Smt. Lakshmamma vs Nagaraj K.

K. Ramanna, J.—Both the appeals arise out of the judgment and order of acquittal passed by the 18th Additional CMM and 20th Additional Small Causes Judge at Bangalore City in C.C. Nos. 18849 and 18850 of 2003 challenging the order of acquittal passed by the Trial Court, acquitting the respondent for the offence punishable u/s 138 of the Negotiable Instruments Act, 1881. Since the respondent in both the appeals are one and same, both the appeals are taken up together, heard and being disposed of by this common judgment. In order to avoid repetition of facts in law.

It is the case of the appellant in Cri. A. No. 9 of 2006 that the respondent is acquainted with her and requested for a hand loan of Rs. 1,10,000/- to improve his travel business, as he was already running a maxi cab, a passenger carrier. Therefore, the respondent borrowed a sum of Rs. 1,10,000/- from the appellant on 20th December, 2002 and agreed to repay the same with interest at 12% p.a. He further agreed to pay within three months. Therefore, he issued cheque, Ex. P. 1, dated 13-3-2003 for Rs. 1,10,000/- which came to be dishonoured when it was presented for encashment, with share ''funds insufficient on 7-8-2003. Therefore, appellant got issued the legal notice as per Ex. D. 1, dated 21-3-2003 which came to be served on the respondent. Since the respondent has requested the appellant to present the cheque once again, the appellant has again presented the cheque, but again ,it came to be dishonoured. Therefore, the second notice came to be issued as Ex. P. 3 on 21-8-2003, which was duly served on the respondent on 23-8-2003. The complaint came to be filed before the Trial Court on 12-9-2003.

In Cri. Appeal No. 10 of 2006, likewise the respondent herein had borrowed Rs. 50,000/- from the appellant and issued Ex. P. 1, cheque which came to be dishonoured, when it was presented. First notice came to be issued to the respondent on 21-3-2003 which was duly served on the respondent on 23-3-2003. Again, appellant at the request of the respondent represented the said cheque-Ex. P. 1 for Rs. 50,000/- which was again dishonoured. Therefore, second notice, Ex. P. 3 came to be issued, which was duly served on 23-8-2003 and complaint came to be filed on 12-9-2003.

The Trial Court after considering the oral and documentary evidence placed on record by both the parties dismissed the complaints and acquitted the respondent holding that the complaints filed by appellant is time barred and that it further held that the appellant failed to prove the contents of Section 138 of the N.I. Act. Therefore, appellant has come up with these two appeals.

I have heard the arguments of the learned Counsel for the appellants. None represents on behalf of the respondent. Therefore, arguments of the respondent is taken as closed. After hearing the arguments of the Counsel for the appellants and perusing the material placed on record the short point that arises for consideration is that:

Whether the order of acquittal of the respondent passed by the Trial Court is perverse and incorrect?

I have carefully examined the material placed on record. Admittedly there is no dispute as to the issuance of the cheques-Ex. P. 1 in both the cases, the signature and the amounts found therein is also not in dispute. However, the Trial Court acquitted the respondent holding that the complaint is not maintainable as the same is time barred. In this behalf, learned Counsel for the appellants has submitted that at the request of the respondent himself the cheques, Ex. P. 1 in both the cases were presented for encashment for the second time which came to be dishonoured, therefore, notice-Ex. P. 3 in both the cases came to be issued. Therefore, there is no delay as such in filing the complaint against the respondent in both the cases. It is not the fault of the appellant to present the cheque for clearance for the 2nd time. It is the respondent who has played delayed tactics to defraud the rights of the appellant. Therefore, appellant has rightly filed the complaint in time. It is argued that issuance of the cheque or its bouncing for insufficient funds is the offence punishable u/s 138 of the N.I. Act. The cause of action to file complaint for an offence punishable u/s 138 of the N.I. Act arises only after notice u/s 138(b) of the N.I. Act is served on the drawer and on his failure to make payment of the cheque amount within 15 days and only thereafter the limitation starts, to file a complaint. Therefore, complaint came to be filed after service of notice, Ex. P. 3 on 23-8-2003. Therefore, finding of the Trial Court is totally incorrect, illegal and perverse. In support of their submission, learned Counsel for the appellants has relied on the decision rendered by this Court in the case of G. Ekantappa Vs. State of Karnataka and another, , wherein this Court held:

The mere issuance of cheque or its bouncing for insufficiency of funds does not constitute an offence u/s 138 of the Act. An offence is constituted only after a notice of demand u/s 138(b) is served on the drawer and on his failure to make payment within fifteen days. Once there is failure, offence continues till the amount remains unpaid. Section 142 only imposes certain restrictions in taking cognizance of the offence and nothing more. Therefore, an offence u/s 138 of the Negotiable Instruments Act is in the nature of continuing offence and as such complaint based on second or subsequent dishonour of the cheque is certainly maintainable in law, notwithstanding the fact that the drawee does not avail the opportunity and files the complaint after its first dishonour and thereafter notice u/s 138(b) of the Act being served on the drawer of the cheque. What is required is that the cheque should have been presented within six months or within its validity as required u/s 138(a) of the Act. Further, the complainant has to make out that a notice of demand was issued to the drawer within fifteen days from the date the cheque was last returned for want of sufficient funds and the drawer has failed to make payment within fifteen days from the date of receipt of that notice and the complaint should be within one month from that day. In the instant case, the allegations made in the complaint satisfy these requirements and indicate that the presentation of the cheque is within the time permitted u/s 138(a) of the Act, there is a notice u/s 138(b) and that has been served on the drawer and within 15 days thereafter, he has failed to make payment and the complaint is made within one month from that day. Therefore, the complaint made on a second dishonour is maintainable and the cognizance taken on that complaint is proper.

