The main legal point established in the judgment is that the prosecution based on the second or successive dishonour of a cheque is permissible under S.138 of the Negotiable Instruments Act, and the right of the holder to present the cheque for encashment on multiple occasions within a specified period is valid.

1. The petitioner, shown as an accused, in a private complaint filed by the respondent, alleging commission of an offence under S. 138 of the Negotiable Instruments Act, 1881 (for short, ‘the Act’), filed this petition by contending that the complaint is not maintainable and no such proceeding could be launched against him. This petition was filed under S.482 of Cr. P.C., to quash the entire proceedings in PCR No. 15347/2014 pending on the file of the XXVCII ACMM, Bengaluru.

2. Background facts, sans unnecessary details are as under:

In the complaint, the respondent herein has alleged that the petitioner had received from his Rs. 20,67,000/-, in the matter of arranging a loan of Rs. 15,00,00,000/- and as the loan could not be arranged, when the said amount was sought to be returned, issued four cheques of Rs. 4,00,000/- each, drawn on Corporation Bank, R.T. Nagar, Bengaluru – 32 and agreed to pay in due course, the balance of Rs. 4,67,000/- in cash or by cheque. The cheque when presented for encashment were dishonoured by the said bank and a demand notice dated 05.04.2011 was given, to pay the amount. It was alleged that in view of the request made by the petitioner to re-present the cheque again for encashment by assuring that the cheque will be honoured by his Bank, the cheque was again re-presented for encashment. The cheque was again dishonoured on 20.05.2011, for the reason ‘funds insufficient’. After causing a demand notice dated 03.06.2011 and payment of the cheque amount having not been made, complaint was filed before the Judicial Magistrate at Ernakulam. The complaint having been returned by making reference to the decision in DASHRATH RUPSINGH RATHOD Vs. STATE OF MAHARASHTRA AND OTHERS, 2014 AIR SCW 4798 and the complaint having been presented before the XXVII ACMM, Bengaluru and registered as PCR No. 15374/2014, this petition was filed, for grant of the aforesaid relief.

3. Sri H. Shanthi Bhushan, learned advocate, contended that the respondent having given a legal notice on 05.04.2011, demanding payment of the amount shown in the bounced cheque and having not filed a complaint and having caused another notice on 3.06.2011 demanding payment of the bounced cheque, is debarred from filing the complaint i.e., based on the notice issued on 03.06.2011. He submitted that a complaint having not been filed pursuant to the notice given on 05.04.2011, it is not open to initiate prosecution for offence under S.138/ S. 142 of the Act, in respect of dishonour of the cheque for the second time. He placed reliance on the decisions in (i) SADANANDAN BHADRAN Vs. MADHAVAN SUNIL KUMAR, (1998) 6 SCC 514 and (ii) S.L. CONSTRUCTION AND ANOTHER Vs. ALAPATI SRINIVASA RAO AND ANOTHER, AIR 2009 SC 1538 and (iii) V. VENKATESA SUBBU Vs. M/s. JAYA BHASKARAN AND CO. AND ANOTHER, 2004 CRL. L.J. 855.

4. The cheque in question having been dishonoured by the petitioner’s bank, with remark ‘funds insufficient’, a demand notice was given on 05.04.2011. According to the complainant, the petitioner requested to re-present the cheque again for encashment and assured that the cheque will be honoured on such re-presentation. The cheque having been re-presented and having been again returned on 20.05.2011, for the reason ‘funds insufficient’, demand notice dated 03.06.2011, to pay the amount covered under the cheque was given. Payment having not been made, private complaint was lodged on 18.07.2011, before the Magistrate at Ernakulam. The complaint having been returned, in view of the decision in DASHRATH RUPSINGH RATHOD (supra), was presented before the XXVII ACMM, Bengaluru.

5. In SADANANDAN BHADRAN (supra), the complainant, had, after dishonour of a cheque issued in his favour, taken steps to serve upon the accused, the drawer of the cheque, a notice under clause (b) of proviso to S.138 of the Act. No complaint, however, was filed by the complainant, upon failure of the accused to arrange the payment of the amount covered by the cheque. Instead, t