M/s. Syed Razool and Sons and others vs M/s. Aildas and Co. and others

G. Radhakrishna Rao, J.—These two Criminal Petitions are filed under sections 482 of the Criminal Procedure Code for quashing C.C. No. 143 of 1992, on the file of the XI Metropolitan Magistrate, Secunderabad, and C.C. No. 481 of 1991, on the file of the 11 Additional Munsif - Magistrate, Tirupathi. The accused in C.C. No. 143 of 1992, on the file of the XI Metropolitan Magistrate. Secunderabad, are the petitioners in Criminal Petition No. 689 of 1992 while the accused in C.C. No. 481 of 1991, on the file of the It Additional Munsif - Magistrate, Tirupathi, is the petitioner in Criminal Petition No. 967 of 1992. Respondent No. 1 in both the Criminal Petitions are the complainants in C.C. No. 143 of 1992 and C.C. No. 481 of 1991, respectively.

These petitions have come up for hearing before this Bench on a reference made by our learned brother, Iyyapur Panduranga Rao, J. in Criminal Petition No. 967 of 1992 and by one of us (i.e., G. Radhakrishna Rao, J.) in Criminal Petition No. 689 of 1992.

The complaints, in both the Calendar Cases, been fried u/s 138 read with section 142 of the Negotiable Instruments Act, 188! (Act No. 26 of 1881), hereinafter referred to as "the Act".

As the point of law involved in both the Criminal Petitions is one and the same, they have been heard together and a common order is being passed.

A brief reference to the facts in both the petitions is necessary for deciding the points of law'' involved therein.

The case, set up by the 1st respondent in Criminal Petition No. 967 of 1992 (who is the complainant in C.C. 481 of 1991), is briefly as follows :- The petitioner (accused) issued a cheque, bearing No. 2271604, for Rs. 33,750/-, on October 23, 1990 in favour of the first respondent on M.G. Road Branch of Indian Bank, Bangalore. The said cheque was presented for collection but the same was bounced. Consequently, the first respondent (complainant) contacted the petitioner on telephone, whereupon he was advised to represent the said cheque on or after February 25, 1991. Accordingly the 1st respondent represented the cheque on February 28, 1991 but, once again, the same was bounced with the endorsement "referred so drawer" and the same was accordingly intimated to the 1st respondent on March 11, 1991 by registered post. Thereupon, the 1st respondent issued a notice on March 14, 1991 calling upon the petitioner to pay the amount covered by the cheque in question. Since there was no reply from the petitioner, the 1st respondent filed C.C. No. 481 of 1991, u/s 138 of the Negotiable Instruments Act and Section 420 of the Indian Penal Code against the petitioner-accused.

As alredy stated, Criminal Petition No. 967 of 1992 has been filed by the petitioner-accused u/s 482 of the Criminal Procedure Code alleging that even if taking all the allegations at their face value as true, they do not constitute an offence within the meaning of section 138 of the Act. It is contended on behalf of the petitioner that the endorsement "refer to drawer" does not necessarily indicate insufficiency of fund alone and in such circumstances it cannot be said that an offence u/s 138 of the Act has been made out by the 1st respondent. Reliance was placed on the decisions reported in M/s. Union Road Ways (P) Ltd & another v. M/s. Shah Ramanlal Stesh Kumar & another1 and Hunasikath''math v. State of Karnataka.

It is further contended that when once the cheque was not honoured there cannot be a second cause of action relating to the same cheque and the proceedings u/s 138 of the Act on the endorsement "refer to drawer" are not sustainable. It is next contended that the forwarding of the complaint u/s 156(3) of the Criminal Procedure Code to the Police is illegal and without jurisdiction for the reason that the payee has to file a private complaint only u/s 200 of the Criminal Procedure Code where an offence u/s 138 of the Negotiable Instruments Act is alleged. It is also contended that the trial court has no jurisdiction to entertain such a complaint since no part of the cause of action arose within the jurisdiction of the said court.

