High Court Of Delhi
MADAN MOHAN - Appellant
Versus
K.M.MENON - Respondent
Criminal Miscellaneous (Main) 1282 of 1992
Decided On : 10/15/1992
NEGOTIABLE INSTRUMENT ACT, 1881 - SECTION 138 - PRESENTATION OF CHEQUE - MULTIPLE PRESENTATIONS - INTERPRETATION: Multiple presentations of a cheque within the statutory period of six months are permissible under Section 138 of the Negotiable Instrument Act, 1881, unless otherwise specified by the legislature.
Fact of the Case:
The petitioner, the owner of commercial premises, filed a complaint against the respondent, his tenant, under Section 138 of the Negotiable Instrument Act, 1881, for dishonor of a cheque issued as rent payment. The cheque was initially dishonored with the remark "refer to drawer" and was re-presented upon the respondent's request, resulting in a second dishonor due to insufficient funds. The Magistrate dismissed the complaint, holding that Section 138 does not contemplate multiple presentations and repeated cause of action.
Finding of the Court:
The court held that the Magistrate erred in interpreting Section 138 of the Negotiable Instrument Act, 1881, as prohibiting multiple presentations of a cheque within the statutory period of six months. The court found that the Act does not specify any limitation on the number of times a cheque can be presented within the prescribed period and that such a restriction cannot be read into the statute.
Issues: 1. Whether multiple presentations of a cheque are permissible under Section 138 of the Negotiable Instrument Act, 1881. 2. Whether the Magistrate erred in dismissing the complaint based on the interpretation that Section 138 does not contemplate multiple presentations.
Ratio Decidendi: The court relied on the plain language of Section 138 of the Negotiable Instrument Act, 1881, which does not impose any limitation on the number of times a cheque can be presented within the statutory period of six months. The court also considered judicial precedents from the Andhra Pradesh and Kerala High Courts, which held that multiple presentations of a cheque are permissible within the prescribed period unless otherwise specified by the legislature.
Final Decision: The court set aside the Magistrate's order dismissing the complaint and remanded the case for trial in accordance with law.
Key Points: - The cheque can be presented multiple times within six months under Section 138, NIA 1881; Proviso does not limit number of presentations. (!) - Section 138 does not prohibit repeated cause of action upon repeated dishonour if within period; circumstances of commercial transactions may justify re-presentation. (!) - Magistrate erred in assuming no multiple presentations; case remanded for trial in accordance with law. (!)
( 1 ) SHRI Madan Mohan, the petitioner herein, hasassailed the order of the Metropolitan Magistrate dated 6/12/1991 on the ground that the Magistrate fell in grave error in observing that thecheque issued by the drawer cannot be presented more than once in order toattract the provisions of Section 138 of the Negotiable Instrument Acjt (hereinafter called as the "act" ).
( 2 ) IN order to appreciate the contentions of the parties, the brieffacts are that the petitioner along with his son is the owner of the premisessituated in 0-4, Swastik Bhawan, Ranjit Nagar, Commeral Complex, nearsatyam Cinema, New Delhi-8. The respondents took this commercialpremises of the petitioner on tenancy on a monthly rent of Rs. 137. 00persquare feet made of Rs. 12. 00. The rent for structure of the premises ofre. l. 00 as the rental for the fittings and fixtures therein. The tenancy wasmade for 33 months. The rent agreed to be paid every month came tors. 3,744. 00andrs. 624. 00. The respondent issued a cheque for Rs. 7,488. 00as an initial payment and thereafter the payment became irregular even thecheque when presented was dishonoured with the remarks "refer to drawer". It is further the case of the petitioner that from February to September, 1991,the rent became due and payable to the tune of Rs. 39,000. 00 out of which therespondent paid on different dates a sum of Rs. 19. 656. 00 leaving a balancedue and payable. As part discharge of the above liability, the respondentissued a cheque on 3/07/1991 for a sum of Rs. 19,344. 00drawn onpunjab National Bank, Tropical Building, New Delhi. The cheque wasreturned unpaid by the Banker with the remarks "refer to drawer" on 1 7/07/1991. The petitioner approached the respondent and informed himabout the dishonouring of the cheque and demanded payment and on requestof the respondent to re-present the cheque, the petitioner did it and again thecheque was dishonoured and the reason given by the bank was "insufficientfunds". It is in this background a notice was given and thereafter complaintwas filed under Section 138 of the Act read with. Section 420 I. P. C.
( 3 ) THE learned Magistrate took the view that so far as Section 420 Indian Penal Code is concerned, since there was no inducement, so the provisions ofsection 420 J. P. C. w (re not attracted. As regard the complaint under Section 138 of the Act, it observed that the same does not contemplate morethan one presentation and repeated cause of action and therefore dismissedthe complaint.
( 4 ) I have heard Mr. U. K. Sukhija, Counsel for the petitioner andmr. R. K. Bahrifor the State. Section 138 of the Act Jays down that if acheque issued pursuant to a debt or other liability is returned to the bankunpaid, either because of the amount of money standing to the credit of thataccount is insufficient to honour the cheque or that it exceeds the amountarranged to be paid from that account, the drawer shall be liable to bepunished with imprisonment for a term which may extend to one year, orwith fine which may extend to twice the amount of cheque, or with both Acheque can be presented to the bank within a period of six months from thedate on which it was drawn or with the period of its validity, whichever isearlier as laid down in Clasue (a) of the proviso to Section 138. Clause (b)of the said Proviso lays down that the payee or the holder in due course maymake a demand for payment of the amount covered by the cheque by givinga notice in writing to the drawer of the cheque, within fifteen days of thedishonour of the cheque. Clause (c) of the proviso enables the drawer ofthe cheque to make payment of the amount covered by the cheque to thepayee within fifteen days of the receipt of the notice under Clause (b ). It is also provided under Section 142 of the Act that the complaint has to be filed within a period of one month from the date on which the cause of action arises.
( 5 ) THE scheme of Sections 138 and 142 of the Act shows that thecheque can b
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