Bombay High Court High Court

M/S.Cotex vs State Of Maharashtra & Anr on 18 February, 2009

Bombay High Court
M/S.Cotex vs State Of Maharashtra & Anr on 18 February, 2009
Bench: A.S. Oka
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mst

           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                CRIMINAL APPELLATE JURISDICTION




                                                                                  
            CRIMINAL APPLICATION NO.3088 OF 2007

      M/s.Cotex                                              Appellant




                                                          
        versus
      State of Maharashtra & anr.                          Respondents


      Mr.A.H.Ponda for appellant.




                                                         
      Mr.P.A.Pol, APP for the State.


                   CORAM          :   A.S.OKA, J.
                   DATE           :   18th February 2009




                                             
      JUDGEMENT :

1.

I have heard detailed submissions made by

the learned counsel appearing for the

applicant. This is an application for grant of

special leave to prefer an appeal under sub

section 4 of section 378 of the Code of

Criminal Procedure, 1973. The applicant is the

complainant in a complaint filed under section

138 of the Negotiable Instruments Act, 1881

(hereinafter referred to as “the said Act of

1881”). By the impugned order the learned

Magistrate has acquitted the second respondent

(accused).

2. It will be necessary to refer to the facts

of the case in brief. According to the case of

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the applicant, the second respondent is the

proprietor of M/s.M.M.Knits Wears. As per the

orders placed by the second respondent, the

applicant sold and delivered cloth material to

the second respondent having total value of

Rs.14,77,717/-. Four cheques were issued by

the second respondent for payment of the price

of the goods sold. The said cheques were

dishonoured and communication of dishonour was

received by the applicant on 30th December

2005. A notice of demand was issued on 30th

December 2005.

The notice was received and was

replied by letter dated 13th January 2006. As

the demand was not complied with, the present

complaint was filed.

3. A perusal of the impugned order passed by

the learned Magistrate shows that the prior to

the dishonour of the aforesaid cheques on the

basis of which notice was issued on 30th

December 2005, the said cheques were deposited

by the applicant and were dishonoured. On the

basis of the dishonoured cheques, earlier a

communication at Exhibit-22 was issued by the

applicant. By the said communication the

second respondent was called upon to issue a

single demand draft in the sum of

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Rs.14,77,717=50 ps. which is the amount

payable under the four cheques. The said

communication at Exhibit-22 was made by E-mail.

The learned Judge held that the said

communication at Exhibit-22 was a notice of

demand as contemplated by clause (b) of proviso

to Section 138 of the said Act of 1988. The

said communication at Exhibit P-22 is dated 9th

November 2000. The learned Judge relied upon

the decision of the Apex Court in the case of

Krishna Exports and others Vs. Raju Das

([2006]1-SCC

[Cri]-350) and held that the

complaint based on the second dishonour and

second demand made on the basis of the second

dishonour cannot be entertained. Therefore, he

has passed an order of acquittal.

4. The learned counsel for the applicant

submitted that the Apex Court in the case of

Krishna Exports (supra) has followed its

earlier decision in the case of Sadanandan

Bhadran Vs. Madhavan Sunil Kumar (1998-SCC

[Cri]-1471). He submitted that the decision in

the case of Sadanandan (supra) is delivered

28th August 1998. He invited my attention to

the proviso to clause (b) of section 142 of the

said Act of 1881 inserted by amending Act No.55

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of 2002 which was brought into force from 6th

February 2003. He pointed out that prior to

the said amendment, the Court did not have

power to extend the period of limitation

provided in clause (b) of section 142 of the

said Act of 1881 and by virtue of said proviso

which was brought in force with effect from 6th

February 2003, now the Court has a power to

extend the period of limitation provided in

clause (b) of Section 142 of the said Act of

1881. He submitted that the Apex Court in the

case of

Sadanandan (supra) has held that the

complaint filed after the second dishonour was

not maintainable. He submitted that the said

view is taken only on the ground that if the

said complaint was entertained, the period of

limitation provided under section 142 will be

made otiose. He submitted that now with effect

from 6th February 2003, the Court of the

learned magistrate is empowered to extend the

period of limitation and, therefore, the law

laid down by the Apex Court in the case of

Sadanandan (supra) will have no application to

the complaints filed after 6th February 2003.

He submitted that in the present case the

objection regarding bar of limitation could not

have been entertained in view of the decision

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of Division Bench of this court in case of

State of Maharashtra vs. Vasant Shankar

Mhasane and another (1993-Cri.L.J.-1134). He,

therefore, submitted that the complaint filed

by the applicant could not have been thrown out

by the Trial Court on the basis of the law laid

down by the Apex Court in the case of

Sadanandan (supra) and Krishna Exports (supra).