When the above petition, viz., Criminal Petition No. 967 of 1992, has come up for final disposal before our learned brother, Iyyapu Panduranga Rao, J. the main ground that has been pressed is that the cheque was returned with an endorsement "refer to drawer" and that endorsement does not necessarily mean insufficiency of funds and as such the prosecution is not valid and consequently the proceedings in C.C. No. 481 of 91 are liable to be quashed. In support of his contention, the learned counsel for the petitioner - accused relied upon M/s. Union Road Ways (P) Ltd. v. M/s. Shah Ramanlal Satesh Kumar. (supra) That is a case where the cheque was returned with an endorsement "refer to drawer" and the words "refer to drawer" came, up for consideration in the said judgment. Referring to the endorsement "refer to drawer", another learned Judge of this court, Eswara Prasad, J., observed as follows :

A reading of the complaint shows that the cheque was returned with an endorsement "refer to drawer". From this, the complainant inferred that the cheque was issued without necessary funds in the account of the petitioners and the cheque was returned on account of the insufficiency of funds in their account. Such an inference cannot be drawn. The cheque might have been returned for various reasons.

The learned Judge, Eswara Prasad, J,, has relied upon Abdul Samad v. Satyanarayanana Mahawar3 and Hunasikathimath v. State of Karnataka (supra) for coming to the above - said conclusion.

The learned counsel for the 1st respondent - complainant has relied upon Voltas Ltd. v. Hiralal Agarwalla4 and V.S. Krishnan v. V.S. Narayanan15 to show that in banking parlance the words "refer to drawer" necessarily mean that the cheque has been returned for want of funds in the account of the drawer of the cheque. Our learned brother, Iyyapu Pandurange Rao, J. felt that the above two cases relied upon before him by the learned counsel appearing for the 1st respondent appear to be clinching in establishing that the words "refer to drawer" necessarily mean, as per banking custom, that the cheque has been returned for want of funds in account of the drawer and as it is a matter of considerable importance arising in a number of criminal cases instituted u/s 138 of the Act and since it has been found that the decision of this court in M/s.. Union Road Ways (P) Ltd. v. M/s. Shah Ramanlal Satesh Kumar (supra) which is contrary so the other two decisions, requires reconsideration, he referred the matter to the Bench.

The other Criminal Petition. viz., Criminal Petition No. 689 of 1992 has come up for hearing before one of us. (viz. G. Radhakrishna Rao, J,) and relying upon the decision reported in M/s. Union Road Ways (P) Ltd. v. M/s. Shah Ramanlal Satesh Kumar (supra) it has been contended on behalf of the petitioners - accused in this case that merely because the cheque was returned with the endorsement "refer to drawer", the same does not mean that the complaint should be entertained. Taking into consideration the above reported decision and the contention of the learned counsel for the petitioners - accused, it was felt that the endorsement "refer to drawer" has to be construed with reference to the language adopted by the bank and not otherwise and that the matter requires reconsideration by a Division Bench.

