Kerala High Court
Adril D'Couth vs Premier Auto Electric Ltd. And Anr. on 22 October, 1999
Equivalent citations: 2000(1)ALT(CRI)219, [2001]103COMPCAS561(KER)
JUDGMENT T.M. Hassan Pillai, J.
1. The short ground to invoke the inherent powers of this court under Section 482 of the Criminal Procedure Code, 1973, to axe annexure I complaint filed by the respondent against the petitioner accusing him of having committed the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short "the N. I. Act"), is issuing of originals of annexures II and III, respectively, by the respondent when the cheque issued by the petitioner was returned by the drawee bank unpaid on the ground of insufficiency of funds in the account of the petitioner maintained with the drawee bank on two earlier occasions and non-filing of complaint against the petitioner by the respondent alleging commission of offence under Section 138 of the Negotiable Instruments Act within one month of arising of the cause of action.
2. The undisputed facts are that the petitioner used to purchase electrical and mechanical items from the complainant-company on credit and Rs. 71,207 was owed by the petitioner to the complainant-company under the credit sales made. In partial discharge of the liability the petitioner issued the cheque in question (cheque dated March 31, 1997, for Rs. 30,000 drawn on the Canara Bank, Palarivattom branch) to the respondent and that cheque was dishonoured by the drawee bank when presented for encashment. By means of original of annexure II complainant requested the petitioner to send to it a "demand draft for Rs. 30,985 in lieu of the returned cheque immediately". The cheque dishonoured was again presented for encashment and when presented on the second occasion also the same was returned unpaid with the remark "insufficient funds". After the bouncing of the cheque again, i.e., after presenting it for encashment a second time, the complainant threatened the petitioner that legal action would be initiated against him if payment was not received by it by April 25, 1997, (annexure III). The cheque in question was again presented by the complainant-company for encashment and on the third occasion also that cheque was returned unpaid with the endorsement "insufficient funds". The complainant then issued a lawyer's notice demanding payment of the amount covered by the dishonoured cheque and it is not the case of the petitioner that he had paid the amount covered by that cheque within fifteen days of the receipt of that lawyer's notice. The proceeding sought to be stalled has been instituted before the Chief Judicial Magistrate Court, Ernakulam, and the learned Magistrate took cognizance of the offence and issued process (C. C. No. 2380 of 1997). The Chief Judicial Magistrate, Ernakulam, made over the case to the Additional Chief Judicial Magistrate Court (EO), Ernakulam and the case is renumbered as C. C. No. 248 of 1998.
3. Respondent's counsel contended that criminal proceedings initiated at the instance of the respondent (complainant-company) are not liable to be stultified at the threshold and according to him annexures II and III are not statutory notices envisaged under Section 138 of the Negotiable Instruments Act as contended by the petitioner and they are only intimations given by the respondent to the petitioner whereby he was informed of the fact of returning of the cheque in question by the drawee bank unpaid on the ground of insufficient funds.
4. The controversy is centering round the question whether annexure II or III satisfies the requirement of the statutory notice envisaged under Section 138 of the Negotiable Instruments Act and the contention of counsel for the petitioner vehemently urged before me is that as the respondent demanded the money covered by the cheque in question by issuing original of annexure II the requirement of issuing statutory notice as contemplated under proviso (b) to Section 138 has been complied with and as no complaint was filed within one month of the arising of the cause of action, the criminal proceedings instituted against the petitioner are legally unsustainable and ex facie the allegations in the complaint do not disclose commission of an offence under Section 138 of the Negotiable Instruments Act.
5. There is merit in the contention made on behalf of the petitioner by his learned counsel. It is abundantly clear from annexures II and III that a demand for money covered by the dishonoured cheque was made by sending annexures II and III and learned counsel for the respondent fairly has not disputed that fact before me. A feeble attempt made by her as a last straw is that annexures II and III are only intimations regarding the bouncing of the cheque when presented for encashment by the drawee bank. That a demand was made for the return of money covered by the dishonoured cheque is ex facie evident from annexure II and the demand made for sending a demand draft for Rs. 30,985 in lieu of the returned cheque immediately indicates nothing but a demand for payment of the amount covered by the cheque issued by the petitioner. By sending annexure III the complainant-company (respondent) threatened to take legal action if the amount covered by the dishonoured cheque was not paid by April 25, 1997. A cursory glance at annexure III also reveals clearly the fact that demand for payment of money covered by the dishonoured cheque was made by the respondent.
