Southern Weavers (P) Ltd. and another vs K.A. Thangavel

S.M. Ali Mohamed, J.—This petition has been filed u/s 482 of the Code of Criminal Procedure, to call for the records in S.T.R. No. 1630

of 1992 of Judicial Magistrate No. III, Salem and to quash the same.

The Petitioners are the accused Nos. l and 2 in S.T.R. No. 1630 of 1992 on the file of the Judicial Magistrate-Ill, Salem. A complaint was filed

by the Respondent under Ss.138 and 142 of the Negotiable Instruments Act against the Petitioners herein. It is averred in the complaint that the

complainant delivered textile goods to the accused for a sum of Rs. 1,10,732-46 and the accused gave a cheque bearing No. 186645, dated

3.1.1991 for Rs. 1,10,732.46 drawn on Canara Bank, Ammapet Branch, in favour of the complainant/Respondent. When the complainant

presented the cheque for collection through the complainant''s bank, Tamil Nadu Mercantile Bank, Salem, the same was returned as unpaid due to

Insufficient Funds"" in the accounts or the accused. The complainant, after giving 15 days notice to the accused preferred a complaint as stated

above. The learned Judicial Magistrate has taken cognizance of the complaint and issued process to the accused.

It is contended by the learned Counsel for the Petitioner that once the cheque was returned by the bank for insufficient funds, the offence was

committed on that day and the Respondent after issue of notice within 15 days from that date ought to have filed a complaint thereafter within 30

days. In the instant case, it is submitted that the cheque was presented for collection on various dates viz. on 3.1.1992, 3.2.1992, 16.4.1992 and

25.6.1992. Therefore, it is not in compliance with the provision as contained in Section 142(b) of the Negotiable Instruments Act, which

contemplates a single cause of action.

I am not able to accept the contention of the learned Counsel for the Petitioners to the effect that there can be only one cause of action as per

Section 142(b) read with Section 138(c) of the Act. Janarthanam, J. in a case reported in ""Sivasankar v. Santhakumari"" (1991 L.W. Crl. 481) has

rejected similar contentions and has held as follows:

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 9.12.1989, does not at all reflect the true legal position as adumbrated under Ss. 138 to 142 of the

aforesaid Act. What is contemplated in those proceedings is:

(i) The cheque has to be presented for encashment within its period of validity.

(ii) The cheque has to be dishonoured either because 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.

(iii) A Legal notice has to be given by the holder of the cheque to the drawer to comply with demand made in the notice for repayment within 15

days of the date of receipt of the notice.

(iv) If compliance is not made, the prosecution has to be launched within one month, after the expiry of 15 days from the date of receipt of notice.

There is no specific provision at all that the complaint or the prosecution has to be launched on the dishonour of the cheque on different occasions,

of course, presented within its period of validity, will have to be construed as constituting separate cause of action for the initiation of a prosecution.

The same view has been reiterated by Pratap Singh, J. in a case reported in ""N.W. Ravichandran v. Vellaiyappan"" (1992 M.L.J. (Crl) 618). In the

said case, the learned Judge has held as follows:-

There is no bar for presentation of the cheque at a later point of time also and if it was dishonoured for the reasons stated in Section 138 of the Act

and the further requirement are complied with, certainly the offence is made out. The first presentation and dishonour of the same would not stand

as a bar for the second presentation and commission of an offence u/s 138, Negotiable Instruments Act in respect of the dishonour for a second

time.

Similar view has been taken by the Andhra Pradesh High Court in a case reported in ""M/s. Syed Raswol & Sons and Ors. v. Aildar & Company

and another"" (1992 Crl.L. J. 4048). In the said case, it has been held as follows:

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 the Court (Eswara Prasad, J. in Richard Samson Sherrat v. State of A.P.,1992 (1) AWR.502 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. Cl.(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 statute has not laid down any limitation on the number of times that a cheque may be presented with 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. Ameerappa, (1992 (1) Crimes 23) 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 Kerala High Court, referred to above, in Mahadevan Sunil Kumar and Another Vs. Bhadran and Others, and held that there can be

second cause of action on the same cheque. In Mahadevan Sunil Kumar and Another Vs. Bhadran and Others, the Division Bench held as follows

(at page 337 of K.L.J.):

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 Koshy, (1991 (1) K.L.J. 595) 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 Cl.(b) of Section 138 and in that event, there is no offence, nor any attempt 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 Ss. 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 fifteen 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 on 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.

In view of the above rulings, I am unable to accept the contention of the learned Counsel for the Petitioner to the effect that there can be only one

cause of action as per Section 142(b) read with Section 138(c) of the Negotiable Instruments Act. No other point was urged by the learned

Counsel before this Court. In view of the above, this petition is dismissed.