The following are the brief facts of the case in Criminal Petition No. 681 of 1992 :- The 1st respondent (who is the complainant) is a money lender. The petitioners - accused have executed two promissory notes, one for Rs. 60,000/- on 28-12-1988 and the other for Rs. 25,000/-on 10-3-1981. The petitioners - accused gave a cheque bearing No. 1/10-0226331 dated 15-7-1991 in favour of the 1st respondent, drawn on Account No. 4703 on Andhra Bank, R.P. Road, secunderabad, for Rs. 50,000/- The complainant presented the cheque on 3-8-1991 to Andhra Bank, R.P. Road, Secunderabad, but the said cheque was returned by Andhra Bank with remarks "insufficient funds" through a Memorandum of Return of the Bank. The Managing Partner of the 1st respondent - complainant contacted the petitioners and informed them about the return of the cheque and demanded payment. The petitioners evaded payment of The cheque amount and promised to pay the same within a short time but they have not paid the amount. Therefore, on 12-8-1991 the 1st respondent - complainant sent a legal notice to the accused calling upon them to pay the cheque amount of Rs. 50,000/- within 15 days from the date of receipt of the said notice. The petitioners - accused received the said notice on 26-8-1991 and they have requested the Managing Partner of the 1st respondent to represent the cheque during the first week of January, 1992. Accordingly, the cheque was represented again through Andhra Bank, R.P. Road, Secunderabad, which, in turn, appear.''; to have been sent to Syndicate Bank, Nizam Shahi Road, Hyderabad for collection and the said Bank, viz., Syndicate Bank informed Andhra Bank, R.P. Road, Secunderabad through their Memo dated 11-1-1992 with an endowment ''refer to drawer" and the same was informed to the 1st respondent - complainant by Andhra Bank, vide their Memo dated 13-1-1992. Thereupon, the 1st respondent complainant informed the petitioners - accused about the same and demanded payment. As the petitioners - accused have not paid the amount under the cheque, a legal notice was issued to the accused on 25-1-1992 calling upon them to pay the amount. They were also informed through the said legal notice that in case of default in payment, legal action u/s 138 of the Negotiable Instruments Act would-be taken against them. Having received the legal notice, the petitioners-accused sent a reply notice dated 6-2-1992 with false pleas, extraneous to the cheque in question, and mixing up other transactions. So the" 1st respondent - complainant filed a complaint in C.C. 143 / 92 on the file of the XI Metropolitan Magistrate, Secunderabad u/s 138 read with Section 142 of the Negotiable Instruments Act.

The petitioners - accused have filed this petition (viz., Criminal Petition No. 689 of 1992) for quashing the criminal proceedings in C.C. 143 / 92 alleging that they paid the outstanding amount, by way of pay order No. 372516 dated 24-9-1991 for Rs. 25.000/- and another sum of Rs. 25,000/- by way of banker''s cheque No. 372611 dated 24-10-1991. The petitioners have also paid another sum of Rs. 25,000/- by way of a banker''s cheque bearing No. 373248 dated 16-1-1992. The petitioners never instructed the 1st respondent to represent the said cheque and out of ignorance and good faith they allowed the cheque to remain with the 1st respondent. The petitioners submit that the amount covered by the cheque has already been paid and therefore the question of representing the same does not arise. The petitioners sent a suitable reply dated 6-2-1992 to the registered lawyer''s notice dated 25-1-1992. It is further alleged by the petitioners that they issued a blank cheque towards collateral security and not in discharge of any debt or liability. The 1st respondent was instructed by the petitioners not to present the said cheque to the bank for collection at any time. But, the 1st respondent in breach of the said trust, filled up the cheque and presented it to the bank without the knowledge of the petitioners. On receipt of a registered notice dated 12-8-1991 got issued by the 1st respondent, the petitioners approached the 1st respondent and put the facts correctly and the 1st respondent apologised but requested for payment. The petitioners never instructed the 1st respondent to represent the cheque in question. It is further contended by the petitioners - accused that there is no cause of action for filing the complaint and that the complaint is barred by limitation.

Before examining the rival contentions, it is appropriate to have a look at the relevant provisions viz, sections 138 and 142 of the Negotiable Instruments Act, which are extracted here under. Section 138 of the Act is in the following terms:

Dishonour of cheque for insufficiency, etc., of funds in the accoun:- 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 extend to one year, or with fine which may extend to twice the amount of the cheque, or 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.

Explanation:- For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability.

Section 142 of the Act is in the following terms :

Cognizance of offences:- Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),

(a) no court shall take cognizance of any offence punishable u/s 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 (c) 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 u/s 138.

The main contention raised by Sri. B. Nalini Kumar and Sri. P.S. Narayana, learned counsel for petitioners in both the Criminal Petitions, is that when section 138 of the Act contemplates of filing of a complaint only under two circumstances, viz insufficiency of the amount of money standing to the credit of the account of a person or it exceeds the amount arranged to be paid from that account, the Magistrate was not competent to entertain the private complaint when the complaint itself shows that the endorsement of the Bank for return of the cheque is only "refer to drawer".

