S. Ravi Kumar vs Rajesh Kumar R. Jain

Pratap Singh, J.—Accused in CC. No. 3814 of 1993, on the file of the Eighth Metropolitan Magistrate, Madras, has filed this petition u/s

482 of the Code of Criminal Procedure, 1973, praying to call for the records in the above case and to quash the same.

The short facts are: The respondent herein has filed a complaint against the petitioner for the offence u/s 138 of the Negotiable Instruments Act,

1881 (which I shall refer hereafter as ""the Act""). The allegations in the complaint are briefly as follows:

The accused borrowed a sum of Rs. 30,000 from the complainant on June 15, 1992, and had executed a promissory note therefor. To discharge

the said debt, the accused issued a cheque dated December 22, 1992, in favour of the complainant for Rs. 30,000. The complainant presented the

cheque for encashment. It was returned for the reason, ""refer to drawer"". The complainant sent a notice on December 29, 1992, and the accused

had received it on December 31, 1992. The accused met the complainant and requested him to give some more time. On February 20, 1993, the

accused sent a letter to the complainant asking him to present the cheque again to realise the amount due. On that instruction, the complainant

presented the cheque again. The cheque was returned with the endorsement ""refer to drawer"" on February 27, 1993. The complainant sent a legal

notice dated March 1, 1993, to the accused calling upon him to make the payment, the notice was returned on March 12, 1993, as ""not found"".

The accused is still living at the very same address and the notice was sent to the very same address. In order to cheat the complainant, the

accused has not received the notice. Hence, the complaint.

Mr. Shanmughavelu, learned counsel for the petitioner, would submit that the first presentation of the cheque, dishonour thereof, statutory

notice, service of the same on the accused and the non-payment of the cheque amount within 15 days make out an offence and the cause of action

arose on the above non-payment and while so, the second presentation of the cheque, dishonour, demand for the cheque amount, written notice,

non-payment of the amount even after 15 days, cannot give rise to an offence u/s 138 of the Act. He would add that limitation and cause of action

would arise even from the time of non-payment of the first occasion and this complaint having been presented more than 30 days after such non-

payment, is barred by time.

I have heard Mr. Mohamed Rafi, learned counsel for the respondent on the above aspects.

I have carefully considered the submissions of Mr. A. Shanmughavelu. I shall first refer to the relevant provisions of the Act. Section 142(b)

reads as follows:

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

(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.

Clause (c) of the proviso to section 138 is relevant since that has been referred to in section 142(b) and so, to have a complete picture, the said

clause (c) needs extraction and it reads as follows:

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.

From a conjoint reading of section 142(b) and clause (c) of the proviso to section 138 of the Act, it would be clear that the cause of action

would arise on the expiry of 15 days from the date of receipt of the statutory notice issued as per section 138, proviso (b). I shall now consider the

relevant allegations made in the complaint with regard to an offence u/s 138 of the Act for which the impugned complaint was lodged. The relevant

paragraph 6 in the complaint reads as follows:

The complainant sent a legal notice on March 1, 1993, to the very same address as the previous notice and the notice was returned on March 12,

1993, as ""not found"". The complainant submits that the accused is still operating at the very same address and in order to cheat the complainant the

accused is not accepting the notice.

In A. B. Steels v. Coromandel Steel Products [1992] 74 Comp Cas 762 (Mad); [1992] 1 MWN (Cri.) 55, it is held that when the allegations

in the complaint make it clear that the accused was quite aware of the sending of the notice by the complainant and deliberately avoided the receipt

of the same, it cannot but amount to constructive service of notice. In Vasudevan (G.) v. Rajammal [1992] 1 MWN (Cri.) 241, it is held that

deliberate evasion to receive notice would amount to constructive service of notice. The above rulings would apply to the facts of this case. In

paragraph 7 of the complaint it is stated that he is filing this complaint within the stipulated time. On the allegations made in the complaint, with

regard to the cause of action which arose on the date of expiry of 15 days from the date of constructive service of notice, this complaint is field in

time.

I shall next consider the question as to whether the dishonour of the cheque, on the second presentation of the same, would amount to an

offence u/s 138 of the Act or whether the cause of action would arise only on the first presentation of the cheque, dishonour thereof and sending of

statutory notice. In this regard, learned counsel relied upon Kumaresun (N. C.) v. Ameerappa [1992] 74 Comp Cas 848 (Ker). In that case, the

petitioner issued a cheque on November 4, 1989, to the respondent, when the cheque was presented to the bank, it was returned. The respondent

issued notice to the petitioner on November 23, 1989. The petitioner failed to pay. The respondent again presented the cheque on January 15,

1990. It was again dishonoured. A fresh notice was issued by the respondent to the petitioner. The petitioner failed to pay. Thereupon, the

respondent field the complaint. It was held that the respondent could not 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.

Learned counsel would also rely upon Madhavrao Jiwajirao Scindia and Others Vs. Sambhajirao Chandrojirao Angre and Others, , wherein it

was held that it is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether

the uncontroverted allegations, as made prima facie establish the offence. It is also for the court to take into consideration any special features

which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. In Raj Behari

Singh and Another Vs. Chandrika Singh and Others, , it was held that time runs when the cause of action accrues. In Narayan Jivaji v.

Gurunathgouda AIR 1939 Bom 1, it was held that the cause of action means right and infringement of right. In Lakshminarayana Reddiar Vs.

Singaravelu Naicker and Another, , it was held that once the cause of action is complete and effective remedy is available for the party who relies

upon the cause of action, suspension of the cause of action during any period after the cause of action had arisen can only be justified under the

various exemptions specified in the sections of the Limitation Act. In Joseph Carlos, Xavier Louis Anthony Benedict Aldo Costa Vs. Stanislaus

Costa and Others, , it was held that when limitation beings to run, the ordinary rule is that nothing stops it.

