ORDER
1. These two petitions are directed against the order of the J.M.F.C., Muddebihal, in C.C. Nos. 243/92 and 596/92 respectively directing issue of process against the petitioner, who is common in both the cases, and for quashing the entire proceedings.
2. The respondent who is common in both the cases has filed two complaints before the Magistrate for offence under section 138 of the Negotiable Instruments Act (‘the Act’ for short). The respondent’s case is that the petitioner who was due in a sum of Rs. 50,000/- issued one cheque dated 30-9-91 for a sum of Rs. 10,000/- and another cheque for Rs. 40,000/- dated 2-5-92 in respect of that liability, that when both the cheques were presented for encashment they were returned with an endorsement of insufficiency of funds, that the respondent issued notices to the petitioner demanding the payment and that in spite of the service of the notice the petitioner failed to pay amounts covered by the cheques and that he has thus committed an offence under Section 138 of the Act in the two cases. The complaint in C.C. 596/92 is in respect of the cheque for Rs. 10,000/- while the complaint in C.C. 243/93 is in respect of the cheque for Rs. 40,000/-
3. The Magistrate after taking cognizance of the offence and recording the sworn statement of the complainant has issued process in both the cases against the petitioner for offence under Section 138 of the Act.
4. One common ground urged in both the cases is that the Magistrate has not examined the complainant on oath and that he has allowed the advocate for the complainant to examine him and that there is violation of the provisions of Section 200 Cr PC and the proceedings are therefore vitiated. It is no doubt true that the learned Magistrate, who ought to have himself examined the complainant on oath, has not done so but has allowed the complainant’s advocate to examine him. Though this procedure adopted by the Magistrate is in violation of the provisions of Section 200 Cr PC and is therefore an irregularity, the question that would arise for consideration is whether on account of the improper examination of the complainant the order issuing process could be set aside at the instance of the accused petitioner. This point has been considered by me with reference to the earlier authorities in Cr RP 605/90 (Durvasa v. Chandrakala D.D. 11-8-94). I have held that as no prejudice is caused to the accused on account of the above irregularity the defect gets cured under section 465 Cr PC and that the order cannot be set aside on that score. As such this ground by the learned Counsel for the petitioner in the two cases cannot be accepted.
5. In Cr P 2204.93 the learned Counsel for the petitioner contended that in the complaint it is not stated as to when the cheque was returned by the bank, that without that date being furnished it would not be possible to find out whether the petitioner has issued a notice of demand within 15 days from the date the cheque was returned to him and that as such on the basis of the averments in the complaint it cannot be said that the offence under section 138 of the Act has been committed. Though in the complaint the date on which the cheque was returned by the bank has not been mentioned, in the copy of the notice, which has been marked as Ex. P. 3, in the examination of the complainant clearly discloses that the cheque was received back on 28-5-92. As such merely because in the complaint the date on which the cheque was returned is not mentioned it cannot be said that the necessary particulars were not placed before the Court for purpose of determining whether process should be issued or not.
6. Another contention urged by the learned Counsel for the petitioner in that case is that thought the copy of the notice bears the dated 10-6-92 the postal acknowledgment which is marked as Exhibit P4 bears the registration number and date as 1368/13.6, that this would indicate that the notice is actually been despatched on 13-6-92 and that that would be beyond 15 days from 28-5-92. At the stage of deciding whether a prima facie case is made out and whether process should be issued, the Magistrate is not required to assess the material on record minutely. It cannot be said at this stage without evidence, as to whether the number put on the acknowledgment mentioned above refers to the date of registration of the notice. The notice itself is dated 10-6-92 and if the notice has been sent on that day it would be within 15 days from the date of return of the cheque and would amount to compliance with the proviso (b) of Section 138 of the Act. The question whether the notice is actually despatched on 10-6-92 or not could be investigated during trial and I do not think that in these proceedings relying on the above material this Court can quash the proceedings on the ground that the offence is not made out.
7. In Cr.P. 2205/93 the main ground urged by the learned Counsel for the petitioner is that, respondent admittedly presented the cheque for encashment when the petitioner did not turn up on 4-10-91 as per his telegram, that the cheque was returned with an endorsement that there was no sufficient funds, that admittedly respondent did not chose to issue a notice within 15 days from the date of the return of the cheque on the occasion but has presented the cheque again and that it is only when the cheque was returned with a similar endorsement on the second occasion he has issued notice of demand and that to constitute the offence under section 138 of the Act the payee or the holder of the cheque has to issue the notice of demand on the very first occasion the cheue is returned on the ground of insufficiency of funds and that the payee having failed to do so cannot present it again and then issue of notice of demand.
8. The learned Counsel for the respondent contended that there is no bar for presenting the cheque for encashment any number of times and that all that has to be made out is that notice of demand has been issued within 15 days from the date of the return of the cheque whether such return is on the first occasion or on subsequent occasions.
