Orissa High Court
A. Gangadhar vs K. Prasad on 15 March, 2005
Equivalent citations: 99(2005)CLT560, 2005(I)OLR535
Author: R.N. Biswal
Bench: R.N. Biswal
JUDGMENT R.N. Biswal, J.
1. In this revision the petitioner has challenged the legality, propriety and correctness of the Order dated 25.2.2002 passed by the S.D.J.M., Puri in ICC No. 119 of 2001 wherein he refused to take cognizance of the offence under Section 138 of the Negotiable Instruments Act, (here-in-after referred to as 'N.I. Act') and dropped the proceeding.
2. The petitioner was the complainant and the opp. party was the accused in the aforesaid complaint case. As per the complaint petition, the complainant deals in fishing net and boat materials. He used to supply the same to different persons including the accused on credit and collects the price thereof subsequently. In the process the accused owed a sum of Rs. 80,000/- to him by 15.4.2001. On request of the complainant on 18.4.2001 he handed over to him a post dated cheque (dated 20.4.2001) amounting to Rs. 40,000/- drawn from Andhra Bank, Puri branch. The complainant presented the cheque in his Bank i.e., United Puri-Nimapara Central Co-operative Bank, Puri on 19.4.2001 for collection. Accordingly it was sent to Andhra Bank, Puri Branch, but since the accused had no sufficient money in his account, it was dishonored and United Puri-Nimapara Central Co-operative Bank, Puri returned the cheque to complainant on 21.4.2001. On 30.4.2001 the complainant, sent a notice through his advocate to the accused demanding the cheque amount. As payment was not made, on 15.5.2001 he filed the ICC Case No. 51 of 2001 against the accused before the Court of S.D.J.M. Puri wherein cognizance was taken under Section 138 of the N.I. Act on 17.5.2001. On 29.5.2001 accused filed a petition to recall the order of taking cognizance on the ground that he did not receive any notice either from the complainant or his advocate and the averment that he received notice on 2.5.2001 is false. As per the petition even if it is believed that he received the notice on 2.5.2001, since the complaint petition was filed, before expiry of the statutory period of 15 days of receipt of the notice the order of taking cognizance is illegal on the very face of record. The Court below rejected the petition holding that the question of service of notice is purely a question of fact and could be gone into during trial. It is relevant to mention here that on 11.10.2001 the complainant filed a petition to return the cheque to present it again in the Bank on the ground that on verification he ascertained that the complainant did not receive the notice personally. Accordingly the cheque was returned to the counsel for the complainant on condition that he would re-file it as and when required by the Court. The complainant, then deposited the same in his Bank for collection on 12.10.2001. On being sent to Andhra Bank, Puri Branch it was again dishonoured on the ground of insufficiency of fund in the account of the accused. So the complainant again sent notice to the accused by registered post on 18.10.2001. In order to serve the notice, the postman went to the house of the accused several times in between 19.10.2001 to 30.10.2001 but he deliberately avoided to receive the same. As the accused did not pay the cheque amount within 15 days the complainant filed a second complaint case bearing ICC No. 199 of 2001 against the accused on 19.11.2001. The S.D.J.M. refused to take cognizance in the second complaint case on the ground that cognizance under Section 138 of N.I. Act had already been taken in ICC case No. 51 of 2001 in respect of the same cheque and accordingly dropped the case.
3. Being aggrieved with this order the complainant has filed the present revision as stated earlier.
Learned Counsel for the petitioner submitted that the Opp. Party-accused in the petition dated 29.5.2001 stated that he did not receive notice said to have been sent to him by the petitioner through his advocate demanding payment of money. So the dishonour of the cheque remained without further escalation and did not snowball into a cause of action. When the cheque was presented for second time, it was again dishonoured on the similar ground of insufficiency of fund. Notice was sent to the Opp. Party-accused demanding payment of money, but he avoided to receive it. When he did not make payment within the statutory period of 15 days the petitioner filed the second complaint bearing ICC No. 119 of 2001. So there was no bar to take cognizance under Section 138 of N.I. Act against the Opp. Party-accused on the second complaint. In support of his submission he relied on the decision in Uniplas India Ltd. and Ors. v. State (Govt. of NCT of Delhi) and Anr., AIR 2001 SC 2625 where the Hon'ble Apex Court held :
"To a query by us Learned Counsel for the appellants candidly admitted that the notice of 1.12.1995 was issued only after the expiry of 15 days from receipt of the intimation from Bank regarding the dishonour. If so the said dishonour remained without any further escalation and need not snowball into a cause of action. Its corollary is that the payee was not prevented from presenting the cheque once again within the permitted period and to make use of such presentation and the subsequent dishonour for a cause of action to be founded for launching a complaint as in the present case".
On the other hand Learned Counsel for the opp. party-accused submitted that for dishonour of one cheque, there can be only one cause of action. So more than one complaint case cannot be filed for dishonour of one cheque. In support of his submission he relied on the decisions in Kiran Overseas Exports Ltd. v. Air Force Naval Housing Board, II (2000) BC 137 and Sadanandan Bhadran v. Madhavan Sunil Kumar, I (1999) BC 691 (SC). Because of the rival submissions of counsel for the parties it will be profitable to quote Section 138 of N.I. Act which reads as follows :
"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 insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that Bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both :
Provided that nothing contained in this section shall apply unless :
(a) the cheque has been presented to the Bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier,
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the Bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice".