The learned Public Prosecutor has contended that the proformas used for return of cheques have no statutory force and that those proformas have been prepared to facilitate the bank employees to return the cheque with a particular indication.

In this connection different views have been expressed by different courts. In M/s. Union Road Ways (P) Ltd., v. M/s. Shah Ramanlal Satesh Kumar (supra) a learned single Judge of this court (Eswara Prasad, J.). relying upon Abdul Samad v. Satya Narayana Mahawar (supra), and also Hunasikathimath v. State of Karnataka (supra), held that the cheque might have been returned for various reasons and in view of the averments in that particular complaint to the effect that the cheque was returned for being referred to the drawer, no offence was made out u/s 138 of the Act, and so holding the learned single Judge has quashed the proceedings impugned in the said criminal petition. The reason given by the learned single Judge in the above cited decision is that by the endorsement "refer to drawer" the complainant inferred that the cheque was issued without necessary funds in the account of the petitioners and the cheque was returned on account of insufficiency of funds in their account and such an inference cannot be drawn and that the cheque might have been returned for various reasons.

In Hunasikathimath v. State of Karnataka (supra) a learned single- Judge of Karnataka High Court, held that section 138 of the Act provides for punishing the drawer of a cheque which is dishonoured only under two eventualities, viz., (1) insufficiency of the amount in the account of the drawer of the cheque to honour the cheque or (2) the amount covered by the cheque exceeding the amount arranged to be paid from that account by an agreement made with Bank and not on any other ground although there are several eventualities under which a cheque can be dishonoured and one such eventuality is the closure of the account of the drawer of the cheque in the particular bank on which he has drawn the cheque subsequent to the issue of the cheque. After construing the provisions of section 138 of the Act, the learned Single Judge of the Karnataka High Court in the above decision held that the complainant has not made out a case for quashing the proceedings u/s 482 of the Criminal Procedure Code. This is a case where the cheque was dishonoured on the ground "account closed".

The scope of expression "refer to drawer", used in section 138 of the Negotiable Instruments Act, 1881, came up for consideration before a learned single Judge of the Madras High Court in V.S. Krishnan v. V.S. Narayanan (supra) It was held that in banking parlance, the endorsement ''-refer to drawer" when cheques are returned umpaid is used severally for returning the cheques for want of funds in the drawer''s account or because of the service of garnishee order and if, in banking parlance, "refer to the drawer" is used for the purpose aforementioned, the ingredients of the section would be attracted and that if the expression did not take into its fold the two contingencies contemplated by the section, the offence could not be said to have been established.

In Voltas Ltd. v. Hiralal Agarwalla (supra) it was held that the remark "refer to drawer" necessarily means, as per banking custom, that the cheque has been returned for want of funds in the account of drawer of the cheque. The learned counsel for the petitioners has submitted that the clause "refer to drawer" does not necessarily mean that the cheque was dishonoured. He has tried to draw support from a judgment of the House of Lords, reported in London Joint Stock Bank Ltd. v. Macmillan and Arther.6 The relevant passage reads as follows:

The case, then must be taken as the simplest one, namely, of the cheque duly signed, forwarded on behalf of the customer to the banker, and honoured. My Lords, there are in these circumstances reciprocal obligations. If the cheque does not contain on its face any reasonable occasion for suspicion as to the wording and figuring of its contents, the banker, under the contract of mandate which exists between him and his customer, is bound to pay. He dare not, without liability at law, fail in this obligation, and the consequences to both parties of the dishonour of a duly signed and ex facie valid cheque are serious and obvious. In the second "place, if there be on the face of the cheque any reasonable ground for suspecting that it has been tampered with, then that in the usual case is met by the marking "refer to drawer", and by a delay in payment until that reference clears away the doubt. Always granted that the doubt was reasonable, the refusal to pay is warranted. These obligations on the banker do not, of course, exist until after (he cheque has been presented.

