JUDGMENT
Giridhar Malaviya, J.
1. In view of the diversion of opinion in two cases decided by learned single judges, viz., in the cases of Smt. Kamal Sharma v. State of U. P. [1995] 32 ACC 239 and Mirza Mansoor Beg v. Riyazuddin [1996] AAC (Crl.) 22, J.C. Mishra J. has referred the matter to the Division Bench to resolve the conflict between the two decisions of learned single judges of this court.
2. The controversy is in respect of Section 138 of the Negotiable Instruments Act, 1881. The question involved is, that, if a party has issued a cheque to the other party and the cheque has been returned by the bank without obtaining payment with the request to send the cheque for encashment again and then the cheque is presented and still the payment is not obtained, the notice under Section 138 of the Negotiable Instruments Act would be necessary within 15 days from the return of the cheque for the first time or whether limitation would start running from the subsequent dishonour of the cheque without obtaining payment. While Rahim J. of this court in the case of Smt Kamal Sharma v. State of U. P. [1995] 32 ACC 239 held that the cheque if presented and dishonoured on each occasion enables the drawee of the cheque to issue notice within 15 days from the date of last presentation to launch prosecution under Section 138 of the Negotiable Instruments Act. N.B. Asthana J. relying upon a Division Bench judgment of the Kerala High Court in the case of N.C. Kumaresan v. Ameerappa [1992] 74 Comp Cas 848 ; [1992] 1 Kerala Crimes 23 held that the cause of action arose only on the first representation and the limitation started running from that date which could not be stopped by presenting the cheque again so as to have the fresh cause of action and fresh limitation.
3. The question was initially referred to in the case of Nagdeo Sons v. State of U. P. (Crl. Miscellaneous Application No. 3000 of 1996) connected with DCM Sri Ram Industries Ltd. v. Nagdev Sons (Crl. Revision No. 636 of 1996). Subsequently one more Criminal Miscellaneous Application No. 120 of 1998 of Ram Babu Gupta came up before J.C. Mishra J. involving the same question and he, while admitting this criminal miscellaneous application of Ram Babu Gupta, directed this case also to be listed before this Bench along with the first case mentioned earlier. The earlier two cases arose out of common orders passed by the courts below whereas the matter of Ram Babu Gupta arose from a different case and from a different district. That is why both the cases are before us. Before embarking on the controversy it would be proper to give a gist of the facts relating to the case of Nagdev Sons.
4. DCM Sri Ram Industries Ltd., Unit Daurala Sugar Works, Daurala, is engaged in the manufacture and sale of sugar. M/s. Nagdev Sons were appointed as agent of the sugar company who used to collect payment from the authorised dealers for supply of sugar. M/s. Nagdev Sons used to make payment of the price of sugar delivered by them to various dealers by their own cheques, bank drafts to Daurala Sugar Works. It appears that in pursuance of this scheme Nagdev Sons issued one cheque for Rs. 1,21,596 dated February 25, 1993 in favour of DCM Sri Ram Industries Ltd., Unit Daurala Sugar Works on Canara Bank, Ballimaran, Chandni Chowk, Delhi. Canara Bank returned the cheque on March 16, 1993, with the remarks “funds expected, present again”. It appears that DCM Sugar Mills sent a letter dated April 7, 1994, informing M/s. Nagdev Sons about the cheque being not cashed. M/s. Nagdev Sons by their letter dated April 22, 1993, informed the DCM Industries Ltd. that on March 16, 1993 their two cheques, each for a sum of Rs. 1,21,596 had been presented in the bank. Out of the two, one cheque had been cashed but the other cheque was returned by the bank with the endorsement “funds expected present again”. The said letter dated April 22, 1993 of Nagdev Sons further mentions that from March 17, 1993 up to March 31, 1993 their bank account had always sufficient funds to meet the amount of the cheque viz., Rs. 1,21,596, and, had the cheque been presented during that period, their bankers would have made the payment positively to the DCM Ltd. However the letter further said that their agency stood terminated on March 31, 1998 and including the commission and the security deposit of Rs. 50,000. Nagdev Sons were entitled to receive a sum of Rs. 1,31,000 from DCM Ltd. and as such it was stated that after adjusting the sum of Rs. 1,21,596 the balance should be sent to Nagdev Sons within three days from the receipt of the said letter. However, thereafter the same cheque of Rs. 1,21,596 was presented again for encashment on May 14, 1993 which was returned by the bank with the endorsement “funds insufficient”.