4. As per Clause (c) of Section 138 of the N.I. Act the cause of action to file a complaint arises if the drawer fails to make payment within 15 days of receipt of demand notice. In other words the offence under Section 138 of the N.I. Act is complete when the drawer fails to pay the money within 15 days of demand notice. A complaint can be legally filed within one month of the date on which the cause of action arises as envisaged under Clause (b) of Section 142 of the N.I. Act.
5. In the case at hand the opp. party-accused claims that he has not received the notice. As per the averment made in ICC No. 119 of 2001 the registered notice was issued to the Opp. Party-accused on 30.4.2001, but it was received by one of his servants on 2.5.2001. So, admittedly no notice was received by the opp. party-accused. As stated earlier, the offence under Section 138 of the N.I. Act is complete when the drawer fails to repay the money within 15 days of demand notice. In other words non-payment of money within 15 days of receipt of demand notice snowballs into cause of action.
6. In the present case since the opp. party-accused did not receive the notice-dated 30.4.2001, there was no cause of action in favour of complainant-petitioner for filing the first complaint. So if the second complaint has been filed complying with the requirements of Section 138 and 142 of the N.I. Act, it shall be maintainable.
7. In the decision Kiran Overseas Exports Ltd. (supra) it has also been held that cause of action within the meaning of Clause (b) of Section 142 of the N.I. Act arises and can arise only once. It has also been held therein that from a plain reading of Section 142 it is maniferst that as competent Court can take cognizance of a written complaint of an offence under Section 138 of the N.I. Act if it is made within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138 of the said Act. Similarly in the decision Sadanandan Bhadran (supra) the Apex Court held :
Now, the question is how the apparently conflicting provisions of the Act, one enabling the payee to repeatedly present the cheque and the other giving him only one opportunity to file a complaint for its dishonour, and that too within one month from the date the cause of action arises, can be reconciled. Having given our anxious consideration to this question, we are of the opinion that the above two provisions can be harmonised, with the interpretation that on each presentation of the cheque and its dishonour a fresh right-and not cause of action-accrues in his favour. He may, therefore, without taking pre-emptory action in exercise of his such right under Clause (b) of Section 138, go on presenting the cheque so as to enable him to exercise such right at any point of time during the validity of the cheque. But, once he gives a notice under Clause (b) of Section 138 he forfeits such right, for, in case of failure of the drawer to pay the money within the stipulated time, he would be liable for the offence and the cause of action for filing the complaint will arise. Needless to say, the period of one month for filing the complaint will be reckoned from the day immediately following the day on which the period of fifteen days from the date of the receipt of the notice by the drawer, expires.
8. In the instant case as held earlier no cause of action to file a complaint had arisen when ICC No. 51 of 2001 was filed. So both the decisions relied on by Learned Counsel for the Opp. Party-accused would in no way be helpful to him.
9. Learned Counsel for the opp. party-accused again submitted that in ICC No. 51 of 2001 notice having been issued to the opp. party on 30.4.2001, cause of action arose immediately 15 days thereafter. The second complaint having been filed on 19.11.2001 is barred by limitation. No doubt the petitioner-complainant has sent notice by Registered Post with A.D. on 30.4.2001. So it would have been presumed under Section 27 of the General Clauses Act that it was served on the Opp. Party-accused and cause of action arose 15 days thereafter had he not taken the plea of non-receipt of it. This presumption cannot be taken by the Opp. Party-complainant now since he himself has stated that he did not receive the notice, which was conceded to by the petitioner/complainant. Since no cause of action arose in terms of Section 138(c) of N.I. Act in favour of the petitioner-complainant on the occasion of first dishonour of the cheque, the subsequent complaint is maintainable provided all requirements as per Sections 138 and 142 of N.I. Act are complied with.
10. Learned Counsel for the Opp. Party-accused further submits that cognizance for the offence under Section 138 of N.I. Act has already been taken by the Court below in ICC No. 51 of 2001 for dishonour of the cheque. So cognizance in ICC No. 199 of 2001 cannot be taken again for dishonour of the same cheque. As discussed earlier, the first complaint was made before the cause of action in terms of Section 138(c) of N.I. Act arose in favour of the petitioner-complainant. If it is allowed to continue, ultimately the Opp. Party-accused shall get acquitted on technical ground. So there is no meaning in continuing that case. Merely on technical ground the accused should not be allowed to go scot-free from criminal liability. Where the ends of justice so requires, nothing prevents this Court from exercising its inherent power while sitting in Revision. In my view, ends of justice require that ICC No. 51 of 2001 should be quashed.
11. Accordingly the proceeding in ICC No. 51 of 2001 is quashed and the Order dated 25.2.2002 passed in ICC No. 119 of 2001 is set aside. The S.D.J.M. shall proceed with ICC No. 119 of 2001 in accordance with the aforesaid observations.
In the result the Revision is allowed.