Krishna Exports And Others v. Raju Das .

Order

1. The respondent filed a complaint in the Court of the Metropolitan Magistrate on 31-7-1995 under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 consequent upon the dishonour of the cheque bearing No. 734133 dated 13-2-1995 for Rs 14,96,056. The said cheque was issued by the appellant in connection with the transaction of purchase of tea from the respondent concern. After examination of the complainant, the learned Magistrate took cognizance of the offence and issued process for appearance of the accused persons i.e the appellants. An application filed for dropping further proceedings and for dismissal of the complaint on the ground that it was not maintainable, was rejected by the Metropolitan Magistrate by his order dated 19-12-1996. The High Court was moved in revision by the appellant. The revision application was dismissed by the impugned order dated 26-8-1998.

2. The learned counsel for the appellants submits that the complaint is not maintainable because the cause of action had arisen on the dishonour of the cheque in the first instance i.e on 14-2-1995, but no complaint was filed within one month thereafter. Though a notice was issued on 15-2-1995 demanding payment under the cheque, the complaint was not filed. The cheque was re-presented on 22-6-1995. Again, the bank returned the cheque as it had instructions to stop payment. The respondent then took the step of issuing another notice on 29-6-1995 for which the appellant replied on 7-7-1995 denying his liability. The respondent thereafter filed a complaint under Section 138 read with 141 of the Negotiable Instruments Act on 31-7-1995. Section 142 of the Negotiable Instruments Act enacts a bar against taking cognizance of an offence under Section 138 unless such a complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138. Clause (c) of the proviso to Section 138 contemplates a situation when the drawer of such cheque fails to make the payment of the money to the payee or as the case may be to the holder in due course of the cheque within 15 days of the receipt of the said notice. Though the cause of action for the purposes of Section 142(b) arises on the failure of the drawer of the cheque to make the payment in compliance with the demand made in the notice, it is the contention of the learned counsel for the appellant that the accrual of cause of action under Section 142(b) read with clause (c) of the proviso to Section 138 is relatable to the first notice and on the expiry of the period of 15 days, the complaint ought to have been filed within one month thereafter. However, the contention of the learned counsel for the respondent is that one-month period as contemplated by Section 142(b) should be reckoned with reference to the expiry of the period of 15 days after the second notice was issued on 29-6-1995. It is submitted that there is no bar to re-present the cheque so long as the cheque is valid and it was therefore open to the respondent to file a complaint after the issuance of the second notice. The issue is no longer res integra. A similar contention advanced on behalf of the respondent has been negatived by this Court construing the relevant provisions of Sections 138, 141 and 142 of the Act in Sadanandan Bhadran v. Madhavan Sunil Kumar (1998) 6 SCC 514. This Court observed that a combined reading of Section 138 and Section 142 leaves no room for doubt that cause of action within the meaning of Section 142(b) arises and can arise only once. At para 9 it was clarified as under:

“9. 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 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 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.”

3. This judgment which has been followed in the subsequent decisions supports the appellant's contention. Faced with this difficulty, the learned counsel for the respondent submits that the first notice dated 15-2-1995 is really not a notice contemplated by clause (c) of the proviso to Section 138 and it cannot be construed to have given rise to a cause of action to file the complaint. According to the learned counsel for the respondent, the earlier notice was only in the nature of a communication which does not spell out in clear terms a demand to make the payment. We find it difficult to accept the contention. On a reading of the letter dated 15-2-1995, it is plainly clear that the respondent required immediate payment of the amount of cheque to be arranged failing which he threatened to take legal action in the matter. The said letter certainly qualifies itself as a notice within the contemplation of clause (c) of the proviso to Section 138. We are, therefore, of the view that the learned Magistrate should not have taken cognizance of the complaint after the expiry of the time-limit prescribed by clause (b) of Section 142 of the Act. The proceedings taking cognizance and issuance of the process are, therefore, liable to be quashed.

4. During the course of hearing of the case, it is brought to our notice that Civil Suit No. 347 of 1998, for recovery of the amounts due from the appellant including the cheque amount, has been filed by the respondent in the High Court of Calcutta (Original Side). In the facts and circumstances of the case especially for the reason that the complaint is being thrown out on a technical ground, we put it to the learned counsel for the appellant that it is just and proper that the appellant shall furnish a bank guarantee to the extent of Rs 11,34,056 (which is arrived at after deducting the advance amount). The learned counsel for the appellant, after taking time to obtain instructions, has consented to the same. We, therefore, direct that a bank guarantee for Rs 11,34,056 shall be furnished within a period of six weeks to the satisfaction of the Registrar (Original Civil Side) of the High Court of Calcutta. The said bank guarantee shall remain as security to the extent of the amount specified above to satisfy the decree if any passed by the Court in the pending suit. This direction shall not be construed as any expression of view on the merits of the suit and also on the question whether the advance is liable to be adjusted or not.

5. The appeal is allowed subject to the above direction.