6. The fact that annexure II was issued within fifteen days of the bouncing of the cheque when it was presented for the first time is not disputed before me. It is also not disputed before me that annexure III was issued within fifteen days from when the cheque presented again, i.e., on the second occasion, was returned unpaid. No form of notice is prescribed under Clause (b) of Section 138 and the requirement is only that notice shall be given in writing within fifteen days of the receipt of information from the bank regarding return of the cheque unpaid. The apex court has held in SIL Import v. Exim Aides Silk Exporters [1999] 97 Comp Cas 575, 579 thus:
"The duty cast on the payee on receipt of information regarding the return of the cheque unpaid is mentioned in Clause (b) of Section 138. Within 15 days he has to make a demand for payment. The mode of making such a demand is also prescribed in the clause, that it should be 'by giving notice in writing to the drawer of the cheque'. Nowhere is it said that such notice must be sent by registered post or that it should be despatched through a messenger."
7. In the decision cited supra the apex court held that the fax message sent by the respondent for his own safeguard boomeranged and he is forked in a Catch 22 situation. If the notice envisaged in clause (b) of the proviso to Section 138 was transmitted by fax it would be in compliance with the legal requirement. So, I entertain no doubt that annexures II and III are notices envisaged in Clause (b) of the proviso to Section 138 of the Negotiable Instruments Act and there was compliance with the legal requirement of sending notice in writing.
8. There is no case for the respondent that either within fifteen days of receipt of annexure II or within fifteen days of receipt of annexure III the petitioner paid the amount covered by the dishonoured cheque and it is also not the case of the respondent that the complaint was filed within one month of arising of the cause of action, i.e., the complaint was filed within one month after the expiry of 15 days of receipt of annexure II or annexure Ill notice by the petitioner. The starting' date of the period of fifteen days envisaged in Clause (c) of Section 138 is the date of receipt of the said notice. It is the settled position of law that once it starts the offence is completed on the failure to pay the amount within fifteen days thereafter. The cause of action would arise if the offence is committed. Here the facts of the case on hand disclose that after the issuing of annexure II notice without filing a complaint within 45 days of receipt of that notice by the petitioner, the respondent presented the cheque again and again for encashment and issued annexure III and lawyer's notice. It is the settled position that the cause of action can arise only once. The law is laid down by the apex court in Sadanandan Bhadran v. Madhavan Sunil Kumar [1998] 94 Comp Cas 812 . The apex court has stated the law in that case as follows (pages 817 and 818):
"Consequent upon the failure of the drawer to pay the money within the period of 15 days as envisaged under Clause (c) of the proviso to Section 138, the liability of the drawer for being prosecuted for the offence he has committed arises, and the period of one month for filing the complaint under Section 142 is to be reckoned accordingly. The combined reading of the above two sections of the Act leaves no room for doubt that the cause of action within the meaning of Section 142(c) arises--and can arise--only once."
9. The following statement of law has been clearly adumbrated by the apex court in para. 7 thereof (page 818) :
"Because the language of sections 138 and 142 which clearly postulates only one cause of action, there are other formidable impediments which negate the concepts of successive causes of action. One of them is that for dishonour of one cheque, there can be only one offence and such offence is committed by the drawer immediately on his failure to make the payment within fifteen days of the receipt of the notice served in accordance with Clause (b) of the proviso to Section 138. That necessarily means that for similar failure after service of fresh notice on subsequent dishonour, the drawer cannot be liable for any offence nor can the first offence be treated as non est so as to give the payee a right to file a complaint treating the second offence as the first one. At that stage, it will not be a question of waiver of the right of the payee to prosecute the drawer but of absolution of the drawer of an offence, which stands already committed by him and which cannot be committed by him again."
10. Annexure I complaint was filed after the bouncing of the cheque by the drawee bank when it was presented for encashment on the third occasion. The allegation in the complaint was that the drawee bank dishonoured the cheque on the ground of insufficiency of funds and information regarding the dishonouring of the cheque was received by it on July 19, 1997. The complainant further alleged that after receipt of that information it sent a registered lawyer's notice dated July 26, 1997, demanding payment of the amount covered by the cheque within 15 days from the date of receiving of information by it that the cheque was returned unpaid and the statutory notice was received by the petitioner on August 9, 1997. It is common ground that within 15 days of receipt of the lawyer's notice the petitioner had not paid the amount covered by the dishonoured cheque. The complaint was filed on September 23, 1997.
11. As pointed out earlier, the cause of action arises only once and in the instant case the cause of action arose within 45 days of receipt of annexure II by the petitioner. It is clear from annexure I complaint that the complaint was filed not within one month of the arising of the cause of action. There is, thus, ground to axe the criminal proceedings initiated against the petitioner by the respondent and invoking the powers of this court under Section 482 of the Criminal Procedure Code, the criminal proceedings in C. C. No. 248 of 1998 on the file of the Additional Chief Judicial Magistrate Court (EO), Ernakulam are quashed.
12. The criminal miscellaneous case is allowed.