While considering the second part, we have to consider the custom and usage that has been adopted by the bank. In banking parl-lance certain proformas have been used for return of the cheques. Such proformas are used only to indicate that the cheque was not honoured for a particular reason mentioned therein. If that cheque has been suspected or tampered with or some other technical reason has been pointed out, definitely it would find a place in the endorsement given by the bank at the time of dishonouring the cheque. Under no circumstances it can be said that the return of the cheque without payment is an indication that the bank is not prepared to pay the amount covered by the cheque to the person who has presented the cheque. A person in whose favour a cheque has been issued is entitled to have that amount drawn from that account provided there is sufficient amount to the credit of that account. If it is an account payee cheque he is entitled to draw the same through his account. The scheme of the Act for filing a complaint in this context has to be considered. Section 138 of the Act lays down that where a cheque drawn by a person for payment of any amount of money to another person from out of his account is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 u/s 138 of the Act and shall be punished with imprisonment for a term which may extend to one year or with fine which may extend to twice the amount of the cheque or with both. It is further stated in proviso (a) to section 138 that nothing contained in this section shall apply unless 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. As per proviso (b), the payee or the holder in due course of the cheque as the case may be, must make 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. Clause (c) enables the drawer of the cheque to make the payment of the said amount of money to the payee within fifteen days of the receipt of the said notice, as contemplated under proviso (b). Section 138 of the Act draws a presumption in favour of the holder that the holder of a cheque received the cheque, in whole or in part, of any debt or other liability. Section 142 of the Act deals with taking of cognizance. Under sub section (a) of section 142 no court shall take cognizance of any offence punishable u/s 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. Under sub-section (b) of section 142 a complaint for an offence u/s 138 of the Act can be filed within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138. From the scheme of the provisions, Sections 138 and 142 of the Act, it is seen that a cheque can be presented to the Bank within a period of six months from the date on which it is drawn or within a period of its validity, whichever is earlier. Clause (a) of proviso to section 138 does not lay down as to the number of times a cheque can be presented to the bank. Thus, from the scheme of the provisions in Chapter XVII of the Act two features loom 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 a cheque to repeated prosecutions and convictions on the strength of one cheque.

