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1993 Supreme(All) 357

HIGH COURT OF ALLAHABAD
HONBLE H.N. TILHARI, J.
V D AGARWAL
Versus
IST ADDITIONAL MUNSIF MAGISTRATE LUCKNOW
Decided On : 03 August 1993

Important Points

The subsequent presentation of a cheque within its validity period is not barred under Section 138 of the Negotiable Instruments Act, and the limitation period for filing a complaint under Section 138 starts from the date of accrual of the cause of action, which is after the notice of demand is served and the drawer fails to pay within 15 days.

Subject

Banking and Negotiable Instruments - Negotiable Instruments Act

Act Referred

NEGOTIABLE INSTRUMENTS ACT : S.138, S.142

Headnote

NEGOTIABLE INSTRUMENTS ACT - SECTION 138 - COGNIZANCE OF OFFENCE - NOTICE OF DEMAND - SERVICE - INTERPRETATION - LIMITATION - SUBSEQUENT PRESENTATION OF CHEQUE - MAINTAINABILITY OF COMPLAINT - WRIT PETITION - QUASHING OF COMPLAINT - GROUNDS.

Fact of the Case:

Petitioner challenged the complaint filed against them under Sections 134 and 141 of the Negotiable Instruments Act, alleging that the notice contemplated under Section 138 was not received, the complaint was time-barred, and subsequent presentation of the cheque was not permissible.

Finding of the Court:

The Court held that the complaint was maintainable and could not be quashed under Article 226 of the Constitution. The Court interpreted Section 138 and its proviso, along with Section 142 of the Act, and concluded that subsequent presentation of the cheque within the validity period was not barred. The Court also held that the limitation period for filing the complaint started from the date of accrual of the cause of action, which was after the notice of demand was served and the drawer failed to pay within 15 days.

Issues: 1. Whether the complaint was maintainable in the absence of service of notice under Section 138 of the Negotiable Instruments Act? 2. Whether the complaint was time-barred? 3. Whether subsequent presentation of the cheque was permissible under Section 138 of the Act? 4. Whether the writ petition was maintainable for quashing the complaint?

Ratio Decidendi: 1. The Court held that the complaint was maintainable as the language of Section 138 and its proviso was clear and unambiguous, and did not bar subsequent presentation of the cheque within the validity period. 2. The Court held that the complaint was not time-barred as the limitation period started from the date of accrual of the cause of action, which was after the notice of demand was served and the drawer failed to pay within 15 days. 3. The Court held that subsequent presentation of the cheque was permissible under Section 138 of the Act as the language of the section did not put any restriction on the number of times a cheque could be presented within the validity period. 4. The Court held that the writ petition was not maintainable for quashing the complaint as the case did not come within the purview of exceptional cases where the Court could quash the complaint under Article 226 of the Constitution.

Final Decision: The Court dismissed the writ petition and held that the complaint was maintainable and could not be quashed.

H. N. TILHARI, J.

( 1 ) - By this writ petition in the petitioners have sought relief for "issuance of a writ or order or direction in the nature of writ of certiorari quashing the proceedings taken against the petitioners under Sections 134 and 141 of the Negotiable instruments Act pending before opposite party No. 1, that is Ist Additional Munsif magistrate, Lucknow in case No. 7 of 1992. The petitioners have further sought the relief of issuance of writ or order or direction in the nature of mandamus commanding the opposite party No. 1 not to proceed against them, that in the petitioners, till the final disposal of the writ petition.

( 2 ) THE facts of the case i. e. , the petitioners case in brief is that petitioner No. 1 is a Director of the Company, that is petitioner No. 2 and is managing the affairs of the Company. That opposite/party No. 2 namely Ram Kumar Gupta filed the complaint under Section 138/141 of the Negotiable Instruments Act on 17. 9. 1991. A copy of the complaint has been annexed as Annexure No. 1 to the writ petition. The petitioners case is that opposite-party No. 1 has taken cognizance of that complaint and issued summons to the petitioners in July 1992. The further submits that the petitioner took preliminary objection to the maintainability of the complaint field under Section 138 of the Negotiable Instruments Act on the ground that notice contemplated under section 138 of the Act has not been received by the petitioner No. 1. The petitioners case is that offence could be said to have been committed only on the refusal of the drawer of the cheque to pay the amount within 15 days on the receipt of the requisite notice to be given by the complainant. The petitioner took the objection to the fact that the complaint was time barred and as such was not tenable. According to the petitioners case in alternative, there is no contemplation of subsequent production of the cheque to the Bank after its rejection and the limitation is to be counted only from the date of the rejection of the cheque. The petitioners further case is that the cheque in question, was presented to the Bank firstly on 9. 7. 1991 and on the same date for the paucity of funds in the said account to honour the cheque at the time, it was presented on 25. 7. 1991 it was returned unpaid by Bank to opposite-party No. 2 on the same date and again it was represented on 23. 8. 1991 and was again returned on the same date. The petitioners case is that once payment had been refused by the bank in respect of the cheque on account of paucity of fund on 9. 7. 1991, the opposite-party No. 2 should have issued a notice within 15 days thereof but he failed to comply with the said provision and presented the cheque after lapse of 15 days to the bank, again on 25. 7. 1991 and when again this time the same was returned by the bank unpaid, the opposite-party No. 2 did not issue any notice within 15 days. Instead after a lapse of one month therefrom, he again presented the cheque on 23rd august, 1991 to the Bank that is this was third time and this time also cheque was returned back unpaid. That after this time the opposite-party No. 2 is alleged to have issued notice dated 28. 8. 1991 but the same has not been served on the petitioner. That complaint has been filed without service of the notice contemplated under section 138 of the Act - before opposite-party No. 1 on 17. 9. 1991. So it is bad in law. The petitioners case primarily is that complaint was not maintainable as no notice has been served on the petitioners. It is also alleged in the petition that the petitioners did not refuse to pay the amount under the cheque to the petitioners. In alternative the second point taken by the petitioners has been that complaint has been time-barred as it has not been filed in time after 9. 7. 1991 when the cheque was first returned by the Bank, after complying with the other requirements of law on the first refusal of the bank to pay the amount. Once cheque dishonou
























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