Prashant vs S.K. Sarkar
2002 Latest Caselaw 87 Bom

JUDGMENT

1. Heard Mrs. Shinde, learned Counsel for the applicant and Shri S.D. Dewani, learned Advocate for the non-applicant.

2. The revision is directed against the judgment and order dated 04.12.2000 passed by the Vth Additional Sessions Judge, Nagpur in Criminal Revision No. 306 of 2000 whereby Additional Sessions Judge allowed the same.

3. Mrs. Shinde, learned Counsel for the applicant, contended that the applicant/complainant filed a complaint under Section 138 of the Negotiable Instruments Act (for the sake of brevity, it will be referred as an Act) against the non-applicant in the Court of Judicial Magistrate First Class, Corporation Court No.1, Nagpur, who was pleased to summon the non-applicant/accused to defend the charge alleged and levied against him.

4. It is contended that the non-applicant/ accused on 21.01.2000 moved an application below Exhibit-15 before the Judicial Magistrate First Class for quashing the proceedings against him on the ground that there was no legal notice issued by the applicant after dishonour of the cheques demanding the money to be paid to the applicant involved in the cheques. The Judicial Magistrate First Class vide order dated 31st March 2000 rejected the application of the non-applicant /accused for quashing of the proceedings/recalling of process. Being aggrieved by the same, the non-applicant /accused filed a revision application No. 306 of 2000 before the Sessions Judge, Nagpur, challenging the validity of the order dated 31st March 2000 passed by the Judicial Magistrate First Class. Same has been allowed by the learned Additional Sessions Judge and quashed the complaint under Section 138 of the Act and discharged the accused of the offence under Section 138 of the Act. Being aggrieved by this order, the applicant/complainant filed the present revision application before this Court under Section 482 of the Code of Criminal Procedure. Before we come to the issue in question, it will be appropriate to consider some of the facts which are as follows.

5. The applicant (original complainant) had advanced an amount of Rs.1,75,000/- to the non-applicant (accused), who promised to return it within six months. Since there was no response from the non-applicant in this regard, the applicant approached to the non-applicant on many occasions and requested him to return the amount of Rs.1,75,000/-. The non-applicant, therefore, issued four post dated cheques - Rs. 50,000/- dated 30.05.1998; Rs.50,000/- dated 02.06.1998; Rs.50,000/- dated 05.06.1998; and Rs.25,000/- dated 07.06.1998 in favour of the applicant. All these cheques were drawn on UCO bank, Nehru Nagar Branch, Bhilai.

 6. All  these  cheques  were deposited in the bank by the applicant on the respective  dates.    Since the  cheques  were from out station, it took a long time for clearance.  However, at the later point of time, the cheques were dishonoured and returned with  the  remarks "funds insufficient".   The cheques were presented again on 12.08.1998 and 14.08.1998.  However, the cheques were again dishonoured for the same reason. 
 

 7. The    applicant   issued   letter   dated 12.10.1998  to  the  non-applicant  in  which   it   was mentioned  by  the  applicant  that  an  amount  of  Rs. 1,75,000/- was paid to the non-applicant  as  hand  loan since  the  non-applicant was in urgent need of money in July 1996.  The applicant further  stated  in  the  said letter that the four cheques issued by the non-applicant in all  amounting  to  Rs.  1,75,000/- were presented on the respective dates in the  bank.    However,  all  the above cheques  were dishonoured.  The cheques were again presented in the bank on 12.08.1998  and  14.08.1998  on the request  of  the  non-applicant.  However, this time also the cheques were dishonoured.  The  information  in this regard was provided by the bank to the applicant on 04.09.1998.   The  last  para  of the letter reads thus, "that since I am in the urgent  need  of  money  I  once again request you to good the payment". 
 

 8. The  non-applicant,  however,  refused  to accept  the  letter  and  the  same was returned as "not claimed" and the postal communication in this regard was received by the applicant on 16.11.1999.  The  applicant was  given  assurance  by  the non-applicant that if the cheques are again presented to the bank  same  would  be honoured  and,  therefore,  the  applicant presented the cheques again on 28.10.1998 bearing No. 481572  for  Rs. 50,000/-  and  another cheque bearing No. 481573 for Rs. 50,000/-.  However, same were returned by  the  bank  to the  applicant  with the endorsement "payment stopped by the drawer".  The  information  regarding  dishonour  of cheques was received by the applicant on 26.11.1998 from the bank.    The  applicant,  in the meanwhile, received telegram  dated  21.10.1998  from   the   non-applicant, denying  having borrowed any money and the applicant was informed  not  to  present  cheques  in  the  bank   for clearance without consulting him. 
 

