JUDGMENT
S. Ravindra Bhat, J.
1. The petitioners invoke inherent jurisdiction of this Court under Section 482 of the Code of the Criminal Procedure 1973, for quashing a criminal complaint by which the respondent (hereafter called the complainant) had alleged commission of offences under Sections 138 and 142 Of the Negotiable Instruments Act, 1881 (hereafter called “the Act’`)
2. The complainant had alleged that a petitioner had issued a cheque on 5- 7-1996 for the sum of Rs. 1,60,165/- and when presented, the cheque was dishonoured. ‘Upon this event the complainant issued a legal notice on 10-7-1996 to the petitioners demanding payment of the amount. It was alleged that the petitioners did not heed the notice after receiving it, on 17th of July 1996 and instead by a letter dated 13th of August 1996 asked to the complainant to the present the cheque again assuring that it would be honoured at that instance.” The complainant further alleged that after receiving the assurance the cheque was presented but without any success; because even on this occasion the instrument was returned with the remark “exceeds arrangement”.’
3. The complainant issued a legal notice on 14th September 1996 to the petitioners demanding payment of the amount of within 15 days of receipt of the notice; on receiving no response it preferred to the complaint on 7th October 1996. ‘After summons were issued, on the basis of the complaint and the materials disclosed, the petitioner moved an application alleging that the complaint and criminal proceedings were not maintainable as they were time- barred. The trial court declined the application by its order. ‘In the circumstances, the petitioner stands before this Court seeking interference under the inherent jurisdiction.’
4. It was contented on behalf of the petitioner by learned Counsel Ms. Girija Verma that the complaint was clearly time-barred in view of the provision contained in Section 138 of the Act. Counsel submitted that the petitioner ought to have initiated the complaint within the time stipulated 30 days after issuance of the notice. ‘A proper reckoning of the period would mean the limitation for filing the complaint itself ended sometime in the month of August; however the complaint was filed on 7th October, 1996 and therefore it was clearly beyond the period of limitation.’
5. Counsel relied upon the judgment of this Court reported as S.V. Muthye v. State 2002 (62) DRJ 378 for the proposition that provisions of Section 473 of the Criminal Procedure Code or even provisions of the Limitation Act would be inapplicable for the purposes of offences under Sections 138 and 142 of the Act. ‘Ms. Verma also relied upon the decision of the Supreme Court in Sadanandan Bhadran v. Madhavan Sunil Kumar . She relied upon the ruling to the effect that liability of the drawer for prosecution of the offence committed arises once, and the complaint has to be filed within one month as per Section 142.’ The court had clearly and categorically declared that a combined reading of the two provisions leaves no room for doubt that cause of action within the meaning of the expression under Section 142 arises and can arise only once.’Counsel also relied on paragraph 7 of that judgment to say that besides the language of Section 138 and 142 there are other impediments which negate the concept of successive causes of action, i.e the dishonour of a cheque can lead to one offence and such offence committed by the drawer immediately on his failure to make the payment within 15 days of receipt of the notice served in accordance with Section 138 would lead to one cause, in respect of the cheque, even though a separate right to the amount may otherwise exist.
6. The petition was resisted by Mr. Arun Kathpalia, learned Counsel, who submitted that the petitioners cannot be heard to contend that the complaint was not maintanable. It was submitted that even in Sadanandan Bhadran’s case the court had recognized that in the normal course of commercial transactions, parties do present cheques more than once, after dishonour. Counsel submitted that the petitioner’s letter, asking the complainant to re-present the cheque, and its subsequent dishonour, resulted in a fresh cause, for which the previous notice, was irrelevant. Therefore, the limitation had to be reckoned from the date of issuance of the fresh notice. But for that notice, the complainant would have initiated the proceedings within thirty days after disonour and issuance of notice on the earlier occasion.
