Karnail Singh vs Ramesh Kumar Gupta

G.S. Chahal, J.

Karnail Singh petitioner by means of this petition seeks quashing of complaint Annexure P1, titled as `Ramesh Kumar Gupta v. Karnail Singh and another'', pending in the Court of Judicial Magistrate I Class, Ludhiana.

The respondent has brought a complaint under Section 138 of the Negotiable Instrument Act and his allegations in brief are that Karnail Singh petitioner had purchased a Premier Padmini Car bearing registration No. MXI54 duly fitted with stereo for a consideration of Rs. 48000/, and issued a cheque No. 5260, dated 25th May, 1989, for Rs. 18,000/, drawn on the State Bank of India, Ludhiana, towards the part payment of price of the car and the car was delivered on 21st April, 1989. The petitioner issued another cheque dated 10th June, 1989 for Rs. 30,000/ towards the balance price. Cheque dated 25 May, 1989 was presented for collection to the bank, which was returned with a memo `Refer to Drawer''. Subsequently this cheque alongwith the second cheque was presented for payment but were dishonoured on account of `insufficiency of funds'' and received back with a memo `Refer to Drawer''. A fifteen days notice was then served on the petitioner but he failed to make the payment within the prescribed time.

The learned Magistrate after recording the evidence summoned the petitioner to stand trial for offence under Section 138 of the Negotiable Instrument Act.

Learned counsel for the petitioner has urged that since no notice was issued within fifteen days of the dishonouring of the cheque dated 25th May, 1989 no prosecution under Section 138 of the Act was competent. That for making the petitioner criminally liable the complainantrespondent was bound to issue a notice on the first dishnonour of the cheque and he could not create new cause of action by presenting the cheque again. There is force in contention of the learned counsel. To make a person liable for dishonour of a cheque for want of sufficiency of funds, Section 138 lays down the following three additional conditions in the form of proviso :

"138. Dishonour of cheques for insufficiency, etc. of funds in the account.

xxx xxx xxx

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 of 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 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 receipt of the said notice..."

The condition in the proviso(b) to Section 138 of the Act becomes relevant for the decision of the controversy. It envisages an issue of notice of fifteen days on receipt of information by the payee from the bank regarding dishonour of the cheque. This obviously refers to the very first dishonour. If the payee wants to take advantage of the provisions of Section 138 of the Act he has to act immediately when he receives notice of dishonour. He cannot keep things pending. If he wants to ignore that default he may avail of his civil remedy but cannot make out criminal offence under Section 138 of the Negotiable Instrument Act against the drawer of the cheque. The D.B. authority of Kerala High Court in `Kumaresan v. Ammerappa'' 1991(3) Recent Criminal Reports 172 , after examining the provisions of the Act made the following observations :

"5. From the scheme of the provisions in Chapter XVII of the Act (sic) features room large. First is that more than one cause of action on the same cheque is not contemplated or envisaged. Second is, institution of prosecution cannot be made after one month of the cause of action. If more than one cause of action on the same cheque can be created, its consequence would be that the same drawer of the cheque can be prosecuted and even convicted again and again on the strength of the same cheque. Legislature cannot be imputed with the intention to subject a drawer of cheque to repeated prosecutions and convictions on the strength of one cheque."

I am in perfect agreement with the above observations of their Lordships of the Kerala High Court. The complainant thus could not launch prosecution under Section 138 of the Act with respect to dishonouring of cheque dated 25th May, 1989 as it did not comply with proviso (b) of Section 138 of the Act.

Learned counsel has tried to make out a case that the cheques were without consideration. These facts, however, cannot be gone into in these proceedings by this Court. If the petitioner has any valid defence he may show it to the trial Court. In view of the above discussion, the prosecution of the petitioner for dishonour of cheque dated 25th May, 1984 for Rs. 18,000/ is, hereby quashed. The complaint will, however, continue with respect to the other cheque.

Parties through their counsel, are directed to appear before the trial Court on 30th August, 1993.