Mohd. Furqan vs State Of U.P. And Another
2012 Latest Caselaw 3213 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?Court No. - 54
 

 
Case :- APPLICATION U/S 482 No. - 23877 of 2012
 

 
Petitioner :- Mohd. Furqan
 
Respondent :- State Of U.P. And Another
 
Petitioner Counsel :- M.A. Siddiqui,Faizul Hasan
 
Respondent Counsel :- Govt.Advocate
 

 
Hon'ble Arvind Kumar Tripathi,J.

1. Heard learned counsel for the applicant, learned A.G.A. and perused the record.

2. The Criminal Misc. Application under section 482 Cr4.P.C. has been filed with the prayer to quash the proceeding of Case No.3462/9 of 2011 (Aftab Ahmad vs. Mohd. Furqan under section 138 N.I. Act, PS. Mughalpura, District Moradabad pending before A.C.J.M, Court No.4, Moradabad. 

3. Learned counsel for the applicant submitted that according to the complaint case a cheque for a sum of Rs.1,00,000/- was issued on 1.3.2010 by the applicant. When that cheque was presented at  Lal Bagh, Branch, Moradabad, it was dishonoured on the ground of insufficient fund and on 15.06.2010 cheque was returned. However, that cheque was re-presented before the bank and it was again dishonoured due to insufficient fund on 16.7.2010. Thereafter a notice was given on 24.7.2010 and after that notice was returned on 31.7.2010 as unclaimed and after that the complaint dated 6.9.2010 was filed. Hence there was no compliance of the provision and there was delay because in view of the section 138 of Negotiable Instrument Act, the complainant   was required to give notice within thirty days from the date of the communication of dishonour of the cheque. The cheque was dishonoured first time  on 15.6.2010 and again was dishonoured on 16.7.2010. However, notice was given on 24.7.2010  after one month, from the date when on first time cheque was returned , hence the complaint in the present case is not maintainable. He also contended that even the notice was not  served upon the applicant. Hence on this ground also the complaint is not maintainable and the same is liable to be quashed.

4. Learned counsel for the applicant relied two judgments of the Apex Court in the case of Siva Kumar vs. Natarajan reported in 2009(3) JIC 231(SC) and Shah Mohammad and others vs. State of U.P. and another reported in 2010(1)JIC 478(All) Lucknow Bench.

5. Considered the submissions of counsel for the parties. In the present case according to complaint the cheque was issued and due to insufficient fund it was dishonoured. It was communicated on 15.6.2010. Thereafter the applicant has assured that he would deposit the amount in the account. Since the period of cheque was valid, hence during the period of validity cheque was again presented  with the bank. However, it was again dishonoured and returned due to insufficient fund on 16.7.2010. Registered Notice was given on 24.7.2010, hence there is no delay in giving notice. The notice was given through registered post as well as with U.P.C. However, the applicant refused to take it and it was returned as unclaimed on 31.7.2010. Thereafter when the payment was not made within 15 days then, cause of action arises due to non payment of the amount. The complaint dated 6.9.2010 was filed within a month in view of the provision of 138 and 142 of Negotiable Instrument Act, hence in view of the above, there is no illegality and the notice as well as the complaint was well within the time in view of the aforesaid provision of Negotiable Instrument Act.  The provisions of section 138 and 142 of the Negotiable Instrument Act are quoted here in below: 

138. Dishonour of cheque for insufficiency, etc., of funds in the account-- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of 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, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for (a term which may be extended to two years), or with fine which may extend to twice the amount of the cheque, or with both:

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 thirty 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

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

(a) no Court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;

(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 : [Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period;[

( c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.]

6. In case of Siva Kumar Natarajan (supra) the Apex Court has considered the decision of earlier bench. In that case cheque dated 27.10.03 for a sum of Rs.1 lac was presented for collection to his banker on 27.11.2003 and that cheque was dishonoured with the remarks "insufficient funds" on  2.12.2003. The information was received by the complainant on 3.12.2003. Thereafter on 2.1.2004 the respondent issued legal notice to the appellant calling upon him to pay the amount in question within 15 days from the date of receipt of the notice. However, neither the reply was sent nor payment was made. Thereafter the complaint was filed under section 138 of the Negotiable Instrument Act and conviction was made. However, subsequently after passing of the judgment there was settlement in between the parties. It was also examined. It was observed by the Apex Court that the issuance of the notice would not by itself gives rise to cause of action without the communication of notice. In that case indisputably the notice was moved on the 31st day and  not within  thirty days from the date of receipt of intimation form the Bank.

7. In the case of Tameshwar Vaishnav vs. Ramvishal Gupta, reported in 2010(1)JIC 475 SC. the  earlier judgement of the Apex Court Sadanandan Bhadran vs. Madhavan Sunil Kumar, 1998 (1) JIC 1960 SC was considered and followed. It was held that the cause of action to file complaint on non payment despite issue of the notice, arises but once. Another cause of action would not arise on repeated dishonour on re-presentation. In that case it was observed by the court that the cheuqe can be presented repeatedly within its validity period and cause of action for complaint under section 138 Negotiable Instrument  Act arises but once, with the issuance of the notice after dishonour of the cheque and receipt thereof by the drawer. The same view was reiterated in case of Prem Chand Vijay Kumar vs. Yashpal Sig & anther, JT 2005) SC 318 equivalent to 2005 (4) SCC 416. In the present case notice was not issued earlier and notice was issued only once. Para 15 & 16 of the aforesaid are given herein below:

