Nitin Anand vs State of UT

R.P. Nagrath, J.—This petition has been filed u/s 482 Cr.P.C. for quashing of Complaint No. 54201/2011 dated 13.10.2011 (Annexure P-1) for offence Section 138 read with Sections 139, 141, 142 of the Negotiable Instruments Act, 1881 (for short ''the Act'') as amended by the Banking Public Financial Institution Laws (Amendment) Act, 1988 read with Section 420 IPC and the summoning order dated 15.10.2011 (Annexure P-2).

Respondent No. 2 filed criminal complaint Annexure P-1 for dishonour of cheque dated 10.8.2011 amounting to ` 25,70,831/- issued in favour respondent No. 2 by petitioners allegedly for the discharge of liability. The cheque was dishonoured vide Memo dated 11.8.2011 (Annexure P-6) with the remarks ''account is dormant''. It was stated in the complaint that notice dated 30.8.2011 (Annexure P-4) was served calling upon the petitioners to pay the cheque amount within a period of 15 days. Despite the expiry of 15 days period, the cheque amount was not paid and consequently the complaint was presented before the Magistrate on 13.10.2011. Learned Judicial Magistrate issued the process against the accused finding sufficient grounds to proceed against them for offence u/s 138 of the Act.

It was stated that in fact notice dated 16.8.2011 (Annexure P-3) was served upon the petitioners after dishonour of the cheque and the same was received by petitioners on 19.8.2011. The period of 15 days expired on 02.09.2011 and therefore, the complaint could be filed before 02.10.2011.

Learned counsel for the petitioners vehemently contended that as per clause (b) of proviso to Section 142 of the Act, cognizance of the complaint could not be taken after expiry of one month period from the date on which cause of action arises under clause (c) of Section 138 of the Act, which provides as under:-

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.

It is further stated that complainant-respondent basically stated about the service of notice dated 30.8.2011 to the petitioners for constituting cause of action whereas the notice had already been sent on 16.8.2011 and thus, it was not permissible for the commencement of fresh period of limitation merely by sending the second notice.

In reply filed by the respondent-complainant, the factum of sending the letter dated 16.8.2011 is not disputed but it was stated that this was not the demand notice and in fact was merely an intimation letter having been sent in routine. It is, thus, contended that the cause of action arose for filing the complaint on sending notice dated 30.08.2011.

I have heard learned counsel for petitioners and learned counsel for respondent-complainant and have given my anxious thought to the rival contentions.

Learned counsel for the complainant-respondent submits that notice dated 16.8.2011 (Annexure P-3) in fact is not the legal notice and it is only an intimation. Perusal of the contents of notice would show that M/s. Aren Enterprises, drawer of the cheque of which petitioners are the partners, was issued a notice calling upon it to pay the amount of cheque by demand draft within 07 days from the date of receipt of the letter failing which the complainant will be compelled to pass on the matter to the legal cell for filing the case u/s 138 of the Act.

A similar contention was raised before the Hon''ble Supreme Court in Krishna Exports and Others Vs. Raju Das that the first notice dated 15.2.1995 was not really a notice as contemplated by clause(c) of the proviso to Section 138 of the Act and it cannot be construed to have given rise to a cause of action to file the complaint. It was also contended that the earlier notice was only in the nature of a communication which does not spell out in clear terms a demand to make the payment. The contention was rejected by Hon''ble Supreme Court and it was found that on reading of the letter, it was quite plain and clear that the respondent required immediate payment of the amount of cheque failing which he threatened to take legal action in the matter. It was held that the said letter qualifies itself as a notice within clause (c) of proviso to Section 138 of the Act.

This is precisely the contention of learned counsel for the complainant-respondent. Hon''ble Supreme Court in Krishna Exports'' case (supra) further held that in the circumstances, the Magistrate should not have taken cognizance of the complaint after the expiry of the time limit prescribed by clause (b) of Section 142 of the Act.

It was similarly held by Delhi High Court in Galore Packaging India Pvt. Ltd. Vs. Sanjay Sharma, 2013(2) Cri.CC 410 as under:-

This Court is further of the opinion that Section 138 of the Negotiable Instruments Act, 1881 does not prescribe any format of a notice. Section 138 of the Negotiable Instruments Act, 1881 provides that the payee or holder in the due course of the cheque should only make a demand for payment of said amount by giving a notice in writing to the drawer of the cheque within fifteen days of receipt of information by him from the bank regarding the return of cheque as unpaid.

What is quite surprising in this case is that there was no remote reference even to the notice dated 16.8.2011 in the complaint instituted by the complainant-respondent. The law is well settled on the subject that cause of action for the offence u/s 138 of the Act would arise only on the issuance of first notice. This principle was laid down by Hon''ble Supreme Court in Sadanandan Bhadran Vs. Madhavan Sunil Kumar, Even in Tameeshwar Vaishnav Vs. Ramvishal Gupta, it was reiterated that cause of action arises only once on the issuance of notice upon dishonour of the cheque and receipt thereof by the accused and it was, thus, held that the learned Magistrate had erred in law in taking cognizance on the basis of the second notice whereas the cause of action had arisen under the first notice sent by the complainant. It was also held that the complaints were filed beyond the period of limitation and that learned Magistrate erred in taking cognizance on the complaint filed on the basis of the second notice.

There is proviso to clause (b) of Section 142 of the Act with regard to the condonation of delay but no such case was propounded by the complainant either in the complaint or in the reply nor it was possible for the complainant to take such a plea because there was concealment of previous notice sent to the petitioners.

In view of the above, this petition is allowed and Complaint No. 54201/2011 dated 13.10.2011 (Annexure P-1) and the summoning order 15.10.2011 (Annexure P-2) are quashed.

Before parting with the order, it is worth noticing that the cheque is dated 10.08.2011 and there is still the period of limitation for filing a civil suit for recovery based on the transaction in question. Learned counsel for complainant-respondent was unable to inform categorically whether civil suit has been filed for recovery on the basis of the transaction or not but it seems that the remedy would still be available.