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SUPREME COURT OF INDIA
K.S. RADHAKRISHNAN & A.K. SIKRI, JJ.
Kamlesh Kumar
Versus
State of Bihar & Another
Criminal Appeal No. 2083 of 2013 (Arising out of SLP(Criminal) No. 10056 of 2012)
Decided On : 11-12-2013
Held: In the present case, the complainant had not filed the complaint on the dishonor of the cheque in the first instance, but presented the said cheque again for encashment. This right of the complainant in presenting the same very cheque for the second time is available to him under the aforesaid provision. This aspect is already authoritatively determined by this Court in MSR Leathers vs. S.Palaniappan & Anr. (2013) 1 SCC 177. Specific question which was formulated for consideration by the Court and referred to three Judge Bench in that case.
To this extent, there cannot be any quarrel and the act of the complainant in presenting the cheque again cannot be questioned by the appellant. However, we find that when the cheque was presented second time on 10.11.2008 and was returned unpaid, legal notice for demand was issued only on 17.12.2008 which was not within 30 days of the receipt of the information by him from the Bank regarding the return of the cheque as unpaid. Non-issuance of notice within the limitation prescribed has rendered the complaint as not maintainable.
In MSR Leathers (supra), this Court analyzed the provisions of Sections 138 and 142 of the N.I. Act in the following manner:
“The proviso to Section 138, however, is all important and stipulates three distinct conditions precedent, which must be satisfied before the dishonor of a cheque can constitute an offence and become punishable. The first condition is that the cheque ought to have been presented to the bank within a period of six months from the date on which it is drawn or within the period of of its validity, whichever is earlier. The second condition is that the payee or the holder in due course of the cheque, as the case may be, ought to make 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. The third condition is that the drawer of such a cheque should have failed to make payment of the said amount of money to the payee or as the case may, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. It is only upon the satisfaction of all the three conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and (c) thereof that an offence under Section 138 can be said to have been committed by the person issuing the cheque. Section 142 of the Negotiable Instruments Act governs taking of cognizance of the offence and starts with a non obstante clause. It provides that 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, by the holder in due course and 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. In terms of clause (c) to Section 142, no count inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class is competent to try any offence punishable under Section 138. A careful reading of the above provisions makes it manifest that a complaint under Section 138 can be filed only after cause of action to do so has accrued in terms of clause (c) of the proviso to Section 138 which, as noticed earlier, happens no sooner than when the drawer of the cheque fails to make the payment of the cheque amount to the payee or the holder of the cheque within 15 days of the receipt of the notice required to be sent in terms of clause (b) of the proviso to Section 138 of the Act. The presentation of the cheque and dishonor thereof within the period of its validity or a period of six months is just one of the three requirements that constitutes “cause of action” within the meaning of Sections 138 and 142 (b) of the Act, an expression that is more commonly used in civil law than in penal statutes. For a dishonor to culminate into the commission of an offence of which a court may take cognizance, there are two other requirements, namely, (a) service of a notice upon the drawer of the cheque to make payment of the amount covered by the cheque, and (b) failure of the drawer to make any such payment within the stipulated period of 15 days of the receipt of such a notice. It is only when the said two conditions are superadded to the dishonor of the cheque that the holder/payee of the cheque acquires the right to institute proceedings for prosecution under Section 138 of the Act, which right remains legally enforceable for a period of 30 days counted from the date on which the cause of action accrued to him. Therefore, there is, nothing in the proviso to Section 138 or Section 142 for that matter, to oblige the holder/payee of a dishonoured cheque to necessarily file a complaint even when he has acquired an indefeasible right to do so. The fact that an offence is complete need not necessarily lead to launch of prosecution especially when the offence is not a cognizable one. It follows that the complainant may, even when he has the immediate right to institute criminal proceedings against the drawer of the cheque, either at the request of the holder/payee of the cheque or on his own volition, refrain from instituting the proceedings based on the cause of action that has accrued to him. Such a decision to defer prosecution may be impelled by several considerations but more importantly it may be induced by an assurance which the drawer extends to the holder of the cheque that given some time the payment covered by the cheques would be arranged, in the process rendering a time-consuming and generally expensive legal recourse unnecessary. It may also be induced by a belief that a fresh presentation of the cheque may result in encashment for a variety of reasons including the vicissitudes of trade and business dealings where financial accommodation given by the parties to each other is not an unknown phenomenon. Suffice it to say that there is nothing in the provisions of the Act that forbids the holder/payee of the cheque to demand by service of a fresh notice under clause (b) of the proviso to Section 138 of the Act, the amount covered by the cheque, should there be a second or a successive dishonor of the cheque on its presentation.”
It is thus clear that period of limitation is not to be counted from the date when the cheque in question was presented in the first instance on 25.10.2008 or the legal notice was issued on 27.10.2008, inasmuch as the cheque was presented again on 10.11.2008. For the purposes of limitation, in so far as legal notice is concerned, it is to be served within 30 days of the receipt of information by the drawyee from the bank regarding the return of the cheque as unpaid. Therefore, after the cheque is returned unpaid, notice has to be issued within 30 days of the receipt of information in this behalf. That is the period of limitation provided for issuance of legal notice calling upon the drawer of the cheque to make the payment. After the sending of this notice 15 days time is to be given to the noticee, from the date of receipt of the said notice to make the payment, if that is already not done. If noticee fails to make the payment, the offence can be said to have been committed and in that event cause of action for filing the complaint would accrue to the complainant and he is given one month time from the date of cause of action to file the complaint. We have, thus, no hesitation in allowing this appeal and setting aside the impugned order of the High Court. As a consequence, petition filed by the petitioner under Section 482, Cr.P.C. is also allowed and the complaint of the complainant is Dismissed.