7. Mr. Kathpalia relied upon the judgment of the Supreme Court in Dalmia Cement (Bharat) -vs- Galaxy Traders AIR 2001 SC 676 in support of his submission that there can be circumstances where the complaint can be maintained legally, even after issuance of a notice, and expiry of period of limitation, provided the proceedings are initiated within one month of issuance of the second notice, after dishonour. He also relied upon the judgment of the Bombay High Court in M/s Baroda Ferro Alloys and Industries Ltd-vs- M/s Span Overseas Ltd 1999 Cr.LJ 1820.
8. Section 138 occurs in Chapter XVII of the Act (as it stood at the relevant time) dealt with penalties in case of dishonour of certain cheques for insufficiency of funds in the account of the drawer. It enacts that 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 the 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. The Proviso to the Section visualizes a situation whereby a person can be charged with the offence under Section 138 only when such cheque is presented to the bank by the payee, within six months from the date on which it is drawn or within the period of its validity, whichever is earlier as contemplated by Clause (a) of the proviso. The payee or the holder in due course of the cheque, 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, as contemplated under Clause (b) of the said proviso; and the drawer of such cheque fails to make the payment of the said amount of money to the payee within fifteen days of the receipt of the said notice, as contemplated in Clause (c) of the proviso, the payee is entitled to file a complaint under Section 138 of the Act against such drawer.
9. It is, evident that the cheque issued by the drawer to the payee should be for discharge of any debts or liability and it must be returned to the payee by the bank with the endorsement that the cheque is returned for insufficiency of funds. However, when the cheque is dishonoured for insufficiency of funds and before filing of complaint against the drawer for the offence under Section 138 certain statutory formalities are required to be complied with by the payee are provided in the proviso to Section 138 of the Act. There are three elements:
(i) the payee has to present the cheque to the bank during the validity of the same i.e. either six months or within the period of its validity whichever is earlier;
(ii) the payee is required to issue notice in writing to the drawer within fifteen days of the receipt of the information by him from the bank demanding the payment regarding return of cheque as unpaid; and
(iii) if the drawer of such cheque fails to make the payment of the amount of money to the payee within fifteen days from the receipt of such notice, the payee is entitled to file a complaint against such drawer for the offence under Section 138 of the Act.
10. The limitation for filing the complaint is enacted by Section 142 of the Act; it prescribes that no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138 of the Act. The cause of action contemplated under the provisions of Clause (c) accrues immediately on completion of fifteen days in case the drawer fails to make the payment to the payee and one month’s limitation for filing complaint under Clause (b) of Section 142 of the Act would commence from the 16th day. The payee has to necessarily file a complaint within one month from that date. If he to fails to do so within one month from the date cause of action arises or accrues to him, then, the complaint cannot be entertained by the Court, in view of the bar under Section 142 of the Act.
11. In view of the above discussion, what has to be determined is whether the issuance of the letter dated 13-8-1996 by the petitioner, to the complainant, leading to fresh presentation of the same cheque, and its subsequent dishonour, resulted in a fresh cause of action, unconnected with the previous one, entitling it to reckon the period of limitation from the date of the second dishonour, of the same cheque. The contents of the letter/ notice dated 10.7.1996 would show that all the material particulars are mentioned by the applicant/payee in the said letter. The applicant requested the non- applicant/drawer to make the payment of Rs. 1,60,165/- since the cheque issued by the drawer for that amount was dishonoured by the bank. even though they were again presented to the bank for encashment on two occasions. This letter, in view of its contents, can be construed as notice contemplated under Sub-clause (b) of the proviso to Section 138 of the Act. The complainant gave reference to the fact of dishonour of cheques in the said letter. The same is in writing and the amount is also demanded by the complainant. All these factors fulfilll the requirement of notice contemplated in Clause (b) and, therefore, I have no hesitation to hold that the communication/letter dated 10.7.1996 can be construed as notice provided in Clause (b) of the proviso to Section 138 of the Act.