5. Consequently, on June 19, 1993, notice under Section 138 of the Negotiable Instruments Act was sent to Nagdev Sons which was received by them on June 22, 1993. By their reply dated June 25, 1993, Nagdev Sons reiterated their stand taken in their letter dated April 22, 1993, and demanded the balance of amount to be received by them within a week by a bank draft, failing which they proposed to take legal action for the recovery of the said amount. Having failed to recover the amount of Rs. 1,21,596 a complaint was filed by DCM Ltd. before the Chief Judicial Magistrate, Meerut, on July 22, 1993. After recording the statement under Section 200 of the Criminal Procedure Code on July 31, 1993, the magistrate summoned Nagdev Sons, Sri Madho Das Nagdev and Sri Lalit Nagdev on August 12, 1993. The summoned accused challenged the summoning order and also took the plea that the complaint under Section 138 of the Negotiable Instruments Act was barred by time. The Additional Chief Judicial Magistrate, Meerut, by his order dated September 26, 1995 rejected the plea of the accused and held the complaint to be within time. The accused preferred a revision against the said order. The Additional District and Sessions Judge by his order dated March 20, 1996, partly allowed the revision and held that the complaint under the Negotiable Instruments Act was barred by limitation as the cause of action arose from the date when the cheque was dishonoured for the first time which was on March 16, 1993, with the result that the complaint ought to have been filed by March 15, 1993. However he held that the complaint under Section 409 of the Indian Penal Code, 1860 was maintainable and the summoning order in respect of the said section was justified.
6. DCM Ltd. challenged the order of the Additional District and Sessions Judge dated March 20, 1996, by preferring Criminal Revision No. 636 of 1996 and Nagdev Sons challenged the same order so far as the complaint under Section 409 of the Indian Penal Code was held to be maintainable by preferring Criminal Miscellaneous Application No. 3000 of 1996. Both these matters were heard by a learned single judge and as indicated earlier on December 19, 1997, the learned single judge referred this matter to the Division Bench to resolve the conflict in the judgments reported in Smt. Kamal Sharma v. State of U. P. [1995] ACC 239 and Mirza Mansoor Beg v. Riyazuddin [1996] AAC (Crl.) 22. We have set out the facts of this case as the referring order of the learned single judge did not give the facts comprehensively. However since we have to decide only the controversy whether the limitation would start from the date when the cheque was dishonoured for the first time or whether it would start running from the successive dates on which the cheques were dishonoured, we need not go into the merits of the case at all.
7. The judgment of N.B. Asthana J. in Mirza Mansoor Beg v. Riyazuddin [1996] AAC (Crl.) 22 was primarily based on a Division Bench judgment of the Kerala High Court in the case of N.C. Kumaresan v. Ameerappa [1992] 74 Comp Cas 848 ; [1992] 1 Kerala Crimes 23 which held as follows (page 851):
“From the scheme of the provisions in Chapter 17 of the Act two features loom large. The first is that more than one cause of action on the same cheque is not contemplated or envisaged. The second is that, institution of prosecution cannot be made after one month of the cause of action. If more than one cause of action on the same cheque can be created, the consequence would be that the same drawer of the cheque can be prosecuted and even convicted again and again on the strength of the same cheque. The Legislature cannot be imputed with the intention to subject a drawer of cheque to repeated prosecutions and convictions on the strength of one cheque.”
