1999 JTR(J&K) 273
2001 1 CivCC 222 ; 2000 CrLJ 3625 ; 2001 1 RCR(Cri) 20 ; 2000 KHC 2640
IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
A.K. Goel, J.
Harpreet Hosiery, Rehari - Appellant
Versus
Nitu Mahajan - Respondent
Cr. Acquittal Appeal No. 62/1999
Decided On : 18 October, 1999
A fresh cause of action accrues on each presentation and dishonour of a cheque, but once a notice is issued under Section 138(b) of the Negotiable Instruments Act, the right to file a complaint arises and the period of one month for filing the complaint is 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.
Act Referred :NEGOTIABLE INSTRUMENTS ACT : S.138, S.142
NEGOTIABLE INSTRUMENTS ACT - SECTION 138 - DISHONOUR OF CHEQUE - CAUSE OF ACTION - FRESH CAUSE OF ACTION ACCRUES ON EACH PRESENTATION AND DISHONOUR OF CHEQUE - COMPLAINT FILED BEFORE EXPIRY OF 15 DAYS FROM DATE OF RECEIPT OF NOTICE BY DRAWER IS PREMATURE.
Fact of the Case:
Appellant filed a complaint under Section 138 of the Negotiable Instruments Act and Section 420 of the RPC against the respondent for issuing six cheques that were dishonoured upon presentation. The appellant alleged that the respondent had no account in the bank and that the cheques were returned with the memo "Refer to drawer." The appellant claimed to have issued four notices to the respondent, the last of which was sent on 25-4-92, and filed the complaint on 9-5-92.
Finding of the Court:
The court held that the complaint was premature as it was filed before the expiry of 15 days from the date of receipt of the notice by the respondent. The court also held that a fresh cause of action accrues on each presentation and dishonour of the cheque, but once a notice is issued under Section 138(b) of the Negotiable Instruments Act, the right to file a complaint arises and the period of one month for filing the complaint is 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.
Issues: 1. Whether each presentation and dishonour of a cheque gives rise to a fresh cause of action in favour of the holder of the cheque? 2. Whether the complaint was filed prematurely?
Ratio Decidendi: The court relied on the Supreme Court decision in Sadanandan Bhadran v. Madhavan Sunil Kumar, which held that on each presentation of the cheque and its dishonour, a fresh right, not a cause of action, accrues in favour of the holder of the cheque. The court also relied on the Supreme Court decision in M/s SIL Import, USA v. Exim Aides Silk Exporters, Bangalore, which held that once a notice is issued under Section 138(b) of the Negotiable Instruments Act, the right to file a complaint arises and the period of one month for filing the complaint is 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.
Final Decision: The court dismissed the appeal, holding that the complaint was premature as it was filed before the expiry of 15 days from the date of receipt of the notice by the respondent.
NEGOTIABLE INSTRUMENTS ACT - SECTION 138 - DISHONOUR OF CHEQUE - CAUSE OF ACTION - FRESH CAUSE OF ACTION ACCRUES ON EACH PRESENTATION AND DISHONOUR OF CHEQUE - COMPLAINT FILED BEFORE EXPIRY OF 15 DAYS FROM DATE OF RECEIPT OF NOTICE BY DRAWER IS PREMATURE.
Fact of the Case:
Appellant filed a complaint under Section 138 of the Negotiable Instruments Act and Section 420 of the RPC against the respondent for issuing six cheques that were dishonoured upon presentation. The appellant alleged that the respondent had no account in the bank and that the cheques were returned with the memo "Refer to drawer." The appellant claimed to have issued four notices to the respondent, the last of which was sent on 25-4-92, and filed the complaint on 9-5-92.
Finding of the Court:
The court held that the complaint was premature as it was filed before the expiry of 15 days from the date of receipt of the notice by the respondent. The court also held that a fresh cause of action accrues on each presentation and dishonour of the cheque, but once a notice is issued under Section 138(b) of the Negotiable Instruments Act, the right to file a complaint arises and the period of one month for filing the complaint is 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.
Issues: 1. Whether each presentation and dishonour of a cheque gives rise to a fresh cause of action in favour of the holder of the cheque? 2. Whether the complaint was filed prematurely?
Ratio Decidendi: The court relied on the Supreme Court decision in Sadanandan Bhadran v. Madhavan Sunil Kumar, which held that on each presentation of the cheque and its dishonour, a fresh right, not a cause of action, accrues in favour of the holder of the cheque. The court also relied on the Supreme Court decision in M/s SIL Import, USA v. Exim Aides Silk Exporters, Bangalore, which held that once a notice is issued under Section 138(b) of the Negotiable Instruments Act, the right to file a complaint arises and the period of one month for filing the complaint is 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.
Final Decision: The court dismissed the appeal, holding that the complaint was premature as it was filed before the expiry of 15 days from the date of receipt of the notice by the respondent.
Advocate For Appellant: Rupinder Singh
Advocate For Respondent: Kamal Chopra
1. This appeal is directed against the judgment passed by the learned Sub Judge, Judicial Magistrate, Ist Class, Jammu in a file No. 9/Criminal dated 27-3-95. By means of impugned judgment, learned trial Court had dismissed the complaint filed by the appellant under Section 138 of the Negotiable Instruments Act and 420, RPC.
