learned magistrate acquitted the accused.

In Kumaresan''s case a Division Bench of this Court has considered the legal position on similar facts. The Bench pointed out that Sec. 138 of the Act created a new offence based on a cheque returned unpaid, subject to certain conditions. The offence is complete when all the conditions have been completed. When the offence is complete there is a completed cause of action. Sec. 142 of the Act contains an inviolable ban that no court shall take cognizance of the offence, notwithstanding anything contained to the Code of Criminal procedure, except upon a complaint in writing made within one month of the date on which the cause of action arose under clause (c) of the proviso to Sec. 138 of the Act. (Of course, there are certain other postulates also but they are not relevant in this case). The scheme of the legislature in creating a new offence under sec. 138 of the Act is reflected in the fascicle of provisions contained in Chapter 17 of the Act all of which were brought together through the same legislative exercise in Act 66 of 988. It was after considering the aforesaid scheme that the division bench of the court has made the following observations in paragraph five of the decision in Kumaresan''s case :

From the scheme of the provisions in Chapter XVII of the Act two features loom large First is that more than one cause

After carefully considering the reasons adverted to in the above decisions of the High Courts of Bombay and Andhra Pradesh I may observe, with great respect to the learned Judges that the ratio laid down by the division bench of this Court in Kumaresan''s case does not require reconsideration. I shall state the reasons below:

In Syed Rasool & Sods v. Aildas & Co (1992 Crl. L.J. 4048) the division bench of Andhra Pradesh High Court made a reference to Kumaresan''s case in paragraph 23 of the judgment. It seems that by some mistake their lordships thought that another division bench of the Kerala High Court has taken a contrary view. It is apposite to refer to the following passage in the said paragraph: "Another division bench of the Kerala High Court differed from the view expressed by the division bench of the same High Court referred to above in Mahadevan Sunil Kumar and Another Vs. Bhadran and Others, and held that there can be no second cause of action on the same cheque". As a matter of fact, the decision in Mahadavan Sunil Kumar''s case was rendered by a single Judge of this Court and not by a division bench and the question raised in Kumaresan''s case really came before the division bench on a reference made to it by another single Judge in the light of a different view adopted by Padmanabhan, J. in another case. These facts are mentioned in Kumaresan''s case. Hence the division bench of Andhra Pradesh High Court had proceeded on a faulty premise that there were two conflicting views between two division benches of Kerala High Court on this question.

That apart it is difficult to accept the reasoning adopted by the Andhra Pradesh High Court in Syed Rasool''s case. The laid reasoning has been summarised in paragraph twenty five of the decision as follows:

It is common knowledge that in commercial practice a cheque may be presented any number of times within the period of its validity. The principle of autrefois acquit or autrefois convict will also come into play and the drawer of the cheque cannot be subjected to repeated prosecutions and convictions on the strength of one cheque. So we feel that as there Is no restriction with regard to the presentation of the cheque any number of times within its validity period, and it is not open to the court by adding anything more that the cheque cannot be presented for a second time. The theory of double prosecution on the same cheque does not arise.

Right to present a cheque on any number of times appears to be the hub on which the division bench of A. P. High Court differed from the decision in Kumaresan''s case. There is no doubt that a payee or a holder in due course has the right to present the same cheque on any number of times within the period of validity of the cheques. In Kumaresan''s case it was pointed out by this Court that after completion of the cause of action, another cause of action cannot be created with the same cheque. Right to present the cheque more then once is not the decisive criterion for determining whether there was completion of offence. It has been pointed out in Kumaresan''s case that failure of payment within 15 days of receipt of notice is the culmination of the events which completes the cause of action, though it had its genesis in drawing the cheque. Even after completion of a cause of action Sec. 142 of the Act debars a court from taking cognizance of the offence unless a written complaint is filed within one month from the date of such cause of action. It was the cumulative result of all such events that a completed offence scums to the surface. Once an offence was committed by the drawer of the cheque, a second offence cannot be fastened on him by using the same cheque. It is not contemplated in the scheme covered by the provisions contained in Chapter 17 of the Act.

In the other decision Rakesh Nemkumar Porwal Vs. Narayan Dhondu Joglekar, of the Bombay High Court) the question whether more than one cause of action is contemplated in Sec. 138 of the Act was not considered. Such a question never even arose on the facts of that case. However, one observation made by Saldanha, J. in the decision has been highlighted by the learned counsel here to support his contentions that Bombay High Court has dissented from this Court''s decision in Kumaresan''s case. That observation is in the passage extracted below :

The Division Bench (of the Kerala High Court) has proceeded on the reasoning that the legislature never intended multiplication of the offences in relation to the number of times that the same cheque was dishonoured. In contrast to this view, the Calcutta High Court in the decision referred to supra ( Voltas Limited and Others Vs. Hiralal Agarwalla and Others, ) and in our considered view very correctly, held that the fresh cause of action accrues every time the cheque is dishonoured.

With very great respect to the learned Judges of the Division Bench in Rakesh Porwal''s case I may point out that it was a mistaken quotation from the Calcutta decision because Voltas Ltd.,''s case did not arrive at. any such finding. There was not even an observation in Voltas Ltd.,'' s case that it fresh cause of action accrues every time the cheque is dishonouied, nor was there any occasion to consider that aspect in the said case.

Though the counsel did not cite, I have come across another Less decision of a single Judge of the Calcutta High Court reported in Company of Management for Baranagar Jute Factory and Others Vs. Atis Dipankar Chowdhuri, in which Kumaresan''s case was referred to. Learned Judge has mentioned one decision rendered by another single Judge of the same High Court (Sekhar Guptha v. Subhash Chandra Mandal - 1992 Crl. L. R. (Cal) 14) in which the ratio in Kumaresan''s case was dissented from on the ground that "the prima facie reason for holding such a view was that Clause (a) of proviso to Sec. 138 a payee is entitled to present the cheque to the bank within a period of six months at the latest". I have already pointed out that the right to present the cheque at any number of times during the validity period is not the sole criterion to decide this question. In Kumaresan''s case the division bench of this Court has never said that the cheque can be presented only once. It can, of course, be presented on any number of times during the period of validity. But once the offence was complete with the failure to pay the amount within the prescribed period after making demand in writing, a subsequent presentation of the cheque for encashment is of no use so far as Sec. 138 of the Act is concerned. That is precisely the ratio in Kumaresan''s decision. The upshot is, the considered view adopted by the division bench of this Court in Kumaresan v. Ameerappa (1991 (1) KLT 893) does not require reconsideration.

Learned magistrate was therefore correct in finding, on the facts of this case, that the complaint is not maintainable. Accordingly, this Criminal Miscellaneous Case is dismissed.