8. It may be noticed that the correctness of this judgment of the Division Bench of the Kerala High Court was doubted by another Division Bench of the same High Court with the result that the question was referred to a Full Bench of the Kerala High Court. The Full Bench of the Kerala High Court in the case of S.K.D. Lakshmanan Fireworks Industries v. K.V. Sivarama Krishnan [1995] 84 Comp Cas 447 took the view that the decision in N.C. Kumaresan v. Ameerappa [1992] 74 Comp Cas 848 ; [19921 1 Kerala Crimes 23 cannot be approved as correct and had categorically observed as follows (page 464) :.
“Summarising our conclusion we would hold that N.C. Kumaresan v. Ameerappa [1992] 74 Comp Cas 848 ; [1992] 1 Kerala Crimes 23 has not been correctly decided. There is nothing in the provisions in Chapter XVII of the Act which will preclude the creation of successive causes of action on the basis of one and the same cheque. Section 142(b) only prescribes a period of limitation for filing a complaint with reference to a cause of action already accrued. The effect of the provision is only to bar a complaint filed on the basis of a cause of action which arose one month prior to the date of filing of the complaint. It cannot be construed as a provision barring the payee or holder in due course from taking necessary actions to complete a fresh cause of action in accordance with law so long as the cheque remains unpaid and filing a complaint on the basis of the fresh cause of action so created notwithstanding the bar against filing a complaint on the basis of the earlier cause of action.”
9. We are in complete agreement with the observations of the Full Bench of the Kerala High Court. It may also be mentioned that except the view of the Punjab and Haryana High Court in the case of Chahal Engineering and Construction Ltd. v. Verma Private Co. [1994] 1 Crimes 845 various other High Courts of this country have taken the view that presentation of a returned cheque to the bank for payment more than once was permissible.
10. We are of the view that the object of giving notice under Section 138 of the Negotiable Instruments Act before prosecuting the drawer is to enable him to make payment of the cheque which he had issued. It is expected that on getting the notice the drawer would immediately either make available the funds or negotiate with the payee to give him some more time so that he may arrange for the funds to enable the cheque to be cashed. It can be that there may be a genuine problem for a drawer who might have expected to receive some payment within a stipulated time as in the course of business every party expects a constant flow of payments in pursuance of supplies made by them. Accordingly there may be a real, genuine and valid request in such cases to wait for a short period so that money is received by the drawer and the cheque cashed. This may suit both the drawer of the cheque as also the drawee and without any fuss or further legal action the matter may be amicably settled by arranging the payment made in a short while. However there may be cases and cases where a cunning party knowing very well that it was impossible for that party to get any funds in the near future may just seek extension on the plea to arrange the funds meanwhile. The payee may feel that the time asked for was genuine and may accordingly resubmit the cheque for encashment again on the advice of the drawer. In such a case if it may be accepted that after the first presentation the cheque being dishonoured no action under Section 138 of the Negotiable Instruments Act can be taken on subsequent presentation and dishonouring of the cheque, that would not only be unjust but would prove to be a lacuna in the scheme of this Act, which could never be the intention of the Legislature. Consequently, it has to be held that on a cheque being dishonoured once, if the payee is asked to present the cheque again, and still the cheque is not cashed then the payee would be entitled to give to the drawer of the cheque a notice under Section 138 after the subsequent presentation of the cheque and the limitation would start running not from the date when the cheque was dishonoured for the first time but from the date it was dishonoured subsequently. Hence we find ourselves in agreement with the views of different High Courts that successive presentation of the cheque is permissible and the period of limitation would start running from the date of last presentation and dishonouring of the cheque.
11. Accordingly, it is held that the view taken in the case of Mirza Mansoor Beg v. Riyazuddin [1996] AAC (Crl.) 22 does not lay down the correct law. The view taken in the case of Smt. Kamal Sharma v. State of U. P. [1995] 32 ACC 239 is hereby approved.