9. A new offence has been created by enacting Section 138 and under the main clause of this Section where any cheque drawn by a person on an account maintained by him with a bank for payment of any amount of money to another person, from out of such account for the discharge of any debt or any other liability is, returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient or that the amount of the cheque exceeds the amount arranged to be paid from that account, such person shall be deemed to have committed, an offence. The proviso stipulates certain conditions to be fulfilled before the main clause is attracted. The proviso reads as hereunder :
“(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 said notice.”
Under the Negotiable Instruments Act there is no bar for presentation of a cheque for encashment any number of times during the period of the validity of the cheque. In the course of trade and commerce it is not uncommon for a cheque to be returned on account of insufficiency of funds and the drawer requesting the drawee to represent it again promising that he would arrange for the funds in the meanwhile and the payee accordingly representing the cheque. A payee who may not be keen on entering into a litigation may represent a cheque though it is returned on one occasion for want of sufficient funds to give an opportunity to the drawer to make good the deficiency. It is seen that even Section 138 of the Act stipulates that, to prosecute the drawer for the offence, the drawer must be given a notice so that he may make payment, in which event the offence will not be committed. The object of the Section is to ensure that those who issue cheques in discharge of their liability honour their commitment. Though the notice of demand is required to be made within 15 days from the date of receipt of information regarding the return of the cheque as unpaid, there is nothing in clause (b) of the proviso to indicate that that demand must be made on the very first occasion the cheque is dishonoured and returned. The Parliament must be taken to know that a cheque can be presented more than once for encashment. If it was intended that the notice of demand should be issued within 15 days from the date the cheque is first returned on the ground of insufficiency of funds it would have been stated so clearly in clause (b). That not having been said, it is clear that all that the proviso requires is that a notice should be issued within 15 days of the receipt of information about the return of the cheque on the ground of insufficiency of funds, notwithstanding the fact that the cheque might have been returned earlier also with similar endorsement. If clause (b) is interpreted to mean that notice of demand should be issued within 15 days after the return of the cheque on the first occasion itself, it would be forcing the payees or holders to initiate prosecution without giving another opportunity to the drawer to make good his default to avoid prosecution. That could not have been the intention of the Parliament while stipulating the condition (b) in the proviso.
10. Every time a cheque is presented and it is returned for insufficiency of funds the payee or the holder gets a cause of action to initiate the necessary steps for prosecuting the drawer by issue of notice. It is left to the payee to decide whether he would make use of the cause which arises when the cheque is returned with endorsement of insufficiency of funds and initiate steps which may ultimately result in prosecution or to wait for some time to enable the drawer to arrange for sufficient funds and represent the cheque again if the period of validity of the cheque is not over.
11. The above view I have taken is supported by the decisions of some other High Courts, to which I presently refer.
12. The Madras High Court in Sivasankar v. Santha Kumari 1991 Mad LW (Crl.) 481 has held that there is no specific provision at all that the complaint or the prosecution is to be launched on the dishonour of the cheque for the first time after issuance of the statutory notice and that successive dishonour of the cheque on different occasions, of course presented within its period of validity, will have to be construed as constituting separate cause of action for the initiation of the prosecution.
13. In Richard Samson Sherrat v. State of A.P. 1992 Cri LJ 2566, the Andhra Pradesh High Court has held that there is no restriction regarding the number of times a cheque can be presented and that every subsequent representation and dishonour gives rise to fresh cause of action for filing complaint.
14. In Rakesh Nemkumar Porwal v. Narayan Dhondu Joglekar 1993 Cri LJ 680 the Bombay High Court has held that fresh cause of action accrues every time the cheque is dishonoured but the period for sending the notice demanding payment is to be reckoned from the date of receipt of intimation of dishonour on the last presentation and it is on the basis of this action alone a complaint would be maintainable.
15. In Satishkumar v. Krishnagopa 1994 Cri LJ 887 the Nagpur Bench of the Bombay High Court has held that a cheque can be presented to the Bank for payment twice of more times within the period of 6 months or the period of its validity and if it is dishonoured then on such dishonour of the cheque a fresh right accrues in favour of the complainant every time and he can enforce that right by initiating proceedings under section 138 of the Act. In Company of Management for Baranagar Jute Factory v. ATIS Dipankar Choudhari 1993 Cri LJ 2165, the Calcutta High Court also has taken similar view.
16. In view of the legal position, in a complaint for offence under Section 138 of the Act all that has to be made out is that the notice of demand was issued to the drawer within 15 days from the date the cheque was last returned for want of sufficient funds. Hence the contention of the learned Counsel for the petitioner that as in the present case the respondent did not issue notice of demand within 15 days after the cheque was first returned, the offence under section 138 of the Act cannot be said to have been committed, has to be rejected.
17. No other grounds are made out for quashing the proceedings pending in the lower court. These petitions are therefore dismissed.
18. Petitions dismissed.