2. As per case of the appellant, respondent had issued six cheques of different amounts between 18-11-91 to 23-12-91. When these were presented for encashment, those were dishonoured. Amount covered by cheques related to purchase of hosiery goods and readymade garments by respondent from the appellant towards the price of such articles. Appellant further alleges that he was assured by respondent that whenever cheques are presented those would be encashed.
3. It is in these circumstances appellant was induced to part with the goods. This was also alleged to be the result of dishonest intention of the respondent who never intended to pay the amount. This plea was strengthened because the respondent had no account in the bank and cheques were returned with the memo "Refer to drawer".
4. Appellant claims that first notice was issued on 25-2-92 which could not be served because of the collusion between the respondent and postman and false endorsement was made to the effect that the respondent was not at his business. He again served a notice which is stated to have been issued on 7-3-92, fate of this was also like the previous one. A third notice is also claimed to have been issued by the appellant which was followed by last and fourth notice dated 25-4-92.
5. Before issuance of last notice, appellant had represented the cheques for encashment, which were dishonoured on 20-4-92. It was thereafter, notice was issued on 25-4-92 by registered post, under certificate of posting and one of its copy having been pasted at the business premises of the respondent. On these assertion complaint above referred was filed.
6. After recording preliminary evidence, notice was issued to respondent for his appearance by the trial Court. Thereafter evidence was recorded on behalf of appellant. It may be incidentally pointed out that issuance of cheques and dishonour are admitted by respondent, however his specific case is that cash payment was made in lieu of an amount of these cheques which were to be returned by the respondent. Those were not returned. Receipt of notice was also denied.
7. Another fact that needs to be noticed is that after the last dishonour of cheques on 20-4-92, notice was issued on 25-4-92 by three modes referred to hereinabove. Photograph of pasting of notice has also been produced on record by the appellant. The complaint before the trial Court was presented on 9-5-92 i.e. on 14 day.
8. As per requirement of Sections 138 and 142 of the Negotiable Instruments Act, after the intimation of dishonour of a cheque is received by the drawee/holder in due course as the case may be, within 15 days of receipt of intimation of such dishonour, notice is required to be issued to the drawer of the cheque in question. Under law drawer has got further period of 15 days to make the payment from the receipt of such notice of dishonour of the cheque in question. It is only thereafter that an action under Section 138 initiated against the defaulting party.
9. As per narration of the facts above, cheques were initially dishonoured when first notice dated 25-2-92 was issued. Under law a cheque can be presented number of times during the period of its validity. This is both in accordance with the provisions of Negotiable Instruments Act as well as per banking practice. This may give a right to a litigant.
10. Allowing 15 days time to a party to make the payment on receipt of notice of demand has a laudable purpose behind it to enable such a person to make the payment of the cheque in question which could not be encashed. In a given situation possibility being there of an honest drawer issuing a cheque awaiting payments or expecting clearance of his cheques etc. deposited in his account can be there, so issuing cheque in such circumstances bona fide cannot be completely ruled out. Period of 15 days after receipt of notice gives another chance to such a drawer to clear the default.
11. Next question the needs consideration is whether each presentment of cheque for encashment to the banker gives a new cause of action in favour of such a litigant who keeps on presenting the cheques for encashment as in the present case or not.
12. Whether or not cause of action would arise once the cheque is dishonoured and its notice is received by drawer like respondent, or on every subsequent presentment and dishonour would confer a fresh cause of action. This matter need not detain us any further. In this behalf reference can be made in AIR 1998 SC. 3043 : (1998 Cri LJ 4066), Sadanandan Bhadran v. Madhavan Sunil Kumar. The relevant paragraph of this judgment is extracted hereunder (Para 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 favour. He may, therefore, without taking per-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."
13. Shri Rupinder Singh learned Counsel for the appellant forcefully urged that with each presentation and the dishonour of the cheques, independent cause of action accrues in favour of his client to maintain the complaint. This argument has simply to be rejected and it also cannot hold the field, in view of the decision of SC in AIR 1999 SC 1609 : (1999 Cri LJ 2276), M/s SIL Import, USA v. Exim Aides Silk Exporters, Bangalore.
14. Reliance was placed by Shri Singh in support of his submission on 1993 Cri LJ 1751 (Orissa), Janardhan Mohapatra v. Saroj Kumar Choudhary. This judgment is not at all attracted to the facts of the case under consideration
15. It may also be noticed here even if what was urged in the complaint as well as during the course of hearing of this appeal that cause of action accrued in favour of the appellant on 20-4-92 the date when cheques were dishonoured. Thereafter notice was issued to respondent. It may be clarified that 15 days clear time has to be allowed to the accused like respondent for making payment after receipt of such notice. What to talk allowing this period of 15 days, the complaint itself was filed in the instant case on 9-5-93 on the 14th day. Thus on this ground also the complaint was premature.
16. No other point is urged.
17. As a result of aforesaid discussion, it is clear, there is no merit in this appeal which is accordingly dismissed.
Petition dismissed.