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2008 (2) Bankmann 23 (Kar.)
KARNATAKA HIGH COURT
A.C. Kabbin, J.
Gangadhar —Appellant
versus
Raghunathasa —Respondent
Criminal Appeal No. 1680 of 2003
Decided on 29.11.2007
Counsel for the Parties:
For the Appellant:Vardhaman V. Gunjal, Advocate.
For the Respondent:I.G. Gachchinamath, Advocate.
IMPORTANT POINT
Cause of action for filing a complaint for the offence punishable under Section 138 of the Negotiable Instruments Act does not commence merely on the issuance of a notice under clause (b) of the proviso to Section 138 of the Negotiable Instruments Act, but it commences from the date of service of such notice on the drawer of the cheque.
Headnote:Negotiable Instruments Act, 1881—Section 138—Dishonour of cheque—Order of acquittal on findings that complainant admitted that cheque had earlier been presented for encashment on 28.3.1998 and had issued notice to accused with regard to dishonour of cheque—Prosecution had been launched pursuant to cheque received unpaid on 25.4.1998—Whether cause of action for offence under Section 138 of the Act arose merely by issuing notice of dishonour of cheque? No—Whether acquittal was liable to be set aside? Yes.
Held: From the discussion made above, it is clear that cause of action for filing a complaint for the offence punishable under Section 138 of the Negotiable Instruments Act does not commence merely on the issuance of a notice under clause (b) of the proviso to Section 138 of the Negotiable Instruments Act, but it commences from the date of service of such notice on the drawer of the cheque. The right of the drawee to present the cheque once again within the time does not extinguish, if such a notice is not served on the drawer of the cheque, for if the notice is not served, no cause of action has arisen.
In the present case, it was nobody’s case that the accused had received the notice sent regarding dishonour of cheque presented on 28.3.1998. Nowhere the accused contended that he had received such a notice. The question of the paying the amount of cheque on receipt of such notice did not arise. Consequently, no cause of action on the basis of dishonour of cheque presented on 28.3.1998 arose and there was no bar on the complainant to represent the cheque and on its dishonour to issue a notice of dishonour of cheque. Though the decision of the Supreme Court is Sadanandan Bhadran’s case had been brought to the notice of the Trial Court, without properly understanding the principles laid down in that decision, the Trial Court has proceeded on the basis that by issuance of first notice, the cause of action had arisen and presentation of the cheque once again was not permissible.
Since no cause of action had arisen on the basis of dishonour of the cheque presented on 28.3.1998, the complainant was entitled to present the cheque once again within the time. It was dishonoured and the notice of dishonour of cheque was given to the accused. It was received by the accused on 25.4.1998. Admittedly he did not make any payment nor did he reply to the notice. Consequently he had committed the offence punishable under Section 138 of the Negotiable Instruments Act. The complaint presented on 12.5.1998 was within the time. The learned trial Judge without considering the facts and principle of law in proper perspective has proceeded to hold that the offence under Section 138 of the Negotiable Instruments Act had not been made out.
For the above said reasons, the appeal is allowed and setting aside the acquittal of the respondent in judgment dated 20.9.2003 passed by the learned I Additional Civil Judge (Junior Division) & JMFC, Hubli in CC No.482/2001, the respondent is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act. (Paras 15 to 18)
Result: Appeal allowed.
A.C. Kabbin, J.—The point of law that has arisen in the present appeal is:
“Whether the cause of action for an offence punishable under Section 138 of the Negotiable Instruments Act arises merely by issuing a notice of dishonour of cheque?”
2. The appellant herein was the complainant in C.C. No.131/1998 on the file of the JMFC (I Court) Hubli, and the respondent was the accused in that case. The contention of the appellant was that on the request of the respondent he had advanced an amount of Rs. 1,00,000 as hand loan to the respondent in the month of January 1998 and that when he pressed for its repayment, the accused-respondent had issued a cheque bearing No.449421 dated 27.3.1998 for Rs. 1,00,000 drawn on the State Bank of India, but that on presentation of the said cheque it was dishonoured. The appellant alleged that despite service of notice of dishonour, the respondent having failed to pay the amount within the stipulated time, has committed an offence punishable under Section 138 of the Negotiable Instruments Act.
3. The accused pleaded not guilty and claimed to be tried. The complainant examined himself and the bank manager regarding dishonour of cheque. After the case of the complainant was closed, the accused was examined under Section 313 of the Code of Criminal Procedure to explain the circumstances arising out of the evidence. The accused denied the allegations in the complainant’s evidence. No witness was examined on behalf of the accused.
4. The learned trial Judge held that the cheque had been issued by the accused in favour of the complainant and it had been dishonoured and also that the respondent-accused had failed to pay the amount despite service of notice. However relying on an admission of the complainant in the cross-examination that the cheque had earlier been presented for encashment on 28.3.1998 and that he had issued a notice to the accused with regard to the dishonour of cheque, he held that once notice of dishonour of cheque was issued, cause of action for filing the complaint arose and the complainant was not entitled to represent the cheque and file the complaint on the basis of dishonour of cheque for the second time. In that regard, he placed reliance on two decisions of the Supreme Court. The first decision is in the case of Sadanandan Bhadran v, Madhavan Sunil Kumar,1 and the second decision is M/s. Unipals India Ltd. v. State (Govt. of NCT of Delhi).2 In the result holding that the cause of action arose on the issuance of first notice on the basis of dishonour of cheque presented on 28.3.1998, the learned trial Judge held that the complaint filed on the basis of the second notice of dishonour of cheque was not maintainable in law. In the result, he acquitted the accused by judgment dated 20.9.2003, challenging which the present appeal has been preferred.
5. Sri Vardhaman V. Gunjal, learned advocate for the appellant argues that so-called admission of the complainant has been misread by the learned trial Judge. He submits that though the admission of the appellant (complainant) about issuance of notice was not that he had issued two notices, even if it is taken that a notice had been issued on the dishonour of cheque presented on 28.3.1998, admittedly no such notice having been received by the accused, there was no impediment for the complainant to represent the cheque once again. He points out that it is not the case of the accused that he had received the notice regarding dishonour of cheque presented on 28.3.1998. The learned counsel for the appellant argues that when no notice of dishonour of cheque had been served on the accused regarding dishonour of cheque presented on 28.3.1998, no cause of action for the complaint had arisen and therefore there was no impediment to present the cheque for the second time. He submits that the decision of the Supreme Court in M/s. Dalmia Cement (Bharat) Ltd. v. M/s. Galaxy Traders and Agencies Ltd.,3; Sadanandan Bhadran v. Madhavan Sunil Kuma
