Swatantar Kumar Prop M/s S N Enterprises vs Harsh Kumar Adarsh Kumar

G.S.Chahal, J.

(1) Swatantar kumar, prop. M/s s. N. Enterprises (hereinafter referred to as the petitioner) has come to this court in this petition under section 482 cr. P. C. For quashing the complaint dated february 1, 1990, annexure p 1 summoning order dated february 20, 1990, annexure p 4 and the order dated april 25, 1990, annexure p 5, passed by the judicial magistrate 1st class, phagwara.

(2) The petitioner is being prosecuted on the basis of a complaint annexure p 1 instituted by the respondents for offences under section 138 of the negotiable instruments act (hereinafter referred to as the act) and section 420 1pc.

(3) According to the averments made in the complaint, the petitioner purchased goods valued rs. 1,25,668. 24 vide bill nos. 330, 334, 345 and 341 dated oct. 25, 1989, oct. 26, 1989, october 27, 1989 and october 28, 1989, respectively. To discharge this liability, the petitioner issued three cheques in favour of the respondents dated november 20, 1989 for a sum of rs. 50,000/ , dated november 21, 1989 for a sum of rs. 50,000/ and dated november 22, 1989 for a sum of rs. 25,668. 24, drawn on uco bank, phagwara. Assurance was given of its due honour. The cheques were presented to the bank by the respondents, but the same were returned vide endorsements dated december 4, 1989, december 16, 1989 and december 18, 1989 respectively, with the remarks "refer to drawer". The respondents then served two notices on the petitioner on december 19, 1989 through registered post and under postal certificate conveying the information of dishonouring of the cheques and calling upon the petitioner to make the payment. The amount having not been paid within the stipulated period of the notices, as such, the petitioner had committed an offence under section 138 of the act. Even at the time of issuing the cheques, the petitioner had dishonest intention and was thus, also guilty under section 420 ipc.

(4) The petitioner pleads that no notice had been served upon him as envisaged under the act and there was also no evidence to show that such notice had in fact had been served on him. With the complaint, only a photocopy of the notice had been attached. That the complaint having been filed more than one month after the date of issuing of the notice, as pleaded in the complaint, was barred by time.

(5) Section 138 of the act creates notional offence after the cheque is dishonoured on account of money standing to the credit in the account of the drawer to be insufficient. But before a criminal offence is committed, the following conditions as laid down under section 138 of the act must be fulfilled :

"138. Provided that nothing contained in this section shall apply unless (a) the cheque has been 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; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) 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. "

(6) Under section 142 of the act such a complaint has to be made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138. To make out an offence under the aforesaid section, the cheque issued by the accused must have been dishonoured on account of the default of the drawer in arranging funds in his account to enable the bank to honour the cheque. The term "refer to drawer" is a courteous way used by the bank officials to convey that there are no funds in the name of the drawer to honour the cheque. After the receipt of information about dishonouring of the cheque, the drawee has to serve a notice upon the drawer to make the payment within a period of 15 days of the receipt of notice. This notice has also to be issued within a period of 15 days of the receipt of information about the dishonouring of the cheque. In case the drawer fails to make the payment within the stipulated period of 15 days, a cause of action arises in favour of the drawee to institute a criminal complaint against the drawer and for that he has one month period from the date of expiry of the period of notice. Under the act, it is a notional offence which is committed and the offence is complete only when the drawer of the cheque fails to make the payment within the stipulated period of 15 days from the date of service of notice. The period of limitation, as such, will start to run with the expiry of the 15 days period from of delivery of the notice. The respondents claim in the complaint that due notice had been issued on december 19, 1989, which was within 15 days of the first endorsement of the bank giving the information of dishonouring of the cheques. The notice was for 15 days and assuming that the same was served on the very next day of its issuance, the 15 days period will expire on january 4, 1990 and the complaint could be instituted within one month thereafter. The complaint in the present case having been instituted on february 1, 1990, was thus within limitation. The question as to whether the notice was in fact issued, is a matter of evidence which has to be gone into by the trial court. The allegations in the complaint taken in its entirety, make out an offence under section 138 of the act. Whether offence under section 420 ipc is also made out is a matter of assessment of the evident. The fact, however, remains that goods worth rs. 1,25,668. 24 were purchased on credit to be an instance of offence under section 420 ipc also. No case is, thus, made out quashing the complaint and the subsequent orders. This petition is dismissed. Petition dismissed.