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Mahadevan Sunil Kumar And Another v. Bhadran And Others
Factual and Procedural Background
The petitioners are accused in S.T 1205/89 before the Additional Judicial First Class Magistrate's Court, Kollam. The complaint, filed by respondents 1 and 2, alleges that on 31-7-89 the petitioners, along with the mother of the second petitioner, approached the first respondent seeking a loan of Rs. 60,000/-. It is alleged that the first respondent was induced to believe that the petitioners had sufficient funds in their bank account, leading to the disbursement of the loan amount to the first petitioner. The first respondent presented a cheque for payment on 1-9-89, which was dishonoured. After attempts to recover the amount failed and a second presentation of the cheque on 12-10-89 also resulted in dishonour, notices were sent to the petitioners. The second petitioner refused to accept the notice, and the first respondent did not receive acknowledgment of the notice sent to the first petitioner. No payment was made, prompting the filing of the complaint alleging offences under Section 138 of the Negotiable Instruments Act and Section 420 of the Indian Penal Code.
Legal Issues Presented
- Whether a complaint under Section 138 of the Negotiable Instruments Act can be filed based on the second presentation of a dishonoured cheque, given that no complaint was filed after the first dishonour.
- Whether the absence of receipt of the statutory notice by the first petitioner invalidates the prosecution under Section 138 of the Negotiable Instruments Act.
- Whether the second petitioner can be prosecuted under the said sections despite not having borrowed money or issued any cheque.
Arguments of the Parties
Petitioners' Arguments
- The cheque was first presented on 1-9-89 and dishonoured, constituting the cause of action for filing a complaint under Section 138; however, no complaint was filed at that time.
- No notice was served on the petitioners following the first dishonour, which is a prerequisite for prosecution.
- The second presentation of the cheque is not legally valid for prosecution under Section 138.
- The first petitioner did not receive any statutory notice, and thus no cause of action arose against him.
Respondents' Arguments
- The cheque remains valid for six months, allowing presentation at any time within that period, including multiple presentations.
- The second presentation and dishonour of the cheque provide a valid cause of action for prosecution.
- Notice was sent to the first petitioner by registered post, and service is deemed valid under Section 27 of the General Clauses Act unless proven otherwise.
- The second petitioner did not borrow money nor issue any cheque and only accompanied the first petitioner; hence, prosecution against her lacks bona fides.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court analyzed the provisions of the Negotiable Instruments Act, emphasizing that a cheque is valid for six months from its date and may be presented multiple times within this period. The payee or holder in due course is entitled to present the cheque for payment at any time within six months and, upon dishonour, must issue a written notice within 15 days to the drawer. The payee must then allow 15 days for payment before filing a complaint within one month of the cause of action arising.
Accordingly, the court rejected the petitioners' contention that prosecution based on the second presentation of the cheque is invalid, holding that the second dishonour constitutes a valid cause of action. Regarding the issue of service of notice, the court referred to Section 27 of the General Clauses Act, which deems service by registered post effective unless proven otherwise. The court noted that the first respondent produced postal receipts, placing the burden on the petitioners to prove non-receipt. Thus, the prosecution could not be quashed on the ground of non-receipt of notice.
However, the court found that the second petitioner had no direct involvement in borrowing money or issuing the cheque and only accompanied the first petitioner. Consequently, the prosecution against the second petitioner was deemed without bona fides and was quashed. The proceedings against the first petitioner were allowed to continue.
Holding and Implications
The court quashed the proceedings against the second petitioner but allowed the prosecution against the first petitioner to continue.
The direct effect of this decision is the dismissal of charges against the second petitioner due to lack of involvement, while the first petitioner remains subject to prosecution under Section 138 of the Negotiable Instruments Act. No new precedent was established by this ruling.
1. The petitioners are accused in S.T 1205/89 on the file of Additional Judicial First Class Magistrate's Court, Kollam. Annexure-1 complaint was filed by respondents 1 and 2 alleging that the petitioners accused committed offences punishable under Section 138 of the Negotiable Instruments Act and 420 of the Indian Penal Code. The gist of the allegation against the petitioners is that on 31-7-89 both these petitioners along with the mother of 2nd petitioner approached 1st respondent and asked for a loan of Rs. 60,000/-. In the complaint it is alleged that 1st respondent was made to believe that there was sufficient fund in the bank account maintained by the accused and on the basis of this representation the 1st respondent gave Rs. 60,000/- to the 1st accused. The 1st respondent presented the cheque for payment on 1-9-89 and the cheque was dishonoured. The 1st respondent met the petitioner. However, the amount was not paid. Thereafter on 12-10-89 the cheque was again presented for payment. Then also it was dishonoured. Notices were sent to the petitioners accused. The 2nd accused refused to accept the notice and the acknowledgement in respect of the notice issued to the 1st petitioner was not received by the 1st respondent. No amount was paid by the petitioners and, therefore, the complaint was filed.