The learned Counsel for appellant has also relied on another decision rendered by the Apex Court in Gokak Patel Volkart Ltd. Vs. Dundayya Gurushiddaiah Hiremath and Others, , wherein it has been that as per Sections 472 and 473 of the Cr. P.C. - meaning and effect of "continuing offence", overriding provisions of Section 473 to be kept in view while considering any provision prescribing period of limitation for prosecution.

Further the learned Counsel relied on the decision rendered by Apex Court in case of Bhagirath Kanoria and Others Vs. State of M. P., , wherein the Hon''ble Apex Court held that:

Non-payment of the employer''s contribution to the provident fund before the due date, is a continuing offence and therefore, the period of limitation prescribed by Section 468 cannot have any application. The offence will be governed by Section 472 according to which a fresh period of limitation begins to run at every moment of the time during which the offence continues.

Finally, the learned Counsel for the appellants relied on the Full Bench decision of the Kerala High Court in case of Lakshmanan v. Sivarama Krishnana 1996(1) Crimes 551, wherein it has been held:

Complaint can be launched on basis of second or any subsequent dishonour of cheque - Successive cause of action can arise on repeated presentation and dishonour of same cheque - Deferment of prosecution not an act prejudicial to interest of drawer nor an act intended to harass drawer of cheque - Complaint will be maintainable inspite of the fact that no complaint has been filed in time on basis of one or more cause of action accrued earlier.

Therefore, the Counsel for the appellant submitted that the payee can file a complaint against the drawer of the cheque on the basis of cause of action accrued to him after issuing demand notice for the second time, with the plea that cheque was presented second time at the instance of the accused. In this behalf she relied on the decision rendered by Madras High Court in case of P. Jawahar v. S.S. Pillai 1994(1) Crimes 602. Wherein it has been held:

Complaint u/s 138 after second demand notice due to representation of cheque to bank at instance of accused is maintainable as such complaint is on distinct and separate cause of action.

Of course there is no dispute with regard to the law laid down by this Court, Supreme Court and Madras High Court referred to and relied upon by the learned Counsel for the appellant. However, in the instant case the appellant presented the cheque, Ex. P. 1 in both the cases for encashment which came to be dishonoured, the appellant has not disputed about issuance of the first notice dated 21-3-2003, but the complaint was not filed on the said cause of action, however again the said cheque was presented for encashment which again came to be dishonoured and he issued second notice on 21-8-2003. Of course, both the notices issued in the aforesaid cases were duly served on the respondent on 23-3-2003 and 23-8-2003 respectively. Of course, respondent, D.W. 1 has admitted in the cross-examination about issuance of the cheque, the date, amount mentioned and the signature found therein. However filing of the complaint by the appellant on 12-9-2003 taking into consideration that limitation starts for filing of the complaint on 23-8-2003 is totally incorrect, limitation starts as soon as notice was served on respondent. In the instant case the cause of action to file a complaint against the respondent arose, immediately after service of 1st demand notice issued by the appellants on the respondent i.e., on 23-3-2003 but undisputedly the appellants have not filed any complaint on the basis of the cause of action accrued to them on 23-3-2003, instead they presented the said cheques once again which again came to be dishonoured and again notice came to be issued on 21-8-2003 which served on the respondent on 23-8-2003 and of course the appellants have filed the respective complaints within the prescribed period of limitation after service of 2nd demand notice on the respondent, but the complaints filed by the appellants fails, for not filing the complaint against the respondent when the cause of action arose for the first time on 23-3-2008 after service of 1st demand notice issued by the appellants on the respondent. Of course a cheque can be presented for encashment at any times, during its validity period and it is the choice of the payee to sue or not to sue the drawer of the cheque on the said dishonour of cheque. However when once the payee issues notice demanding the cheque amount to drawer of the cheque and the said notice came to be served on the said (sic) of action starts from expiry of 15 days from the date of service of notice on the drawer, therefore, the complaint is required to be filed within one month from the date of commencement of cause of action, as provided u/s 138(c) of the N.I. Act. There is no continuing offence under the Act. Though successive presentation of the cheques are permissible under law, yet successive notices for the purpose of determining the cause of action are not conceived, there is no provision under the Act to file a complaint on the basis of the cheque itself, the complaint should be filed only after complying the provisions of Section 138(a) to (c) of the Act. Therefore in the instant case the complaints filed by the appellants on the strength of the 2nd demand notice is not at all maintainable, as such the order of acquittal passed by the Trial Court holding that the complaints filed by the appellants is time barred and that the appellants have failed to prove the provisions of Section 138 of the N.I. Act, to convict the respondent for the said offence, does not require any interference, as such these appeals is liable to be dismissed.

Accordingly, these appeals dismissed as devoid of merits.