S.V. Muthye vs State And Anr.
2002 Latest Caselaw 287 Del

JUDGMENT

K.S. Gupta, J.

1. In this petition under Section 482 Cr.P.C., petitioner who is one of the partners of M.P. Agricultural Corporation, Jabalpur seeks quashment of complaint No. 55/1 of 1994 filed under Section 138 of the Negotiable Instruments Act 1872 (for short the 'Act') pending before a Metropolitan Magistrate.

2. Complaint was filed on 1st November 1994 by respondent No. 2 alleging that Fairfield Engineers (P) Ltd had been supplying accessories and parts including Disel generating sets to the petitioner-accused for which bills / invoices were being raised. Against bill No. 832 dated 22nd October 1993 for Rs. 57,700/- and bill No. 831 dated 22nd October 1993 for Rs. 79,970.20, the petitioner issued cheque Nos. 0957729 dated 10th March 1994 for Rs. 57,700/-, 0957731 dated 15th March 1994 for Rs. 40,000/- and 0957732 dated 20th March 1994 for Rs. 39,970.20 in favor of respondent No. 2. All these cheques were drawn on Bank of Maharashtra, Jabalpur. Said cheque No. 0957729 dated 10th March 1994,on being deposited with the bank on 7th July 1994, was received back unpaid on 29th July 1994 with the remark 'insufficient funds'. Cheque No. 0957731 dated 15th March 1994 was presented for encashment on 9th July 1994 and returned unpaid on 20th July 1994 with the remark 'exceeds arrangement'. Cheque No. 0957732 dated 20th March 1994 presented for encashment on 9th July 1994, was also returned unpaid by the petitioner's banker on 25th July 1994 with the remark 'exceeds arrangement'. It is further alleged that as petitioner had promised on phone to make payments of the amounts of said cheques, respondent No. 2 did not serve demand notice(s) within 15 days of the receipt of intimations regarding dishonour of cheques, on the petitioner. Respondent No. 2 got a legal notice served through counsel on 5th September 1994 on the petitioner calling upon him to make payments of the amounts of said 3 cheques. Petitioner wrote a letter dated 12th September 1994 accepting liability for payments of amounts of these cheques. Respondent No. 2 got another legal notice dated 24th September 1994 served through counsel on account of mistake in the said notice dated 5th September 1994 in mentioning the name of respondent No. 2 wrongly. Petitioner failed to make payments of the amounts covered by the said 3 cheques despite service of the said notice. It was prayed that petitioner be tried and punished for the offences committed.

3. Along with complaint, application under Section 5 of Limitation Act was also filed seeking condensation of delay in question.

4. Considering the statements of witnesses examined under Section 200 Cr.P.C., documents placed on the file as also the allegations made in complaint the petitioner was summoned to face trial for the offence under Section 138 of the act by the order dated 21st May 1998 by the Metropolitan Magistrate seized of the complaint.

5. Only ground pressed before me by Sh. A.P. Dhamija for petitioner was that as legal notice dated 24th September 1994 was not served within 15 days of the receipt of intimations by respondent No. 2 from the bank regarding dishonour of 3 cheques in question, respondent No. 2 did not have cause of action to file the complaint. In support of submission, reliance was placed on the decisions in Shri Vishnu Spinners v. Sri Bhagyalakshmi Commercial Corporation and Anr., 1(1999) BC 516; C. Kalegouda v. S. Sadashivappa, 1998 Cri.L.J. 3539; O.P. Chirania v. Dir of Lotteries and Dy. Secretary to Govt. of Haryana, 1998 IV AD (Delhi) 197; Yoginder Kumar Sharma v. Ashok Kumar Sharma (Shri) and Anr., ; Sadanandan Bhadran v. Madhavan Sunil Kumar, and Sil Import, USA v. Exim Aides Silk Exporters, Bangalore, .

6. As is manifest from complaint the intimation in regard to cheque No. 09757729 dated 10th March 1994 having been returned unpaid was received by respondent No. 2 on 29th July 1994 while with respect to cheque No. 09757731 dated 15th March 1994 on 20th July 1994. Similar intimation concerning cheque No. 09757732 dated 20 March 1994 was received on 25th July 1994. Demand for making payments of the amounts of said cheques within 15 days was thereafter made by the notice dated 24th September 1994. Obviously demand made through this notice was much beyond 15 days time of the receipt of intimations regarding dishonour of said cheques, by respondent No. 2. Relying on the decision in Ram Richhpal Gupta v. DCM Shriram Consolidated Ltd., , the contention advanced by Sh. H.K. Chaturvedi for the said respondent was that the Metropolitan Magistrate had the power to condone the delay in question under Section 473 Cr.P.C. and he will be deemed to have condoned the delay by issuing summons to the petitioner by the order dated 21st May 1998.

7. Section 138 of the Act, which is material, runs as under:-

"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 extend to one year, 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 fperod 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.

Explanation - For the purpose of this section, " debt or other liability" means a legally enforceable debt or other liability."

8. Sub-section (2) of Section 142 provides that a complaint for the offence under Section 138 has to be made within one month of the date on which cause of action arises under Clause (c) of the proviso to Section 138. To be noted that aforementioned decisions pertain to condoning the delay in filing the complaint and not the delay in serving the demand notice under Clause (b) of said Section 138. Serving of notice within 15 days of the receipt of intimation regarding dishonour of cheque by the payee and failure to make payment within 15 days of receipt of notice issued under Clause (b) of Section 138 by the drawer are to precede the filing of complaint under Section 138. In the matter of condoning delay in issuing demand notice beyond the statutory period of 15 days neither Section 473 Cr.P.C. or Section 5 of Limitation Act, 1963 would apply nor such a delay can be legally condoned. Obviously, based on said notice dated 24th September 1994, the respondent No. 2 did not have cause of action for launching the prosecution of petitioner under Section 138. Thus, being abuse of process of court the complaint deserves to be quashed under Section 482 Cr.P.C.

9. Consequently, while allowing the petition, aforesaid complaint No. 55/1 of 1994 pending against the petitioners before a Metropolitan Magistrate at Tis Hazari courts, is quashed.