This is a criminal revision challenging the dismissal of a Section 138 complaint. The court held that once a cause of action arises from the first dishonour and notice, a second notice after re-presentation does not create a new cause of action, confirming the dismissal was proper.
Criminal revision petition dismissed as the complaint was time barred.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Crl.Rev.No.717 of 2002
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In the High Court of Punjab and Haryana at Chandigarh
Crl.Rev.No.717 of 2002 Date of decision: 16.8.2010
Baldev Singh
......Petitioner
Versus
Mahesh Kumar
.......Respondent
CORAM: HON'BLE MRS. JUSTICE SABINA
Present: Mr.D.c.Dhaula, Advocate, for the petitioner.
Mr.C.B.Goel, Advocate, for the respondent.
SABINA, J.
This petition has been filed under Section 401 of the Code of Criminal Procedure (“Cr.P.C” for short) challenging the order dated 8.2.2002 passed by the Additional Sessions Judge, Rupnagar, whereby complaint filed by the petitioner under Section 138 of the Negotiable Instruments Act, 1881 (for short- “ the Act”) was dismissed.
Brief facts of the case, as noticed by the Appellate Court in para No. 2 of its judgment, are reproduced herein below:-
“In nutshell, the facts of the case were that
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Baldev Singh complainant filed a complaint under Section 138 of the Negotiable Instruments Act, on the allegations that he entered into agreement regarding the sale of land of Joginder Singh and Attar Kaur and a suit was pending in the Court of Sub Judge, Kharar and the appeal was pending in the Court at Ropar; that the accused and his father agreed to purchase the land and then the complainant was induced to withdraw the suit and the appeal and the accused agreed to pay the balance amount of Rs.1,50,000/- of the share of the complainant and issued cheque bearing No.926417 dated 30.6.1997, payable at Haryana State Co-operative Apex Bank, Limited, Chandigarh, branch at Panchkula; that the accused promised to pay the amount, in cash on 30.6.1997 and otherwise the complainant could present the cheuqe in the bank or could encash the same, on the basis of the agreement, dated 10.2.1997; that the complainant presented the cheque with his banker, Punjab National Bank, Zirakpur in saving bank account No.3548/12 that the said cheque was sent for clearance to the banker of the accused; that the cheque was returned to the complainant on 10.7.1997, unpaid and a notice was accordingly issued to the accused on 18.7.1997 vide registered AD; that the accused however,
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premises that the cheque would be encashed, if presented again; that the said cheque was again presented with his banker, by the complainant and then sent for clearance, but it was returned with the remarks 'insufficient funds' alongwith the memos: that at the request of the accused, the said cheque was again presented on 3.12.1997. But it was received back with the endorsement 'insufficient funds' on 9.12.1997 and thereafter legal notice, dated 11.12.1997, through registered AD was sent, but the same had been refused by the accused; that the accused despite having been sent the notice, failed to make the payment. Hence, the complaint.”
Learned counsel for the petitioner has submitted that the petitioner had presented the cheque again for encashment on the assurance given by the respondent and hence, the complaint could not be said to be barred by limitation. In support of his arguments, learned counsel has placed reliance on M/s Dalmia Cement (Bharat) Ltd. vs. M/s Galaxy Traders and Agencies Ltd. And others AIR 2001 Supreme Court 676 , wherein it was held as under:-
“To constitute an offence under Section 138 of the Act the complainant is obliged to prove its ingredients which include the receipt of notice by the accused under clause
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(b). It is to be kept in mind that it is not the 'giving' of the notice which makes the offence but it is the 'receiver' of the notice by the drawer which gives the cause of action to the complainant to file the complaint within the statutory period.”
Learned counsel for the respondent, on the other hand, has submitted that once a cheque is dishonoured and a notice has been issued to the accused then the cause of action arises from the said date. Giving of second notice, after re-presentation of cheques does not give a fresh cause of action. Learned counsel has placed reliance on Prem Chand Vinay Kumar vs. Yash Pal Singh PLR Vol.CXLI (2005-3) 712 , wherein in para Nos. 12 to 14, it was held as under:-
“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. In 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 cheuqe 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.
“Thus, it is well settled that if dishonour of a cheuq has once snowballed into a cause of action it is not
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permissible for a payee to create another cause of action with the same cheque.”
“In SIL Import, USA v. Exim Aides Silk Exporters, Bangalore, 1994(4) SCC 567 it was held that the language used in Section 142 admits of no doubt that the magistrate is forbidden from the 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 simultaneously running.”
Learned counsel for the respondent has also placed reliance on the judgment of the Apex Court in M/s Dalmia Cement's case (supra).
In the present case, admittedly, the cheque in question was presented for encashment and the same was returned unpaid by the bank due to insufficient funds. The complainant served a registered notice dated 18.7.1997 to the complainant. The respondent promised that if the cheque in question is again presented for encashment, the money would be paid. Thereafter, the cheque was presented for encashment but it was again dishonoured and a notice was issued through registered post on 11.12.1997 to the
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respondent.
The present case is duly covered by the decision given in Prem Chand's case (supra) . The relevant facts, as reproduced in para 2 of the said case, read as under:-
“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 16.8.1995 refuting the allegations contained in the legal notice. The complaint was lodged on 28.8.1995.”
Thus, the cause of action arose to the petitioner when the first notice was received by the respondent on account of dishonour of the cheques. In the present case, the first legal notice has been duly received by the respondent. Hence, the decision rendered in M/s Dalmia Cement's case (Supra) fails to advance the case of the petitioner. Rather this case is covered by the decision of the Apex Court in Prem Chand's case (supra). In these circumstances,
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Crl.Rev.No.717 of 2002
learned trial Court had rightly dismissed the complaint filed by the petitioner being time barred. No ground for interference by this Court is made out.
Accordingly, this petition is dismissed.
SABINA) JUDGE
August 16, 2010 anita
2 issues framed by the court
Whether a second notice after re-presentation of a cheque creates a fresh cause of action under Section 138 of the Negotiable Instruments Act.
Whether the complaint filed under Section 138 is time barred in light of the cause of action arising from the first notice.
Colour shows how this judgement treated each authority
M/s Dalmia Cement (Bharat) Ltd. vs. M/s Galaxy Traders and Agencies Ltd. And othersReferred¶24
M/s Dalmia Cement (Bharat) Ltd. vs. M/s Galaxy Traders and Agencies Ltd. And others AIR 2001 Supreme Court 676 · Who else cites this
Prem Chand Vinay Kumar vs. Yash Pal SinghFollowed¶29
Prem Chand Vinay Kumar vs. Yash Pal Singh PLR Vol.CXLI (2005-3) 712
2 provisions across 2 enactments
Baldev Singh
Mahesh Kumar
Sabina
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