"15. On careful scrutiny of the decision in S.L. Construction's case (supra), it would appear that the facts on the basis of which the said decision was rendered, were different from a case of mere presentation and dishonour of the cheque after issuance of notice under the proviso to Section 138 of the Act. While the decision in Sadanandan Bhadran's case (supra), clearly spells out that a cheque may be presented several times within the period of its validity, the cause of action for a complaint under Section 138 of the Act arises but once, with the issuance of notice after dishonour of the cheque and the receipt thereof by the drawer. The same view has been reiterated in Prem Chand Vijay Kumar's case (supra). The only distinguishing feature of the decision in S.L. Construction's case (supra) is that of the three notices issued, the first two never reached the addressee. It is only after the third notice was received that the cause of action arose for filing the complaint. In effect, the cause of action for filing the complaint in the said case did not arise with the issuance of the first two notices since the same were never received by the addressee.

16. The provisions of Section 138 and clauses (a), (b) and (c) to the proviso thereof indicate that a cheque has to be presented to the Bank within a period of six months from the date of its validity, whichever is earlier. Clause (b) indicates that the payee or the holder in due course of the cheque, has to make demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid and clause (c) provides that if the drawer of the cheque fails to make the payment of the said amount of money to the payee or to the holder in due course of the cheque within 15 days of receipt of the said notice, the payee or the holder of the cheque may file a complaint under Section 142 of the Act in the manner prescribed."

8. In case of Prem Chand Vijay Kumar (supra) three notices were issued. However,  first and two never reached to the addressee and after service of third notice cause of action arises for filing the complaint and it was observed that the cause of action for  filing of the complaint arises with the issuance of the third notice because the  first two notices were never served.

9. Hon'ble Apex court in the case of Sadanandan Bhadran vs. Madhavan Sunil Kumar, 1998 (1) JIC 1960 SC it was held that under clause (a) of the proviso to section 138 N.I.Act does not put any embargo upon payee who successively present a dishonoured cheque during period of its validity. It was also observed in the course of business transaction it was not uncommon for a cheque being returned due to insufficient funds or  similar  such reasons and being presented again by the payee after sometime, on his own volition or at the request of drawer, in expectation that it would be encashed.  The  primary intention of the payee would be to get his money and not prosecution of drawer and each representation of the cheques and its dishonour, a fresh right accrues in his favour and not a cause of action arises. He might go on presenting the cheque so as to unable him to exercise such right at any point of time during validity of the cheque.  But once he gave notice in clause  (b) of section 138, he forfeits such right for in case of failure of drawer to pay money within the stipulated time, he would be liable for the offence and the cause of action for filing the complaint would arise. The views taken by the Apex Court was upheld in subsequent judgment in the case of M/s Prem Cahndra  Vijay Kumar (supra) it was held in the following paragraphs of the aforesaid judgment:

"10. The period of one month for filing the complaint will be reckoned from the day immediately following the day on which the period of fifteen days from the date of the receipt of the notice by the drawer expires.

11. As noted in Sadanandan Bhadran's case (supre) once a notice under clause (b) of Section 138 of Act is "received" by the drawer of the cheque, the payee or holder of the cheque forfeits his right to again present the cheque as cause of action has accrued when there was failure to pay the amount within the prescribed period and the period of limitation starts to run which cannot be stopped on any account.

12. One of the indispensable factors to form the cause of action envisaged in Section 138 of the Act is contained in clause (b) of the proviso of that. It involved the making a demand 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". If no such notice is given within the said period of 15 days, no cause of action could have been created at all.

13. Thus, it is well settled that if dishonour of a cheque has once snowballed into a cause of action it is not permissible for a payee to create another cause of action with the same cheque."

10. In view of the aforesaid discussion it is well settled  that in view of the proviso of clause (a) to section 138, the payee has right to represent the cheque repeatedly after it was dishonoured, during period of its validity. The representation of the cheque might be on his own discretion or on request of the drawer during period of its validity  with expectation that it would be encashed. The aim and object of the Negotiable Instrument Act is to protect the right of the payee/holder of the cheque  against drawer  with certain limitation to be observed and followed before filing of the complaint,  so the drawer may get opportunity to re-pay the amount due against him. The interest of the complainant payee is to get money and normally when there is no option then it  is compulsion to file the complaint under the Negotiable Instrument. Certain protection has been provided in proviso to section 138 and 142 of the  Negotiable Instrument. to the drawer of the cheque against whom the amount is due. Hence the right of  representation of the cheque is stopped once notice under clause (b) of the proviso of section 138 of the Negotiable Instrument Act is issued by drawer/holder   and served upon the drawer of the cheuqe. After service of notice if within the stipulated period i.e. 15 days after service of notice the amount is not paid then  cause of action arises and in view of the provision of section 142 of the Negotiable Istrument the complaint has to be filed within  one month.  There is provision  under Section 147 Negotiable Instrument Act, after filing of the complaint,  for compounding of the offence.

11. In the present case only one notice was issued and before the notice was issued the cheque was again presented within the period of its validity. Cause of action arises only once after the notice was issued and served.

So for as the service of notice is concerned, the notice was issued on correct address through registered post as well as another notice with U.P.C. which is not disputed. However, he get notice returned as unclaimed, hence there is presumption of service of notice. Even when the applicant came to know regarding filing of the complaint no step was taken for payment of the amount due against him and for compounding of the offence.

12. In view of the fact   there is no delay either for issuance of notice  or filing of the complaint and as such the present petition is devoid of merit and  it is accordingly rejected.

Order Date :- 26.7.2012

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