IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.46          OF 2010 (@ SPECIAL LEAVE PETITION (CRL) NO.6676 OF 2008)  

Tameeshwar Vaishnav .. Appellant  Vs.

Ramvishal Gupta .. Respondent

WITH CRIMINAL APPEAL NO. 47        OF 2010

(@ S.L.P. (CRL.) NO.6593 OF 2008)

J U D G M E N T

ALTAMAS KABIR, J.

1. Delay of 31 days and 39 days in re-filing the  Special Leave Petitions is condoned.

2. Leave granted.

3. The short point for decision in these Appeals  is whether after the notice issued under clause (b)  of Section 138 of the Negotiable Instruments Act,  1881  (hereinafter  referred  to  as  “the  Act”),  is  received by the drawer of the cheque, the payee or  holder of the cheque, who does not take any action  on  the  basis  of  such  notice  within  the  period  prescribed  under  Section  138  of  the  Act,  is  entitled to send a fresh notice in respect of the  same  cheque  and,  thereafter,  proceed  to  file  a  complaint under Section 138 of the Act.

4. In S.L.P.(Crl.) No.6676 of 2008 arising out of  Criminal  Case  No.399  of  2006  pending  before  the  Additional  Chief  Judicial  Magistrate,  Khairagarh,  the Respondent had filed a complaint under Section  138 of the Act, for dishonour of a cheque dated 16th  

March,  2006,  bearing  No.0864961  for  Rs.40,000/-  drawn  on  the  Bank  of  Maharashtra,  Khairagarh  Branch, in favour of the Respondent.  S.L.P. (Crl.)  

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No.6593 of 2008 is directed against the judgment of  the  High  Court  dated  27th March,  2008,  in  Crl.  Revision  No.130  of  2006  arising  out  of  Criminal  Case  No.339  of  2006  pending  with  the  Additional  Chief Judicial Magistrate, Khairagarh, in respect  of a similar cheque dated 20th March, 2006, bearing  No.0864962 amounting to Rs.40,000/- drawn on the  Bank of Maharashtra, Khairagarh Branch, in favour  of the Respondent.  As stated hereinabove, both the  said  cheques  were  dishonoured  on  the  ground  of  insufficient  funds.   The  cheque  issued  on  20th  

March, 2006, bearing No.0864962 was dishonoured on  22nd March,  2006,  on  the  ground  of  insufficient  funds.  Similarly, cheque bearing No.0864961 dated  16th March,  2006,  was  dishonoured  on  16th March,  2006. Consequently, the Respondent issued notices  as contemplated under Clause (b) of the proviso to  Section 138 of the Act asking the Appellant to make  payment  of  the  cheque  amounts  within  15  days.  Although,  the  notice  was  duly  served  upon  the  

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Appellant, the Respondent did not take any steps to  file the complaint within the period prescribed in  Section 142 of the Act.  On the other hand, the  Respondent sent a second notice to the Appellant in  respect of the two cheques on 7th June, 2006, and,  ultimately, when no response was received to the  same, he filed two separate complaints before the  learned  Additional  Chief  Judicial  Magistrate,  Khairagarh, District Rajanandgaon, Chhattisgarh, on  which process was issued by the learned Magistrate  after recording the statement of the respondent- complainant.   

5. Against such order issuing process on both the  complaints, the Appellant filed Criminal Revision  Nos.130  and  131  of  2006  in  the  Court  of  the  Additional  Sessions  Judge,  Khairagarh,  District  Rajanandgaon, on 21st November, 2006. On 19th March,  2007,  the  learned  Additional  District  Judge,  Khairagarh,  dismissed  both  the  Revision  

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Applications  holding  that  the  grounds  raised  therein could be decided after evidence was led by  the parties.

6. On  15th May,  2007,  the  Appellant  filed  Crl.  Misc.  Petition  Nos.177  of  2007  and  178  of  2007  before the Chhattisgarh High Court under Section  482 Cr.P.C. for quashing the order passed by the  Additional  Sessions  Judge,  Khairagarh,  on  19th  

March, 2007. The High Court ultimately dismissed  both the Petitions by the orders impugned in these  Appeals.

7. On behalf of the Appellant, it was contended  that  the  learned  Magistrate  had  erred  in  taking  cognizance  on  the  complaints  filed  by  the  Respondent, since the complaints stood barred under  the provisions of the proviso to Section 138 of the  Act.  It  was  urged  that  when  the  complainant- respondent did not take any action on the basis of  the  first  notice  issued  on  30th March,  2006,  a  

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second notice in regard to the self-same cheque was  barred under the proviso to Section 138 of the Act.  In  support  of  his  said  submission,  the  learned  counsel  firstly  referred  to  and  relied  on  the  decision of this Court in  Sadanandan Bhadran vs.  Madhavan Sunil Kumar [(1998) 6 SCC 514], wherein  this Court held that the cause of action to file  complaint on non-payment despite issue of notice,  arises but once. Another cause of action would not  arise  on  repeated  dishonour  on  re-presentation.  Learned counsel pointed out that this Court also  held that while the payee was free to present the  cheque repeatedly within its validity period, once  notice had been issued and payments not received  within 15 days of the receipt of the notice, the  payee has to avail the very cause of action arising  thereupon and file the complaint. Dishonour of the  cheque on each re-presentation does not give rise  to a fresh cause of action.  Taking note of the  amendment to Section 142(b) of the Act, this Court  

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also held that the complaint would have to be filed  within one month from the day immediately following  the day on which the period of 15 days from the  date of receipt of the first notice by the drawer  expires.  