 9. The   applicant  served  statutory  notice dated  03.12.1998  on  the   non-applicant/accused   and demanded    repayment    of   Rs.1,75,000/-   from   the non-applicant within 15 days from the  receipt  of  this notice  and it was also informed by the applicant to the non-applicant that if the non-applicant  fails  to  make the  repayment,  the applicant would proceed against the non-applicant in the Court of law.  The said notice  was also returned  as  "not  claimed"  on  19.12.1998.   The non-applicant neither returned  the  amount  within  the stipulated  period  of 15 days nor gave any reply to the said notice.    The  applicant  has,  therefore,   filed Complaint No.    743 of 1998 under Section 138 read with Section 142 of the Negotiable Instruments Act as well as under Section 420 of the Indian  Penal  Code. 
 

 10. On  the  backdrop  of  these  facts,  Mrs. Shinde, learned Counsel for the applicant contended that the statutory notice contemplated under Section  138  of the  Act  was  issued  by  the  applicant on 03.12.1998, demanding the repayment of the amount in question.   The postal  endorsement shows that same has "not claimed" by the non-applicant on 19.12.1998.  It is  contended  that though  the  non-applicant  did  not claim the statutory notice dated 03.12.1998, it can be treated  as  a  valid service  of notice on the non-applicant under sub Clause (b) to the proviso of Section 138 of the Act and it must be  treated  that  the  same  was  duly  served  on  the non-applicant on  19.12.1998.    It is further contended that as per clause (c) to the proviso of Section 138  of the  Act,  the  drawer  of such 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 fifteen days of the receipt of the said  notice,  the  complaint for the offence under the Negotiable Instruments Act can be  filed  within  one  month from the date on which the cause of action arises  under  sub  clause  (c)  of  the proviso to Section 138 of the Act.  It is contended that the  non-applicant  was  required  to  make  the payment within fifteen  days  from  19.12.1998.      Since   the repayment  of the amount in question was not made by the non-applicant within such period,  the  applicant  filed the  complaint in the Court of Judicial Magistrate First Class on 28.12.1998 which is well within  limitation  as contemplated by sub clause (b) of Section 142 of the Act and  hence  same  is  not  barred  by  limitation and ismaintainable in law. 
 

 11. Mrs.   Shinde,  learned  Counsel  for  the applicant, contended that communication dated 12.10.1998 cannot be construed  as  statutory  notice  contemplated under Section  138  of  the  Act.    Communication dated 12.10.1998 is a letter simpliciter whereby there  is  no specific demand as such made by the applicant for refund of amount  of Rs.1,75,000/-.  However, the non-applicant was merely requested in this regard.  Therefore,  it  is contended  that the cause of action cannot be said to be accrued as contemplated under  sub  clause  (c)  of  the proviso  to Section 138 of the Act, on the date the said letter was not claimed  by  the  non-applicant  and  the limitation  for  filing  complaint as contemplated under sub clause (b) of  Section  142  of  the  Act  will  not commence from  such  date.    It  is  contended that the approach adopted  by  the  learned  Additional  Sessions Judge  in  this regard was not proper and findings given on the issue, therefore, are not correct. 
 