From the Scheme of the Act, it is clear that following the dishonour of the cheque a notice has to be issued in writing to the person who has issued the cheque inviting his attention that the cheque has been dishonoured and he is liable for penal consequences u/s 138 read with section 142 of the Act. When the reason for return of the cheque has been mentioned as "refer to drawer" or "insufficiency of funds" or "account closed", it is the primary duly of the drawer of the cheque to make the payment of the said amount of money to the payee within fifteen days of the receipt of the said notice. So, an opportunity has been given by the Legislature itself by providing a notice to the drawer and for payment of the amount within fifteen days of the receipt of the said notice and if he fails to comply with clause (e) of section 138, filing of a complaint within one month from the date of cause of action is also provided under sub-section (b) of section 142 of the Act, Thus, a notice has to be given to the drawer and that notice is a condition precedent. That means, the drawer of the cheque has got an opportunity to know in advance before filing the complaint that the cheque was dishononred for a particular reason. When that information was already available with him and when he has not made any attempt to pay the same, it cannot be said that the cheque was returned not for insufficiency of funds or not arranged for. In the normal banking parlance "refer to drawer" means that no funds are available and when an opportunity has been given to the drawer of the cheque by inviting his attention and when he has not paid the amount, it has to be construed that "refer to drawer" or "insufficiency of funds" or "account closed" etc., ultimately resulted in dishonouring the cheque and preventing the drawee from getting the amount which is only on account of the act committed by the drawer, who has given the cheque. The two situations contemplated in section 138 are insufficiency of the amount standing to the credit of the account or it exceeds the amount arranged to be paid by an agreement made with the bank such as obtaining the facility of over - draft etc. If either of these two contingencies has not been complied with, the only alternative left to the bank is to dishonour the cheque or to return the cheque with the endorsement as is being followed by them from time to time as per the trade custom, usage and practice. It is not the phrase or the words used by the Bank in dishonouring the cheque that has to be taken into account but the intention of the bank has to be taken into consideration. The intention of the Legislature is clearly to see that in the event of the amount not being paid on presenting the cheque due to insufficiency of funds or if it exceeds the arrangement, the person is 1 able for prosecution. However, the further safeguard that has been made to prevent hasty action is that the payee or the holder in due course of the cheque shall make a demand for the payment of the amount covered by the said cheque by giving a notice, in writing to the drawer within fifteen days of the receipt of information by him from the bank. It is well settled that the penal provisions have to be construed strictly and not liberally. The court will not extend the law beyond its meaning to take care of a broader legislative purpose. Here "strict" means merely that the court will refrain from exercising its creative function to apply the rule announced in the statute to situations not covered by it even though such an extension would help to advance the manifest ulterior purpose of the statute. Here strictness relates not to the meaning of the statute but to using the statute as a basis for judicial law making by analogy with it. Even in the Calcutta High Court case, viz., Voltas Ltd. v. Hiralal Agarwalla (supra) averments have been made in the complaint petition which show that the complainant had observed the formality as required by the provisos (a), (b) and (e) of section 138 of the Act before initiating the criminal proceeding against the drawer of the cheque. It was contended therein on behalf of the petitioners that the clause refer to drawer" Joes nut necessarily mean that the cheque was dishonoured. But, on a clarification from the Bank, to the effect that the remark "refer to drawer" necessarily means as per banking custom that the cheque has been returned for want of funds, the court came to the conclusion that it is Primafacie seen that the cheque in question was bounced because of inadequacy of funds in the drawer''s account. The endorsements "refer to drawer" or "insufficiency of funds" or "not arranged for" or account closed" or some other technical words used by the bank, ultimately resulted in dishonouring the cheque, on account of the fault of the person who has issued the cheque in not providing sufficient funds, or not arranging funds Having issued the cheque without having sufficient funds or not arranging the funds or after closing the account, it is definitely an act on the part of the drawer of the cheque which ultimately resulted in dishonouring the cheque. This again is a matter of evidence which has to be adduced in support of the endorsement. Under these circumstances, it cannot be said at this stage that taking of cognizance on a private complaint by the court itself is bad. The words refer to drawer'' in their ordinary meaning amounted to a statement by the bank, "we are not paying; go back to the drawer and ask him why" or else "go back to the drawer and ask him to pay". In view of the above discussion, we are of the firm view that "refer to drawer" necessarily means, as per banking parlance, that the cheque has been returned for want of funds in the account of drawer of the cheque. So we are not in agreement with the view expressed by the learned single Judge of this court (Eswara Prasad, J., J) in M/s. Union Road ways (P) Ltd. Another v. M/s. Shah Ramanlal Satesh Kumar & Another (supra).

The next contention relates to cause of action. It has been contended on behalf of the petitioners that dishonour of cheque by itself does not give rise to cause of action, as payment can be made on receipt of notice. Further, it is contended that even on admitted facts there cannot be a second cause of action relating to the same cheque. The same contention has been considered by a learned single Judge of this court (Eswara Prasad, J.) in Richar Samson Sherrat v. State of A.P.7 by holding that the cheque can be 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. Clause (a) of the proviso to section 138 does not lay down as to the number of times a cheque can be presented to the Bank. When the staute has not laid down any limitation on the number of times that a cheque may be presented within the period of six months or any shorter period, it will not be desirable to read into the said clause any such restriction as to the number of times a cheque may be presented. A Division Bench of the Kerala High Court in Kumaresan v. Ameerappa8 took a view that the payee cannot have a second cause of action on the same cheque when once he had failed to institute a complaint on the strength of the first cause of action. 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 v. Bhadran9 and held that there can be no second cause of action on the same cheque. In Mahadevan''s case the Division Bench held as follows:-

It is clear that cause of action for filing the complaint may arise on several occasions and the payee or holder in due course is entitled to present the cheque at any time within a period of six months from the date on which it was drawn and for filing the complaint he should have served notice of such dishonour to the drawer, the payee or holder in due course can make a second presentation of the cheque and if other conditions are fulfilled, he can launch a complaint on the basis of the second dishonour of the cheque as the cheque would remain valid for a period of six months.