Result: Quashing petition allowed.
Based on the provided legal document, the key points are as follows:
The right of the complainant to present the same cheque multiple times within the validity period is permissible and established by law (!) (!) .
The period of limitation for filing a complaint under Section 138 of the Negotiable Instruments Act is not counted from the initial presentation of the cheque but from the date the bank informs the drawer of the dishonor (!) (!) .
The legal notice for demand must be issued within 30 days of receipt of the information from the bank regarding the dishonor of the cheque (!) (!) .
After the dishonor of the cheque, the notice period and the subsequent failure to make payment within 15 days are essential for establishing the cause of action (!) (!) .
The complaint becomes not maintainable if the legal notice is issued beyond the prescribed 30 days from the receipt of information about the dishonor (!) (!) .
The date on which the complainant received information about the dishonor (whether from the bank memo or via other means) is crucial for determining whether the legal notice was issued timely (!) (!) (!) .
In the case at hand, the complainant was found to have received information about the dishonor on the date of the second presentation, and the legal notice was issued after the expiry of the 30-day period, rendering the complaint not maintainable (!) (!) .
The act of presenting the cheque again after the initial dishonor is lawful and does not affect the validity of the subsequent legal proceedings, provided the legal notice and other conditions are met within the prescribed time frames (!) (!) .
In summary, the legal document emphasizes the importance of timely legal notice following the dishonor of a cheque, the permissible multiple presentations of the same cheque within its validity, and the critical nature of the date of receipt of information about dishonor for the purpose of limitation. Failure to adhere to these procedural requirements results in the dismissal of the complaint.
JUDGMENT :
A.K. Sikri, J.
1. Leave granted.
2. The appellant herein is facing trial in the complaint filed by respondent No.2 under Section 138 of the Negotiable Instruments Act (N.I. Act for short). According to the appellant, criminal complaint is not maintainable and no such proceedings could be launched against him. He, therefore, approached the High Court of Judicature at Patna in the form of a petition under Section 482 of the Cr.P.C. for quashing of the order dated 28.10.2009 whereby the Court of Magistrate had taken cognizance of the complaint filed by the respondent No.2 issued summons to the appellant. This petition, however, has been dismissed by the High Court vide impugned judgment dated 1.11.2012. The solitary reason given by the High Court while dismissing the petition is that trial has already commenced and two witnesses have already been examined and discharged. Hence, at this stage it would not be proper to interfere with the trial. Various contentions which were raised by the appellant questioning the very maintainability of the complaint under Section 138 of the N.I. Act are not gone into by the High Court with the observations that those contentions would be available to the appellant before the trial court, subject to the rebuttal of respondent No.2.
3. Mr. Mishra, learned senior counsel appearing for the appellant submitted that even on admitted facts the complaint was untenable as it was clearly time barred and not filed within the stipulated period prescribed in law and therefore the High Court could not have scuttled the issue raised by the appellant by merely relegating the appellant to the trial court when the issue could be decided on the admitted facts on records. He, further, submitted that the appellant had approached the High Court without loss of any time and if during the pendency of the petition filed by the appellant under Section 482, Cr.P.C., two witnesses had been examined in the meantime, that factor could not have weighed against the appellant.
4. In order to understand the controversy, we may give basic facts which are undisputed.
5. The complaint under Section 138 of the N.I. Act is filed by respondent No.2 on the basis of cheque bearing No.003285 drawn on Bank of India, Mahua Branch where the appellant holds Bank Account bearing No.23371. This cheque was for a sum of Rs.3,45,000/-. The complainant had presented this cheque on 25.10.2008 which was returned dishonoured by the Bank. The defence on merits set up by the appellant is that he is a doctor by profession who is having his private practice. He found that certain cheques, some signed and some unsigned, were missing from his clinic in December 2006 in respect to which he had even given information to the Sub-Divisional Officer, Mahua, on 30th December 2006. Cheque No. 003285 was also one of those stolen cheques. We have stated this defence of the appellant just for record and are not going into this explanation of the appellant or influenced by it. We only tend to examine as to whether on admitted events, complaint is not maintainable.
6. The cheque in question was presented on 25.10.2008. After it was dishonoured, complainant issued notice dated 27.10.2008 to the appellant. The appellant did not accede to the demand contained in the said notice. Even the complainant chose not to file any complaint under Section 138 of the N. I. Act at that time. Instead, he presented same very cheque again for encashment through his banker on 10.11.2008. It bounced this time as well because of insufficient funds. Another legal notice dated 17.12.2008 was sent to the appellant. As this legal notice also did not invoke any positive response from the appellant, this time the complainant filed the complaint dated 7.01.2009. The summary of the aforesaid events, accordingly, is as under:-
7. On the basis of the aforesaid facts, the submission of Mr. Mishra was that the complaint was not filed within the limitation prescribed under Section 138 rea
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