 12. Mrs.   Shinde  further  vehemently  argued that  the limitation for filing complaint in the instant case would start from the date of statutory notice dated 03.12.1998 issued by the applicant which was not claimed by the non-applicant on 19.12.1998.  The cause of action would  arise  on  expiration  of   fifteen   days   from 19.12.1998  since  the  payment  was  not  made  by  the non-applicant and the  limitation  would  commence  from that  date,  and  within  one  month  the  applicant  is entitled to file complaint under Section 138 of the Act. In the instant case, the applicant filed a complaint  on 28.12.1998   and,   therefore,   same   is  well  within limitation and is maintainable in law.  It is  contended that  the  reasoning  given  by  the Additional Sessions Judge is bad in law and cannot be sustained.   In  order to  substantiate  the contentions, reliance is placed on the judgments of the Apex Court in  K.    Bhaskaran  .v. V.Sankaran  Vaidhyan  Balan and another ();  Hiten  P.    Dalal  .v.    Bratindranath Banerjee () and M/s.  Dalmia Cement (Bharat) Limited .v.  M/s.   Galaxy  Traders  and Agencies  Limited  and others (reported in 2001 Cri.L.J. 972). 
 

 13. Shri  Dewani,  learned  Counsel  for   the non-applicant,  supported  the  impugned order dated 4th December 2000, passed by the Additional  Sessions  Judge and  contended  that there is no specific form or format provided under Section 138 of the Act in respect of  the notice  required to be issued by the payee to the drawer of the cheque.  It is contended that  the  communication dated  12.10.1998  issued by the applicant is the notice under the provisions of Section 138 of the Act  and  the fifteen  days  limitation  contemplated  for  repayment under clause (b) of Section 138 of the Act has commenced on 14.10.1998 i.e.  the date on which the notice has not been claimed by the non-applicant which is apparent from the postal endorsement  and  the  cause  of  action  for filing  complaint  has  arisen in the present case after completion  of  fifteen  days   from   14.10.1998   i.e. 29.10.1998  and  the  applicant  was  required to file a complaint  within  one   month   from   said   date   as contemplated  in  clause  (b) of Section 142 of the Act. It is contended that in the instant case  the  complaint is   filed   much   beyond  period  of  limitation  i.e. 28.12.1998 and,  therefore,  the  revisional  Court  was justified in   quashing   the   same.      In  order  to substantiate the contentions, the reliance is placed  on the  judgment  of  the  Supreme Court in Central Bank of India and another .v.  Saxons Farms and others (reported in 2000 (1) Mh.L.J.  366) and  the  judgment  of  Kerala High Court in Revathi .v.  Asha Bagree (reported in 1992 (1) Crimes 743). 
 

 14. I   have  given  anxious  thought  to  the various contentions canvassed by the respective  counsel and  also  perused  the  provisions  of  the Act and the judgments  cited  and  referred  to  by  the  respective counsel in  support  of  their  contentions. 
 

 15. Before  I  adjudicate  on  merits  of  the matter, it will be appropriate to consider the scheme of provisions  of Section 138 as well as Section 142 of the Act.  Section 138 is incorporated in Chapter XVII of the Act which deals with penalties in case of  dishonour  of certain  cheques  for  insufficiency  of  funds  in  the accounts.  Section 138  of  the  Act  contemplates  that where  any  cheques  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 the 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.   Proviso to the said section contemplates that the person can be charged with the offence under Section 138 only when such cheque has been presented to the bank by the payee within a period of six months from the date on which it  is  drawn  or  within  the  period  of  its validity, whichever is earlier as contemplated by clause (a) of  the  proviso.    The  payee or the holder in due course of the cheque, 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, as contemplated under clause (b) of the said proviso; and the drawer  of such cheque fails to make the payment of the said amount of money to the payee within fifteen days of the receipt of the said notice, as contemplated in clause (c) of the proviso, the payee is entitled to file a complaint under Section 138 of the Act against such drawer. 
 

 16. It  is, therefore, evident that the cheque issued  by  the  drawer  to  the  payee  should  be  for discharge  of  any  debts,  liability  and  it  must  be returned to the payee by the bank with  the  endorsement that  the cheque is returned for insufficiency of funds. However,   when   the   cheque   is   dishonoured    for insufficiency  of  funds  and before filing of complaint against the drawer for the  offence  under  Section  138 certain   statutory   formalities  are  required  to  be complied with by the payee are provided in  the  proviso to Section  138  of  the  Act.    There  are three basic requirements in  this  regard,  (i)  the  payee  has  to present  the  cheque  to the bank during the validity of the same i.e.  either six months or within the period of its validity whichever is earlier;  (ii)  the  payee  is required to issue notice in writing to the drawer within fifteen  days  of  the receipt of the information by him from the bank demanding the payment regarding return  of cheque as unpaid; and (iii) if the drawer of such cheque fails  to make the payment of the amount of money to the payee within fifteen  days  from  the  receipt  of  such notice,  the  payee  is  entitled  to  file  a complaint against such drawer for the offence under Section 138 of the Act. 
 