12. As far as the notice dated 14.9.1996 is concerned, it is a subsequent communication by the complainant to the petitioner reiterating the same demand of return of money made by the applicant in the earlier notice; the difference between these two communications is the letter dated 14.9.1996 adverts to an intervening letter of the petitioner dated 13-8-1996, requesting the complainant to present the cheque afresh.
13. In Sadanandan Bhadran’s case (supra) the Supreme Court held as follows:
If we were to proceed on the basis of the generic meaning of the term ’cause of action’ certainly each of the above fact would constitute a part of the cause of action but then it is significant to note that Clause (b) of Section 142 gives it a restrictive meaning, in that, it refers to only one fact which will give rise to the cause of action and that is the failure to make the payment within 15 days from the date of the receipt of the notice. The reason behind giving such a restrictive meaning is not far to seek. 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 cause of action within the meaning of Section 142(c) arises – and can arise – only once.
8. Besides the language of Sections 138 and 142 which clearly postulates only one cause of action there are other formidable impediments which negates 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 provision of 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 one. At 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.
9. The other impediment to the acceptance of the concept of successive causes of action is that it will 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 dishonour. Since in the interpretation of statutes the Court always presumes that the legislature inserted every part thereof for a purpose and the legislative intention is that the 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.
10. 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 favor. 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.
11. For the foregoing discussion this appeal stands dismissed as the appellant had earlier taken recourse to Clause (b) of Section 138 of the Act but did not avail of the cause of action that arose in his favor under Section 142(b) of the Act.
14. In M/s. Dalmia Cement (Bharat) Limited ‘s case (supra) the Supreme Court reiterated the position taken in Sadanandan Bhadran, in the following terms:
In Sadanandan Bhadran v. Madhavan Sunil Kumar , this Court held that Clause (a) of the proviso to Section 138 did not put any embargo upon the payee to successively present a dishonoured cheque during the period of its validity. On each presentation of the cheque and its dishonour a fresh right and not cause of action accrues. The payee or holder of the cheque may, therefore, without taking pre-emptory action in exercise of his right under Clause (b) of Section 138 of the Act, 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 a notice under Clause (b) of Section 138 of the Act is received by the drawer of the cheque, the payee or the holder of the cheque forfeits his right to again present the cheque as cause of action has accrued when there was failure to pay the amount within the prescribed period and the period of limitation starts to run which cannot be stopped on any account. This Court emphasised that “needless to say the period of one month from filing the complaint will be reckoned from the date immediately falling the day on which the period of 15 days from the date of the receipt of the notice by the drawer expires.
15. The observations of the Court in the above extract shows that once notice under Clause (b) of Section 138 of the Act is received by the drawer of the cheque, the payee forfeits his right to present the cheque again, as the cause of action accrues, in the event of failure to pay the amount within the prescribed period; the period of limitation commences. Thus, the bar of Section 142 operates. The matter was again re-visited, as it were, in the recent decision of the Supreme Court, in Prem Chand Vijay Kumar v. Yashpal Singh . It would be instructive to notice both the facts of the case, as well as the ultimate conclusions, as the narrative is somewhat similar to the facts of this case:
The complaint was filed by the appellant alleging that in the year 1995 Respondent 1 had issued a cheque for a sum of Rs. – 5,15,053.72 representing balance amount payable to the appellant for supply of goods to a partnership firm of which the respondents are partners. It was indicated that the total amount payable was Rs. 49,21,482.72 as against which the accused persons had paid Rs. 44,06,429, leaving balance of Rs. 5,15,053.72. A cheque [drawn on Oriental Bank of Commerce, Ladwa Branch (Account No. 954)] was issued for the same amount on 27-1-1995. The cheque was signed by Respondent 1 Yashpal Singh, for the firm and Respondent 2 Nirpal Singh, was a partner of the partnership firm, namely, M/s Sat Guru Rice Traders, New Delhi. The cheque was dishonoured due to inadequacy of funds in the account. Intimation was given on 6-2-1995. Notice was issued by the appellant demanding payment by lawyer’s notice dated 17-2-1995. The amount was not paid. The respondents requested the appellant for some time to make the payment. On the request of the respondents, the cheque was again presented on 6-7-1995 and it was again dishonoured due to inadequacy of funds. Intimation in this regard was sent to the appellant on 10-7-1995. Again, lawyer’s notice was sent on 24-7-1995. Reply was sent by the respondents on 10- 8-1995 refuting the allegations contained in the legal notice. The complaint was lodged on 28-8-1995. Charges were framed.
