The main legal point established in the judgment is that the receipt of notice by the accused under Section 138(b) of the Negotiable Instruments Act is essential to constitute an offence under Section 138, and the cause of action arises on the receipt of the notice.

A.N.Jindal, J.

1. Special leave to appeal granted. This appeal is directed against the order of acquittal dated 18.7.2005 passed by the Judicial Magistrate Ist Class, Faridabad, vide which complaint under Section 138 of the Negotiable Instruments Act filed by Haryana State Small Industries and Export Corporation Limited against Laxmi Agro Industries regarding dishonouring of the cheque dated 23.3.1994 for a sum of Rs. 20,21,521/- against the accused-respondent (hereinafter referred to as `the respondent) was dismissed and he was acquitted.

2. Facts in the background of the case are that the complainant Haryana State Small Industries and Export Corporation (hereinafter referred to as `the complainant) was dealing in supply of iron and steel to small scale industries. The respondent was also one of its dealers. On 27.2.1994, the respondent purchased material for a sum of Rs. 29,66,721/- against bill No. 10672 dated 27.2.1994. Out of the aforesaid amount, the respondent paid a sum of Rs. 9,45,200/- against the current cheque dated 28.2.1994 and for the balance amount a post dated cheque No. 765504 dated 23.3.1994 for a sum of Rs. 20,21,521/- was issued. On 23.3.1994, when the complainant presented the said cheque for encashment with its bankers, then he was informed by Jammu and Kashmir Bank Limited, Naraina, New Delhi (drawee bank) that the cheque was dishonoured because of insufficiency of funds. Then complainant issued notice to the respondent on 7.4.1994 and thereafter also personally requested the respondent for payment and the latter assured that in case the cheque is presented again, it will be honoured. On the said assurance, cheque was again presented on 19.4.1994 through the aforesaid bank but again he was intimated on 21.4.1994 that the cheque was dishonoured for want of sufficient funds. Consequently, the complainant served notice upon the respondent on 29.4.1994 informing him regarding the dishonouring of the cheque. Failing to respond to the notice, the complainant preferred this complaint on 2.6.1994.

3. After holding full trial, the trial Court observed that since the complaint is time barred, therefore, it is bound to be dismissed. Hence this appeal.

4. We have the rival contentions and have scrutinized the record of the case.

5. We observe that the sole controversy involved in the case is (i) whether the previous notice dated 7.4.1994 issued upon the respondent was actually a notice under Section 138(b) of the Negotiable Instruments Act; whether said notice was actually served upon the respondent; and (ii) whether once an assurance has been given by the respondent to tender the cheque for encashment on 19.4.1994, then it gives a fresh cause of action to the complainant.

6. Before laying our hands to appreciate the real position, we need to reproduce some relevant dates. The cheque No. 765504 is dated 23.3.1994. It was tendered for payment on the due date which was dishonoured. A letter was issued by the complainant on 7.4.1994, then there is evidence that the respondent personally requested the complainant to present the cheque again on 19.4.1994. However, despite the cheque was presented on 19.4.1994, Jammu & Kashmir Bank Limited, Naraina, New Delhi informed vide letter dated 21.4.1994 that the cheque was dishonoured for want of insufficient funds. The complainant issued notice to the respondent on 29.4.1994. Consequently, the complainant preferred this complaint within time from 19.4.1994 i.e. on 2.6.1994.

7. Section 138 of the Negotiable Instruments Act is reproduced as under :-

"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 insufficie