 17. The limitation for filing  such  complaint is provided  in  Section  142  of  the Act.  Section 142 contemplates that no Court shall take cognizance of  any offence  punishable  under  Section  138  except  upon a complaint, in writing, made  by  the  payee  within  one month  of  the  date on which the cause of action arises under clause (c) of the proviso to Section  138  of  the Act. 
 

 18. The cause of action contemplated under the provisions  of  clause  (c)  would accrue immediately on completion of fifteen days in case the drawer  fails  to make  the  payment to the payee and one month limitation for filing complaint under clause (b) of Section 142  of the Act would commence from the 16th day.  The payee has to file  complaint  within one month from said date.  If the payee fails to file complaint within one month  from the  date  cause  of action has accrued to him then such complaint cannot be entertained by the Court since  same would  be  barred  by  limitation  as contemplated under provision of Section  142  of  the  Act.    It  will  be appropriate  to  consider the facts and circumstances of the present case of the above  referred  legal  position vis-a-vis  the  provisions of Section 138 as well as 142 of the Act. 
 

 19. Sub clause (b) of the proviso  to  Section 138  of  the  Act  only  requires  notice to be given in writing by the payee to the drawer in which there should be a demand made by the payee.   This  clause  does  not prescribe any  form  or  format  for  such  notice.   In absence thereof  what  has  been  contemplated  by  this clause  is, the communication in writing by the payee to the drawer asking the drawer to pay the amount  involved in the cheque which is dishonoured. 
 

 20. The    crucial    question   which   needs consideration by this Court involved in the present case is  as  to  whether,  the   communication/letter   dated 12.10.1998   issued   by   the  applicant/payee  to  the non-applicant demanding repayment of Rs.  1,75,000/- can be construed as statutory notice contemplated by  clause (b)  of  the proviso to Section 138 of the Act or notice dated 03.12.1998 issued by the payee to the  drawer  can be  said  to be the statutory notice under clause (b) of the proviso to Section 138 of the Act. 
 

 21. The   recitals   in   the   letter   dated 12.10.1998  would show that all the material particulars are mentioned by the applicant/payee in the said letter. The applicant requested the non-applicant/drawer to make the payment  of  Rs.1,75,000/-  since  all  the  cheques issued   by   the   drawer   for   the   amount  of  Rs. 1,75,000/were dishonoured by the bank even  though  they were  again  presented to the bank for encashment on two occasions.  The letter/communication  dated  12.10.1998, in  view  of the recitals therein, in my opinion, can be construed as notice contemplated under sub clause (b) of the proviso to Section 138 of the Act.    The  applicant has  given reference to the fact of dishonour of cheques in the said letter.  Same is in writing and  the  amount is also  demanded  by  the applicant.  All these factors fulfill the requirement of notice contemplated in clause (b) and, therefore, I have no hesitation  to  hold  that the communication/letter dated 12.10.1998 is in fact can be  construed  as  notice  provided in clause (b) of the proviso to Section 138 of the Act. 
 

 22. As far as the notice dated  19.12.1998  is concerned,  same  is  a  subsequent communication by the applicant to the  non-applicant/drawer  reiterating  the same  demand of return of money made by the applicant in the notice  dated  12.10.1998.    The  only   difference between  these  two  communications is the communication dated 19.12.1998 is in the form of statutory  notice  as such  and  the earlier communication dated 12.10.1998 is in the form of letter.    As  I  have  already  observed hereinabove,  the provisions of the Act does not provide any form in which the notice  or  the  communication  is required to  be  sent  by  the  payee.  What is required under the provisions of the Act,  is  the  communication which  should be in writing, sent within fifteen days of the receipt of the information by  the  payee  from  the bank regarding return of the cheques as unpaid and payee must  demand  repayment  of  amount of money and nothing else.  All these ingredients are very much there in  the communication  dated  12.10.1998  and, therefore, I have already held that this communication can be construed as notice contemplated by clause  (b)  of  the  proviso  to Section 138 of the Act. 
 