4. The respondent filed an application for discharge which was dismissed by the trial court by order dated 29-1-2002. The order was challenged before the High Court which by the impugned judgment held that the requirements of Section 142 of the Act were not met.
xxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxx 11. 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. 12. As noted in Sadanandan Bhadran case 1 once a notice under Clause ( b ) of Section 138 of the Act is received by the drawer of the cheque, the payee or holder of the cheque forfeits his right to again present the cheque as cause of action has accrued when there was failure to pay the amount within the prescribed period and the period of limitation starts to run which cannot be stopped on any account.
13. One of the indispensable factors to form the cause of action envisaged in Section 138 of the Act is contained in Clause ( b ) of the proviso to that section. It involves the making of a demand 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. If no such notice is given within the said period of 15 days, no cause of action could have been created at all.
14. Thus, it is well settled that if dishonour of a cheque has once snowballed into a cause of action it is not permissible for a payee to create another cause of action with the same cheque.
15. In SIL Import, USA v. Exim Aides Silk Exporters 3 it was held that the language used in Section 142 admits of no doubt that the Magistrate is forbidden from taking cognizance of the offence if the complaint was not filed within one month of the date on which the cause of action arose. Completion of the offence is the immediate forerunner of rising of the cause of action. In other words, cause of action would arise soon after completion of the offence and period of limitation for filing of the application starts running simultaneously.
16. It is to be noted that though a somewhat confusing statement was made by the respondents regarding the receipt of the first lawyer’s notice, however, what was kept alive was a fresh right and not cause of action. Therefore, Sadanandan Bhadran case 1 was rightly applied. The impugned judgment does not suffer from any infirmity to warrant interference.
16. In view of the above discussion, particularly the decision in Prem Chand Vijay Kumar, there can longer be any doubt or ambiguity about the correct legal position. Even if a drawer asks the payee, after receiving notice of dishonour, to present the cheque again, unless the complaint is presented within the time prescribed, reckoned from the date of issuance of notice of dishonour, the payee, by virtue of the bar under Section 142, forfeits his right to remedy under the Act; however, he has a “fresh right” which may be otherwise enforceable.
17. The view taken by the Bombay High Court, with due respect, in M/s Baroda Ferro Alloys (supra) is not consistent with the law declared by the Supreme Court. Besides, this Court, in other judgment, i.e Archana Publication (Pvt) Ltd. v. State of Delhi 2002 (001) DCR 0154 (Del) has taken a contrary view; the Bombay High Court itself appears to have taken a different view in Prashant Prabhakarrao Gite v. V.S.K. Sarkar 2002 (108) CRLJ 3001.
18. In view of the above discussion, I am of the considered opinion that with the issuance of the notice, by the complainant on 10th July, 1996, the cause of action “snowballed” and could not have been arrested, or extended in the manner contended by the complainant. The bar in Section 142 of the Act came into operation, at the end of 30 days from the expiration of the fifteen days period of demand, as per the notice of dishonour. The complaint was initiated well after that period, i.e 7-10-1996; it was time barred.
19. For the above reasons, this petition must succeed. Accordingly, the criminal complaint initiated by the respondent against the petitioner before the Metropolitan Magistrate, is hereby quashed. The petition is allowed in the above terms, without any order as to costs.