A Division Bench of the Kerala High Court in Prithviraj v. Mathew Koshy10 observed thus;

Dishonour of cheque by itself does not give rise to a cause of action, because payment can be made on receipt of notice of demand contemplated in clause (b) of section 138 and in that event, there is no offence, nor any attempt to commit the offence, nor even a preparation to commit the offence. Failure to pay the amount within fifteen days of receipt of notice alone is the cause of action and nothing else.

From the scheme of sections 138 and 142, it is thus seen that a cheque can be 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. So, when a cheque, which has been presented to the Bank, is returned, the payee or the holder in due course of the cheque has to give a notice, in writing. to the drawer within fifiteen days of the receipt of information from the bank and the drawer of such cheque must make the payment of the amount to the payee or the holder of the cheque within fifteen days of the receipt of the said notice. The person who issued the cheque may approach the payee in whose favour the cheque was issued and convince him that he will pay the amount or he will arrange to see that the amount will be paid and request for postponement of time. The cheque can be presented to the bank within the period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. During the validity period the cheque can be presented any number of times but the action by filing a complaint u/s 138 read with Section 142 can be taken only once.

The Supreme Court in State of Bihar v. Deokaran11 pointed out the distinction between the offence which takes place when an act or omission is committed once and for all and a continuing offence. The complainant in whose favour a cheque has been issued has got a right to file a complaint only once on the said cheque. He can file a complaint within one month of the date of cause of action. Cause of action is a bundle of facts. The party can take into account the final cause of action as the one to base his claim within the period of limitation and the final cause of action arises on account of dishonour alone. Thus, the complainant can file a complaint for offences u/s 138 read with section 142 of the Act after the dishonouring of the cheque for the first time or he may choose to present the cheque at the request of the drawer within the said period of six months from the date of the cheque any number of times but the action to be taken by him by filing of complaint is only once and the period of limitation has to be counted from the date of last dishonour of the cheque. That means, the limitation period cannot be taken into consideration from the first date of dishonour and the last date of dishonour alone has to be taken into consideration for the purpose of filing a complaint, So we affirm the judgment of the learned single judge (Eswara Prasad, J.) in Richard Samson Sharrat v. State of A.P. (supra) holding that the second presentation of the cheque within the period of six months is valid. However, it is clarified that the complaint that has to be laid on the said cheque is only once and that too duly taking into account the limitation as prescribed basing on the result that has come out from the subsequent presentation of the cheque.

It is one of the settled principles of interpretation of statutes that when two interpretations are possible about a penal provision, only that which is less onerous to the accused should be preferred (Vide Max well on the Interpretation of statutes 12th edition at page 139): "The principle applied in construing a penal Act is that if, in construing the relevant provisions, "there appears any reasonable doubt or ambiguity", it will be resolved in favour of the person who would be liable to the penalty". "If there are two reasonable constructions, we must give the more lenient one. That is the settled rule for the construction of penal sections." The Supreme Court has adopted the same principle for interpretation of penal statutes. Departure from this principle is permitted if the object and scheme of the statute would be defeated otherwise. When the statute has not laid down any limitation on the number of times that a cheque may be presented within the period of six months or any shorter period under clause (a) of the proviso to section 138 it will not be desirable to read into the said clause any such restriction as to number of times a cheque may be presented. 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 autre fois 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 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. The contention that there will be a possibility of prosecuting the person twice on the same cheque does not arise as we are of the opinion on a reading of section 138 and the scheme enunciated there in that there is no prohibition for presentation of the cheque any number of times within its validity period because the presentation may be in most of the times at the request of the drawer either in writing or orally but the right to present the cheque within the six months'' period is not taken away as that right has already been given to the payee in whose favour the cheque has been given.

