K.D. Sales vs The Morinda Co-opertive Sugar Mills

G.S.Chahal, J.—M/s. K.D. Sales Corporation Petitioner through its proprietor Shri Ashwani Kumar has come to this Court u/s 482 Code of Criminal Procedure for quashing of the complaint dated 31.1.1992, Annexure P.7 filed by the Respondent against the Petitioner for offence u/s 138 of the Negotiable Instruments Act (for short the Act) and the summoning order Annexure P.6.

The brief facts on the basis of which the complaint annexure P.7 was instituted may be enumerated:

The Petitioner had to pay a sum of Rs. 58.041.15 to the Respondent. On 13th august. 1991 a cheque bearing no. 187388 drawn on the State Bank of India. Jalandhar, for a sum of Rs. 20,000/-was issued in his favour. This cheque when presented for payment was returned with the remarks "Exceeds arrangements not arranged for". Second time the cheque was presented but again returned with the remarks that the amount had not been deposited. A registered notice dated 6th January. 1992 was issued, but in spite of that notice no payment was made.

On 16th October, 1991 notice Annexure P.2 was issued to the Petitioner by the Respondent through his counsel Shri Karnail Singh Mander giving information about the dishonouring of the cheque and further making demand that the amount be paid within fifteen days. It appears that after the second dishonour of the cheque another notice Annexure P.4 was issued on 6th January, 1992 and the amount having not been paid the present complaint was filed.

Shri R.S. Bajaj, learned counsel for the Petitioner, has urged that once notice Annexure P.2 had been issued and the payment had not been made within the stipulated period of fifteen days, the cause of action had arisen to the Respondent and if he wanted to take advantage of the provisions of Sections 138 and 142 of the Negotiable Instruments Act, the Respondent had to institute the complaint within one month of the expiry of fifteen days from the date of receipt of notice Annexure p.2.

To appreciate the argument put forth by the learned counsel, the following provisions of the act may be extracted.

(Text of Sections 138 to 142 is omitted-Editor)

So long as the period of notice does not expire there can be no cause of action with the payees to make the drawer liable criminally. The issuing of cheque, its dishonour, receipt of its due intimation do not make out an offence. The drawer can stall criminal prosecution by paying the amount of cheque. It is only failure to make the payment that given a cause. (Section 142 (b) also speaks of cause of action arising under clause (c) of the proviso to Section 138). Other facts are only bundie of material facts which have also to be proved for establishing the charge.

Once a cause of action has arisen, the limitation will begin to run and it could not be stopped by presenting the cheque again so as to have a fresh cause of action and fresh limitation. The criminal prosecution had to be launched within one month of the expiry of fifteen days period from the receipt of notice Annexure P.2. The complaint having been filed more than one month after the expiry of fifteen days from the date of notice Annexure P.2, the complaint is barred by limitation. The Respondent may have his civil remedy on the basis of this cheque, but he cannot have a relief on the basis of complaint Annexure P.7 which is time barred. I, hear by, allow this petition, quash the complaint Annexure P.7 and all consequent proceedings.