He submitted that the second deposit of the

cheque was on the instructions of the 2nd

accused.

5. I have carefully considered the

submissions. As far as factual aspect is

concerned, there is no dispute that the cheques

subject matter of the complaint were

dishonoured earlier and a demand was made by

the applicant on 9th November 2000 by a

communication at Exhibit-P-22. It is also not

in dispute that the said demand is a demand

within the meaning of clause (b) of section 138

of the said Act of 1881. There is no reference

to the first dishonour and the said demand in

the complaint and the complaint is based on

subsequent dishonour of the same cheques and

notice of demand issued on 30th December 2005.

The complaint has been filed on 24th January

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2006.

6. On plain reading of section 138 of the said

Act of 1881 the cause of action for filing a

complaint arises when the drawer of the cheque

fails to make payment of the amount of money to

the payee or to the holder in due course of the

cheque within a period of fifteen days from the

date of receipt of the notice of demand under

clause (b) of section 138. The cause of action

as pleaded in the present complaint is on the

basis of

subsequent dishonour and notice of

demand dated 30th December 2005.

7. The submission of the learned counsel for

the applicant is that only as per the

instructions of the accused the cheques were

redeposited. He submitted that on the basis of

the first demand made in November 2005 a

complaint could have been filed on 24th January

2006 by extending the period of limitation by

exercising the power under the proviso to

clause (b) of section 142 of the said Act of

1881 which was brought into force on 6th

February 2003. His submission is that the law

laid down in the case of Sadanandan (supra)

will now be no longer applicable to the

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complaints filed after 6th February 2005.

8. It will be necessary to refer to what is

held by the Apex Court in the case of

Sadanandan (supra). Paragraphs 7 and 8 of the

said decision read thus :-

“7. Besides the language of Sections 138
and 142 which clearly postulates only one
cause of action, there are other

formidable impediments which negate the
concept 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.

                             again

           8.    The    other  impediment   to   the

acceptance of the concept of successive

causes of action is that it till make the
period of limitation under clause (c) of
Section 142 otiose, for, a payee who
failed to file his complaint within one
month and thereby forfeited his right to
prosecute the drawer, can circumvent the
above limitative clause by filing a
complaint on the basis of a fresh
presentation of the cheque and its

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dishonour. Since in the interpretation
of statutes, the court always presumes
that the legislature inserted very part
thereof for a purpose and the legislative
intention is that every part should have

effect, the above conclusion cannot be
drawn for that will make the provision
for limiting the period of making the

complaint nugatory.” (Emphasis added)

The submission of the counsel for the applicant

could have been accepted if the decision of the

Apex Court was only on the ground incorporated

in paragraph 8 of the said decision. Paragraph

8 of the said decision records that the what is

mentioned

the
therein
ig is the other impediment

way of entertaining such a complaint.

in

The

other impediment was that when the Apex Court

decided the case before it, there was no

provision under the said Act of 1881 for

extending the period of limitation. Obviously,

to the complaints filed after 6th February

2005, the law as amended will apply but the

main reason given by the Apex Court is not the

bar of limitation but it is the reason

incorporated in paragraph 7 thereof. What has

been held by the Apex Court is that sections

138 and 142 contemplate only one cause of

action. The Apex Court held that for dishonour

of one cheque there can be only one offence and

the said offence is committed by the drawer

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immediately on his failure to make payment

within fifteen days of the receipt of notice in

terms of clause (b) of proviso to section 138.

The Apex Court further observed that for

similar failure after service of fresh notice

on a 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. The Apex

Court held that the question is not of waiver

of the right
ig 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. In

paragraph 9 of the said decision the Apex Court

has reiterated that once the complainant gives

notice on the basis of first dishonour, he

forfeits the said right for in case of failure

of the drawer to pay the money within the

stipulated time after the service of second

notice after second dishonour.

9. In view of what is held by the Apex Court

in paragraph 7 in the case of Sadanandan

(supra), merely because the statutory provision

empowering the Court to extend the period of

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limitation is applicable to the present

complaint, it cannot be said that the decision

of the Apex Court will not apply.

10. In the circumstances, the learned Judge

was right in holding that the complaint could

not have been entertained. Hence, no case is

made out for grant of special leave to prefer

an appeal. The application is rejected.





                                     
    11.     It   is made clear that       the    observations

    made    in
                       
                 this order shall not be construed                as

    any    finding     on the rights and liabilities              of
                      
    the parties.



                                      (A.S.OKA, J.)
      
   






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