IMPORTANT POINT
Dishonour of cheques – Issuance of successive notices is permissible under provisions of Section 138 of N.I. Act.

JUDGMENT :

Dr. Dhananjaya Y. Chandrachud, J.

1. Delay condoned.

2. Leave granted.

3. This appeal arises from a judgment of a learned Single Judge of the High Court of Judicature at Patna dated 10 May 2018 by which an order taking cognizance of an offence under Section 138 of the Negotiable Instruments Act, 1888, [“Act”] has been quashed.

4. The facts, briefly stated, are thus:

5. The dispute arises over two cheques drawn on the State Bank of India in the amount of Rs 36,00,000 and Rs 13,00,000 which were returned unpaid under a memo issued by the UCO Bank, Begusarai on 20 November 2015. The appellant received the memo on 4 December 2015. Following this, a legal notice was issued on 31 December 2015 intimating the dishonour of the cheque. According to the appellant, between 14 February 2016 and 23 February 2016, he made queries with the postal department but no proof of service was provided. Accordingly, on 26 February 2016, a second legal notice was issued. This was replied to by the second respondent on 2 March 2016. Eventually, a complaint under Section 138 was instituted on 11 May 2016.

6. The Chief Judicial Magistrate, Begusarai by an order dated 14 July 2016, condoned the delay in filing the complaint. While taking cognizance, the CJM issued summons to the second respondent. The second respondent instituted revisional proceedings before the Sessions Judge which were rejected on 8 March 2017. In a further recourse to the High Court under Section 482 CrPC, the learned Single Judge held that the complaint under Section 138 was not filed within the statutory period of thirty days prescribed under Section 138 as a result of which the proceedings were quashed.

7. Assailing the judgment of the High Court, Mr. Nagendra Rai, learned Senior Counsel submitted that in MSR Leathers v. S. Palaniappan, (2013) 1 SCC 177 a three judge Bench of this Court has taken the view that the issuance of successive notices is permissible under the provisions of Section 138 having regard to the object of the legislation. Moreover, the learned Senior Counsel submitted that the delay in the institution of the complaint was condoned by the CJM under Section 142. Hence, there was an error on the part of the High Court in quashing the proceedings.

8. On the other hand, Mr. Jay Savla, learned Senior Counsel appearing on behalf of the second respondent submitted that:

(i) The second legal notice dated 26 February 2016 was sent beyond a period of thirty days of the receipt of the memo of dishonour on 4 December 2015 and hence cannot be the basis of a valid institution of a criminal complaint;

(ii) If at all, the complaint could have only been instituted on the basis of the first legal notice dated 31 December 2015 which was within thirty days of the receipt of the memo of dishonour;

(iii) The complaint which was lodged on 11 May 2016 was beyond the stipulated period from the date of issuance of the first notice;

(iv) The CJM had condoned the delay which had occurred in the institution of the complaint only for the period after 6 April 2016 after the issuance of the second notice; and

(v) In the decision of the three judge Bench in MSR Leathers (supra), there was a re-presentation of the cheque as a result of which, a fresh notice was held to be within the ambit of the law.

9. Section 138 provides thus:

“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