These criminal petitions have been filed at the stage when the court has taken cognizance of the matter as they are private complaints. It is a well settled principle that in cases filed u/s 138 read with section 142 of the Act, the court has to entertain the same on the basis of the private complaint filed by the complainant. If the allegations perse show that he has complied with the provisions of section 138 and 142 of the Act, the court is entitled to take cognizance of the same. The court has to look into the following main features, viz, the date of issuing of the cheque, the date of dishonouring of the cheque by the bank, the date of issuing a notice, and the date of filing of the complaint in court. If these facts have been borne out from the allegations in the complaint, the court of competent jurisdiction is entitled to take cognizance of the same and the High Court is not entitled to entertain an application u/s 482 of the Criminal Procedure Code. At certain times when defence has been taken stating that the cheque has been issued under particular circumstances or that there is some other agreement between the parties, that is a matter to be enquired into by the competent court. Merely because the defence plea has been raised in the reply notice it does not mean that the defence plea has to be accepted ex facie and the party is entitled to file an application u/s 482. Where, on a reading of the complaint as it is, if no case has been made out prima facie the High Court can entertain such an application. It is a well settled principle in cases u/s 138 of the Act that when defence theory has already come on record in the form of reply given by the drawer it is not desirable for the High Court to entertain an application; u/s 482 of the Criminal Procedure Code, it is for the investigating court to consider after trial whether the defence plea set up is correct or not. Normally, in the other cases defence plea will not be available at the time of filing of the complaints but incases u/s 138 of the Act the defence plea will generally be available and all the documents will be filed along with the complaint. When those facts have already been on record in the form of notice and reply notice, it need not be stated in detail in the complaint under what circumstance the complaint is filed. The contention that there is vagueness in the complaint as the defence theory mentioned in the reply has not been pleaded in the complaint is not tenable.

Some of the categories of cases where the inherent jurisdiction to quash proceedings can and should be exercised are given in the landmark case reported in R.P. Kapur v. State of Punjab12 and they are as follows:-

(i) Where it manifestly appears that there is a legal bar against the institution or continuance of the criminal proceeding in respect of the offence alleged. Absence of the requisite sanction may, for instance, furnish cases under this category.

(ii) Where the allegations in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises; it is a matter merely of looking at the complaint or the First Information Report to decide whether the offence alleged is disclosed or not.

(iii) Where the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in support of the case or the evidence adduced clearly or manifestly fails to prove the charge.

In dealing with this class of cases it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is manifestly and clearly inconsistent with the accusation made and cases where there is legal evidence which on its appreciation may or may not support the accusation in question. In exercising its jurisdiction u/s 561A (old) the High Court would not embark upon an enquiry as to whether the evidence in question is reliable or not. That is the function of the trial Magistrate, and ordinarily it would not be open to any party to invoke the High Court''s inherent jurisdiction and contend that on a reasonable appreciation of the evidence the accusation made against the accused would not be sustained.

Keeping in view the above guidelines set out by the Supreme Court, we have to examine the petitions on hand. In a case filed u/s 138 read with section 142 of the Act the entire material will be on record. The notice issued by the complainant will form part of the record. It is a matter to be investigated into by the competent Magistrate but not by the High Court in a proceeding u/s 482 of the Criminal Procedure Code. Section 482 of the Criminal Procedure Code can be invoked where ex - facie no case has been made out on the allegations in the complaint, Whether the cheque was returned for either-of the two grounds mentioned in Section 138 is a matter that has to be investigated into by the competent Magistrate. On the allegations in the complaint cognizance has been taken by the competent Magistrate. It is not for this court u/s 482, Cr. P.C. to go into the rival contentions. Following the guidelines given by the Supreme Court in Kapur''s case (supra), we hold that it is neither desirable nor permissible to allow the complainant, particularly in the facts and circumstances of the cases on hand, to invoke the jurisdiction u/s 482, of the Criminal Procedure Code. Inherent powers u/s 482, Cr. P.C. can be used as a shield to prevent the abuse of the process of the court but not as a sword or weapon to pre-empt or abort the proceedings initiated on a complaint which requires due enquiry and trial.

In view of the above discussion, we hold that there are no merits in both the Criminal Petitions. The Criminal Petitions are, therefore, dismissed.