Sunil Behal vs Bhagwat Dayal Gupta and Another

V.S. Aggarwal, J.—Bhagwat Dayal Gupta Respondent No. 1 had filed a criminal complaint with respect to the offence punishable u/s 138 read with Section 141 of the Negotiable Instruments Act (hereinafter described as ''the Act'') against the Petitioner. It had been asserted that Respondent No. 1 is running the business under the name and style of M/s Babu Ram Harish Chander and is supplying cement to various customers. The Petitioner had been purchasing cement from Respondent No. 1 as per orders from time to time. After taking delivery of the cement, the Petitioner had been compromising and assuring Respondent No. 1 to make payment within one month. The Petitioner issued a cheque for a sum of Rs. 30,702/- dated 27.5; 1989 drawn at Indian Bank, Saket, New Delhi. The same was presented four times but was dishonoured. A notice was issued but the payment was not made within 15 days. On these broad facts, complaint with respect to the offence punishable u/s 138 of the Negotiable Instruments Act was filed.

The learned Judicial Magistrate, Faridabad summoned the Petitioner on 9.3.1990.

By virtue of the present petition Sunil Behal Petitioner seeks quashing of the complaint and the order summoning the Petitioner as an accused. It is alleged that according to the averments made, the cheque was presented four times. No action was taken against the Petitioner when the cheque was sent for the first time nor any notice was issued at that time. On basis of the subsequent dishonouring of the cheque action cannot be taken.

In the reply filed the Respondent No. 1 had contested the petition. It was pointed that Respondent No. 1 is the sole proprietor of the firm M/s Babu Ram Harish Chander. The firm had its head office at Paharganj, Delhi. The Petitioner had been purchasing cement from Respondent No. 1 and issued the cheque dated 27.5.1989. The cheque was" presented again and again and for the last time it was dishonoured on 24.7.1989. The legal notice was issued on 1.8.1989. It was insisted that in these facts the Respondent No. 1 had a cause and could file the complaint for the offence punishable u/s 138 of the Act.

Learned Counsel for the Petitioner only urged that the cheque was dishonoured and one it was dishonoured, it could not be represented. If Respondent No. 1 again presented the cheque, no action could be taken under the Negotiable Instruments Act with respect to the offence punishable u/s 138 of the said Act. The Court was inclined to discuss the same but the matter is concluded by the Division Bench decision of this Court in the case of Harshivinder Singh v. Bhagat Trading Company Criminal Miscellaneous No. 1 1384-M of 1991, decided on 21.5.1997. A similar question had been referred to the Division Bench. It was held:

From the scheme of provisions of Section 138 and 142 of Chapter VII of the Amendment Act, 1988, as referred to above, it is clear that a cheque pan 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. Clause 9a) of proviso (2) of Section 138 does not lay down as to the number of times a cheque can be presented to the Bank. So when a cheque which has been presented to the Bank is returned the payee or the holder in due course, of the cheque is obliged to give a notice in writing to the drawer within fifteen days of the receipt of information from the Bank and the drawer of the cheque must make the payment of the amount to the payee or the holder of the cheque within 15 days of the receipt of the said notice. The person who has 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 may request for postponement of time. The cheque can be presented to the Bank within a period of six months from the day 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 payee 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.

Subsequently, while discussing the same question the Court concluded:

The scheme of the Act and the provisions of Section 138 do not intend or indicate restriction on the number of times when such cheques could be presented and represented for encashment, but certainly within the prescribed period of six months or the validity period of the cheque, whichever is earlier. The period of 15 days provided for service of notice under Clause (b) of proviso to Section 138 could commence from such last dishonouring of the cheque. This of course no way would have the effect of extending the prescribed period of limitation of six months or the validity period of the cheque, as the case may be. In other words, cumulative effect of contemplated actions under the provisions of Section 138 must result in a complete cause of action within the meaning of these provisions. The object of these newly added provisions in the Act is to prevent the mischief arising from dishonouring of the cheque which has been issued by the drawer and to provide due safeguard in commercial deals. The purpose of these provisions would be defeated if a dishonest drawer is permitted to take advantage on the principle that a dishonoured cheque cannot be represented within its period of validity or the prescribed period of six months, whichever is earlier. The rights of a payee are certainly not the same when he serves the notice and travels into the realm of incidental actions arising from the dishonouring of the cheque. Apparently for the reason that if the notice is served by the payee on the drawer of the cheque, then nothing more is contemplated on the part of the payee except to wait for the period specified and to approach the Court of competent jurisdiction for appropriate orders. The distinction is a fine one but we feel the same is very subtle and clear.

In other words, it was held that if the cheque is presented again, the cause to prosecute subsists but if notice has been issued thereafter, representment of the cheque will not give a fresh cause. Like a true soldier, one has to bow to the decision of the larger Bench. The legal position having been clarified, therefore, gives the answer to the argument advanced by the Petitioner''s counsel. In fact it negatives the plea so much thought of by the learned Counsel. Necessarily, the Respondent No. 1 must be held to be justified in filing the complaint

for these reasons, the petition being without merit must fail and is dismissed.