2. The petitioners seek to quash the complaint mainly for two reasons. The learned counsel for the petitioners submits that the cheque was presented on 1-9-89 and it was dishonoured and there arose a cause of action for the 1st respondent to file a complaint under Section 138 of the Negotiable Instruments Act. However, no such complaint was filed on the basis of dishonour of cheque on 1-9-89. The petitioners were also not served which a notice when the cheque was dishonoured on 1-9-89. The learned counsel for the petitioners contends that a second presentation of the cheque is not contemplated and there cannot be any prosecution for the offence under Section 138 of the Negotiable Instruments Act on the basis of the second, presentation of the cheque.
3. I am unable to accept this contention. Under the provisions of the Negotiable Instruments Act a cheque drawn by the drawer will be valid for a period of 6 months. The payee or holder in due course is entitled to present a cheque for payment at any time within the period of 6 months. For successful prosecution of an offence under Section 138 of the Act a payee or holder in due course must have presented the cheque before the bank for payment. If there is a dishonour of the cheque on presentation for payment he must issue a notice in writing within a period of 15 days to the drawer under Section 138(b) of the Act and he must be given IS days time to pay the amount covered by the cheque and if the drawer fails to make the payment of the said amount to the payee within is days of the receipt of such notice under Section 142(b) of the Act, the payee or holder in due course is entitled to file a complaint within one month of the date of cause of action that, arose under Clause (c) of the proviso to Section 138. From these provisions, it is clear that came of action for filing the complaint may arise on several occasions and the payee or holder in due course is entitled to present the cheque at any time within a period of 6 months from the date at which it was drawn and for filing the complaint he should have served notice of such dishonour to the drawer. The payee or holder in due course can make a second presentation of the cheque and if other conditions are fulfilled he can launch a complaint on the basis of the second dishonour of the cheque as the cheque would remain valid for a period of six months.
4. Another contention raised by the petitioners counsel is that the 1st petitioner did not receive any notice and so long as he has not received any notice under Section 138(b) of the Act there cannot be any prosecution for the offence under Section 138. It is contended that the cause of action for the offence under Section 138 would arise only after a period of 15 days of the receipt of the said notice. The 1st respondent would contend that the notice was issued to the 1st petitioner, however, the acknowledgment was not received. Under Section 27 of the General Clauses Act the service shall be deemed to be effected if a properly addressed pre-paid letter containing the document is sent by a registered post unless the contrary is proved. Section 27 of the General Clauses Act reads as follows:
“Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression “serve” or either of the expression “give” or “send” or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post”.
5. Under Section 94 of the Negotiable Instruments Act, the mode in which the notice of dishonour may be given is mentioned. If the notice is duly directed and sent by post by miscarriage, such miscarriage does not render the notice invalid. So, merely because of the fact that the notice sent by the 1st respondent was not received by the petitioner, it cannot be said that there was no proper service of notice. It is submitted that the 1st respondent produced the receipt issued by the postal authorities in court. It is for the petitioner to prove that he had not received any notice. The prosecution now launched is not liable to be quashed for this reason.
6. The prosecution as against the 2nd petitioner stands on a different footing. Even on the allegations in the complaint, she has not borrowed any amount from the 1st respondent. She had not issued any cheque in favour of the 1st respondent. The allegations in Annexure-1 complaint would show that the 2nd petitioner only accompanied the 1st petitioner when the latter went to borrow the amount the 1st respondent. The prosecution filed against the 2nd respondent is without any bona fides and the entire allegations in the complaint if taken in its entirety, no offences under Section 138 of the Negotiable Instruments Act and 420 IPC would be attracted. Therefore, I quash the entire proceedings initiated by the 1st respondent as against the 2nd petitioner. The proceedings in Annexure-1 complaint will continue in accordance with law as against the 1st petitioner.
7. Crl. M.C is disposed of as above.
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