Bombay High Court
Pharmaceutical Products Of India ... vs Pidilite Finance Limited And ... on 25 January, 2005
Author: R Khandeparkar
Bench: R Khandeparkar
JUDGMENT
R.M.S. Khandeparkar, J.
1. The petitioners challenge the order of issuance of process to the petitioners under Section 138 of the Negotiable Instruments Act on the ground, that in the case in hand, the respondents had accepted the post dated cheques even prior to the service of the notice, issued pursuant to dishonour of the earlier cheque and thereby they had waived their right to institute proceedings under Section 138 of the N.I. Act pursuant to the notice issued to the petitioners.
2. The few facts which are relevant for the decision in the matter are that, the cheque was issued for the sum of Rs. 10,00,000/- by the petitioner No. 1 in favour of the respondent No. 1, on 12.5.1996. On presentation for being encashed, the same was dishonoured on the ground of "Insufficient Funds" to the account of the petitioner No. 1 in the bank on which the said cheque was drawn. The respondent No. 1 issued the notice in terms of provisions of law comprised under Section 138 of the N.I. Act to the petitioners on 28.5.1996, which was received by the petitioners on 1.6.1996. Meanwhile, the petitioners alongwith the forwarding letter dated 23.5.1996 issued five post-dated cheques aggregating to Rs. 10,00,000/- and they were dated 5.6.1996, 20.6.1996, 6.7.1996, 20.7.1996 and 10.8.1996. The said letter and the cheque were duly received by the respondent No. 1. The respondent No. 1 encashed the cheques dated 5.6.1996 and 20.6.1996 aggregating to the sum of Rs. 4,00,000/- as they were honoured on being presented for encashment. However, when the cheque dated 6.7.1996 was presented, the same was dishonoured. The respondent No. 1 also received the letter dated 4.7.1996 from the petitioners informing the respondent No. 1 not to present the cheque dated 6.7.1996. The said letter however, was received after presentation of the said cheque dated 6.7.1996 for encashment and having dishonoured. All these facts are apparent from the complaint filed by the respondent No. 1 under Section 138 of the N.I. Act.
3. From the facts narrated in the complaint, therefore, it is apparent that the initial cheque for the sum of Rs. 10,00,000/- issued on 6.5.1996 when presented for encashment was dishonoured on 7.5.1996. Undoubtedly, consequent to such dishonour, right had accrued in favour of the respondent No. 1 to issue a notice to the petitioners calling upon them to pay the entire amount payable under the said cheque within a period of 15 days from the date of receipt of such notice. Undisputedly, such notice was issued by the respondent No. 1 on 28.5.1996 and was received by the petitioners on 1.6.1996. At the same time, the complaint, as already observed above, discloses the receipt of post dated cheques for the total value of Rs. 10,00,000/- as well as the letter dated 4.7.1996. Out of those cheques, two cheques dated 5.6.1996 and 20.6.1996 were encashed by the respondent No. 1. Such encashment was for the total amount of Rs. 4,00,000/-.
4. What follows from the above fact is that though pursuant to the cheque of Rs. 10,00,000/- which was dishonoured, the notice was issued on 20.5.1996 informing about the dishonour of the cheque to the petitioners, even before the receipt of such notice, the petitioner had sought to tender the post dated cheques or the total amount of Rs. 10,00,000/-. Did it amount to waiver of right to prosecute the petitioner under Section 138 of the said Act in relation to the original cheque?
5. The provisions of law comprised under Section 138 of the N.I. Act nowhere speak about taking away of the right of the holder of the cheque, once there is a default in the form of dishonour of the cheque issued by the drawer, and failure to pay the amount within fifteen days from the receipt of the notice intimating such dishonour of the cheque. Undisputedly, post dated cheques were issued prior to the issuance of notice informing about dishonour of the original cheque. In such circumstances, whether acceptance of post dated cheques prior to issuance of notice would amount to waiver of right to lodge the complaint, particularly in the facts of the case wherein all the post dated cheques are not encashable within the period of fifteen days from the receipt of the notice, besides being that some of those cheques also bounced, and same will have to be decided on merits of the case after recording of the evidence in the matter.
6. The right to initiate prosecution under Section 138 of the said Act arises moment there is non compliance of the notice issued on bouncing of the cheque within the period of fifteen days from the date of receipt of such notice. It is to be noted that the expression under Section 138(c) relating to the amount to be paid on receipt of the notice is "the said amount of money" which obviously relates to the amount payable under the cheque which had bounced. Therefore, merely because a part of such amount payable under the cheque is paid either prior to receipt of the notice, that by itself will not wipe out the Criminal liability incurred by the drawer on account of his failure to pay the entire amount payable under the cheque within fifteen days from the receipt of the notice.
7. Needless to say, all the above observations are for the purpose of considering whether there is any case made out at this stage for interference in the proceeding before the learned Magistrate in the criminal case filed under Section 138 of the Negotiable Instrument Act and whether the exercise of writ jurisdiction the interference in the impugned order issuing the process is warranted.
8. The complaint on the face of it make out a clear case for issuance of process under Section 138 of the N.I. Act, and therefore, there is no case for interference in the impugned order in exercise of writ jurisdiction under Article 227 of the Constitution of India and hence the petition is dismissed. Rule discharged with no order as to costs.