In T. Annakodi Ammal Vs. K. Ethiraj, similar question, as in this case, came up for consideration before my learned brother Justice T. S.

Arunachalam. In that case, the complaint was field for an offence u/s 138 of the Act, in respect of the second presentation of the cheque and

dishonour thereof, after completing the other requirement of the Act. The learned Judge has held as follows (at page 873):

As long as the second presentation of the cheque does not get barred in view of section 138(a) of the Act, it cannot be held, that in no case the

second presentation of the cheque can be made, and the cause of action can arise only on the first presentation of the cheque and its return.

The learned judge had referred to K. V. Iyer v. Chitra and Co. [1990] 2 MWN (Cri.) 47, in which Justice Janarthanam held that the

presentation of a cheque for the second time at the request of the accused was permissible and that it cannot be stated that the cheque dishonoured

when presented for the second time will not give rise to a cause of action to prefer a complaint which has been filed within the statutory period

from the date of cause of action, namely, the date on which the cheque was presented for the second time.

In Madan Mohan Vs. K.M. Menon and Others, Justice Usha Mehra has stated that the scheme of sections 138 and 142 of the Act showed

that the cheque can be presented to the bank within a period of six months from the date of its issuance or within the period of its validity,

whichever was earlier. Clause (a) of the proviso to section 138 does not lay down as to how many number of times a cheque can be presented to

the bank. It only talks about the presentation of the cheque within a period of six months, or its validity, whichever was earlier. As rightly observed

by Usha Mehra J., the Legislature could not have intended that on the first default the drawer of the cheque should be dragged to litigation. It is not

uncommon that in commercial transactions, quite often the drawer of the cheque requests the payee to re-present the cheque over again, in order

to keep cordial relationship in business transaction, for it is not unusual that paucity of funds, at least for a temporary period, does arise. I have also

taken a similar view in Ravichandran (N. W.) Vellaiyappan [1992] MLJ (Cri.) 618. In Sivasankar Vs. Santhakumari, my learned brother Justice

Janarthanam had held that successive dishonouring of the cheque on different occasions, presented within its period of validity, will have to be

construed as constituting a separate cause of action for the initiation of a prosecution. In this case, the facts are: One Sivasankar had field the

complaint against Santhakumari for an offence u/s 138 of the Act. Santhakumari issued a cheque dated September 11, 1989, for Rs. 90,000 in

favour of the complainant; when presented for encashment, the cheque bounced on December 9, 1989. Thereafter, he issued a legal notice on

December 23, 1989, requiring the accused to make arrangement for honour of the cheque within fifteen days from the date of receipt of notice.

The accused met the petitioner and requested him not to initiate prosecution, promising to make the payment within a short time. But the accused

did not honour her commitment. The accused is stated to have informed the complainant that she had already arranged with her bankers and

requested the complainant to present the cheque once again for collection. When the cheque was presented again, it was returned with an

endorsement ""not arranged for"". After issuing the statutory notice, demanding payment within 15 days of receipt of notice, and since the payment

was not made, the complaint was laid. The learned Magistrate had dismissed the complaint. As against the same, a revision was field. The learned

judge had set aside the order of dismissal and had directed the learned Magistrate to take the complaint on the file and dispose of it according to

law. The learned judge had held as follows (at page 415):

The dismissal of the complaint by the learned Magistrate for the non-initiation of the prosecution on arising of the first cause of action, viz., the

dishonour of the cheque for the first time on December 9, 1989, does not at all reflect the true legal position as adumbrated under sections 138 to

142 of the aforesaid Act.

This ruling applies squarely to the facts of the present case. The submission of Mr. A. Shanmugavelu that once the cause of action begins to

run, it cannot be stopped and once there was a non-payment within 15 days of the service of notice of demand and there cannot be a second

presentation of the cheque, dishonour and arising of a cause of action on non-payment within 15 days of service of statutory notice of demand

cannot be sustained in view of the various rulings of this court, which I have referred to above and with which I am in total agreement. With

respect, I am unable to share the view of the Kerala High Court.

Mr. A. Shanmughavelu, would submit that in the rulings of this court, which I have referred to above, the question of limitation was not

considered and now be makes his specific submission that the complaint is barred by limitation and that may be considered now. This submission is

on the premises that on the first presentation of the cheque, dishonour and return of the cheque on the ground of insufficiency of funds or exceeding

arrangement, issuance of the statutory notice, non-payment of the cheque amount within fifteen days of the date of service of the statutory notice,

the cause of action arisen and so if the complaint is not field within one month therefrom, the right to proceed for offence u/s 138 of the Act

becomes totally extinct. This submission does not take notice of the principle laid down by this court in the various rulings referred to supra that

second presentation of the cheque, dishonour of the same on the ground of insufficiency of funds or exceeding arrangement, issuance of statutory

notice, non-payment of the cheque amount within fifteen days of receipt of the said statutory notice would also give rise to a cause of action. It is

not as if once the cause of action arose and thirty days thereof expired, it becomes extinct once for all. That would become barred by time only in

so far as that cause of action was concerned. If the payee does not choose to act on the first presentation, dishonour, etc., of the cheque for any

reason, the payee can always re-present the cheque and after the other requirements which make out the offence u/s 138 of the Act are complied

with, he can always file a complaint for offence u/s 138 of the Act. Taking that view of the matter, I am unable to accept this submission made by

Mr. A. Shanmughavelu.

In view of the above, the petition fails and shall stand dismissed.

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