 23. The  next  crucial  question  needs  to be decided is at what point of time  the  cause  of  action would  accrue  to  the  applicant  for  filing complaint against the non-applicant under Section 138 of the  Act. In the instant case, the notice dated 12.10.1998 was not claimed  by  the  non-applicant on 14.10.1998 and when a notice is returned as "not claimed" such date  would  be the  commencing  date  in counting the period of fifteen days contemplated  in  clause  (c)  of  the  proviso  to Section 138 of the Act.  This aspect is concluded by the judgment of   the  Apex  Court  in  K.    Bhaskaran  .v. V.Sankaran Vaidhyan Balan and another (supra).  In  para 25 of this judgment, the Apex Court observed thus :- 
  "Thus  when  a notice is returned by the  sendee  as  unclaimed  such  date would be the commencing date in reckoning the  period  of  15  days contemplated in Clause (d) to the proviso of Section  138 of the  Act.    Of  course such reckoning would be without prejudice to  the  right of  the drawer of the cheque to show that he had no knowledge that the  notice  was brought to his address." 
 

In view of the ratio laid down by the Apex Court, the period of limitation of fifteen days contemplated in clause (c) was commenced on 14.10.1998, the date on which the drawer has not claimed the notice dated 12.10.1998 and since the drawer fails to make the payment within fifteen days the cause of action would accrue to the applicant immediately after expiration of 15th day from 14.10.1998 i.e. 29.10.1998. The period of limitation of one month for filing complaint in the instant case, in view of the facts referred to hereinabove commenced on 29.10.1998 and within one month from 29.10.1998, the complaint was required to be filed by the applicant under the provisions of clause (b) of Section 142 of the Act. It is not disputed that in the instant case, the complaint is filed on 28.12.1998 i.e. undoubtedly beyond the period of limitation.

24. As far as the judgment of the Apex Court in Hiten P. Dalal .v. Bratindranath Banerjee (supra) is concerned, same is in the different set of facts and the ratio of the said decision does not further the case of the applicant since in the present case issue pertains to the aspect of notice contemplated under Section 138 and the limitation for filing complaint contemplated under Section 142 of the Act.

25. Similarly, the another judgment of the Apex Court in M/s. Dalmia Cement (Bharat) Limited .v. M/s. Galaxy Traders and Agencies Limited and Ors. (supra) is concerned, I fail to see how the ratio in the said judgment would benefit the contentions canvassed by the learned Counsel for the applicant, particularly in view of the observations in para 7 of the judgment, which reads thus :-

"In Sadanandan Bhadran .v. Madhavan Sunil Kumar , this Court held that clause (a) of the proviso to Section 138 did not put any embargo upon the payee to successively present a dishonoured cheque during the period of its validity. On each presentation of the cheque and its dishonour a fresh right and not cause of action accrues. The payee or holder of the cheque may, therefore, without taking pre-emptory action in exercise of his right under clause (b) of Section 138 of the Act, go on presenting the cheque so as to enable him to exercise such right at any point of time during the validity of the cheque. But once a notice under clause (b) of Section 138 of the Act is received by the drawer of the cheque, the payee or the 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. This Court emphasised that "needless to say the period of one month from filing the complaint will be reckoned from the date immediately falling the day on which the period of 15 days from the date of the receipt of the notice by the drawer expires."

The observations of the Apex Court in the above referred para would show that once the notice under clause (b) of Section 138 of the Act was received by the drawer of the cheque, the payee forfeits his right to again present the cheque as the cause of action is 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. On the other hand, the observations in para 7 are beneficial to the case of the non-applicant and, therefore, the contentions canvassed by the learned Counsel for the applicant in this regard cannot be accepted.

 26. As far as the case of K.    Bhaskaran  .v. V.Sankaran   Vaidhyan   Balan  and  another  (supra)  is concerned, in view of observations in para  25  also  do not  further  the  case  of  the applicant and hence the contentions canvassed by the counsel for  the  applicant in this regard also cannot be accepted. 
 

 27. For  the  reasons  stated hereinabove, the Criminal Revision  is  devoid  of  substance  and  hence dismissed.