8. Learned  counsel  then  referred  to  another  decision of this Court in  Prem Chand Vijay Kumar  vs.  Yashpal  Singh  &  Anr. [(2005)  4  SCC  417],  wherein the view expressed in Sadanandan Bhadran’s  case  (supra)  was  reiterated.   Learned  counsel  submitted that in view of the aforesaid decisions  of this Court which authoritatively explained that  cause of action arises only once on the issuance of  notice  upon  dishonour  of  the  cheque  and  receipt  thereof by the accused, the learned Magistrate had  erred in law in taking cognizance on the basis of  the second notice whereas the cause of action had  arisen  under  the  first  notice  dated  30th March,  2006, which clearly indicates that the complaint  

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filed  on  10th July,  2006,  was  well  outside  the  period of limitation prescribed in the proviso to  Section 138 of the Act.  Learned counsel submitted  that the subsequent order passed by the High Court  affirming  the  order  of  the  Magistrate  issuing  process suffers from the same vice and both the  orders were, therefore, liable to be set aside.

10. The submissions made on behalf of the Appellant  were vehemently opposed on behalf of the Respondent  on the ground that having regard to the assurance  given by the Appellant to the Respondent and the  request made to present the cheque for the second  time, even after issuance of the first notice, it  must be held that the delay, if any, in filing the  complaint  had  been  condoned  by  the  learned  Magistrate in keeping with the proviso to Section  142(b) of the Act.

11. Learned  counsel  submitted  that  the  decisions  cited  on  behalf  of  the  Appellant  had  been  

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subsequently  considered  by  this  Court  in  S.L.  Constructions vs.  Alapati Srinivasa Rao [(2009) 1  SCC 500], in which the decisions of this Court in  Sadanandan Bhadran’s case (supra) and  Prem Chand  Vijay  Kumar’s  case  (supra),  had  been  noted  and  considered.  

12. Learned counsel submitted that in view of the  promise held out by the Appellant and his request  to  present  the  cheque  for  the  second  time,  the  Respondent had refrained from taking any action on  the basis of the first notice which was the cause  of  the  delay  in  making  the  complaint.   Upon  issuance of process, it must be held that the Court  was satisfied that there was sufficient cause for  making the complaint after the prescribed period.  

13. Learned counsel urged that having regard to the  above,  no  interference  was  called  for  with  the  order of the learned Magistrate taking cognizance  

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or the order of the High Court affirming the said  order.  

14. We  have  given  our  anxious  thought  to  the  submissions  made  on  behalf  of  the  respective  parties, having regard to the apparently different  views  expressed  in  Sadanandan  Bhadran’s  case  (supra), Prem Chand Vijay Kumar’s case (supra) and  the  latest  decision  in  S.L.  Construction’s  case  (supra).   

15. On careful scrutiny of the decision in  S.L.  Construction’s case (supra), it would appear that  the facts on the basis of which the said decision  was rendered, were different from a case of mere  presentation  and  dishonour  of  the  cheque  after  issuance of notice under the proviso to Section 138  of  the  Act.  While  the  decision  in  Sadanandan  Bhadran’s case (supra), clearly spells out that a  cheque may be presented several times within the  period of its validity, the cause of action for a  

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complaint under Section 138 of the Act arises but  once, with the issuance of notice after dishonour  of  the  cheque  and  the  receipt  thereof  by  the  drawer. The same view has been reiterated in Prem  Chand  Vijay  Kumar’s  case  (supra).  The  only  distinguishing  feature  of  the  decision  in  S.L.  Construction’s case (supra) is that of the three  notices  issued,  the  first  two  never  reached  the  addressee.  It is only after the third notice was  received that the cause of action arose for filing  the complaint. In effect, the cause of action for  filing the complaint in the said case did not arise  with the issuance of the first two notices since  the same were never received by the addressee.

16. The provisions of Section 138 and clauses (a),  (b) and (c) to the proviso thereof indicate that a  cheque has to be presented to the bank within a  period of six months from the date on which it is  drawn  or  within  the  period  of  its  validity,  

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whichever is earlier.  Clause (b) indicates that  the  payee  or  the  holder  in  due  course  of  the  cheque, has to make demand for the payment of the  said amount of money by giving a notice in writing  to the drawer of the cheque within 30 days of the  receipt  of  information  by  him  from  the  bank  regarding the return of the cheque as unpaid and  clause  (c)  provides  that  if  the  drawer  of  the  cheque fails to make the payment of the said amount  of  money  to  the  payee  or  to  the  holder  in  due  course of the cheque within 15 days of receipt of  the said notice, the payee or the holder of the  cheque may file a complaint under Section 142 of  the Act in the manner prescribed.

17. In the instant case, it is clear that the first  notices were received by the Appellant on 14th June,  2006,  whereas  the  complaints  were  filed  on  10th  

July, 2006.  It must, therefore, be held that the  complaints  were  filed  beyond  the  period  of  

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limitation  and  the  learned  Magistrate  erred  in  taking cognizance on the complaints filed on the  basis  of  the  second  notices  issued  on  7th June,  2006.   Similarly, the High Court was also wrong in  affirming the order of the learned Magistrate.

18. The Appeals must, therefore, succeed and are,  accordingly, allowed.   The orders of the learned  Magistrate dated 13th July, 2006 and 17th July, 2006,  respectively,  taking  cognizance  on  the  Criminal  Complaint Nos.339 and 399 of 2006 along with the  orders of the High Court impugned in these appeals,  are set aside.  

………………………………………………J. (ALTAMAS KABIR)

………………………………………………J. (G.S. SINGHVI)

New Delhi  Dated: 8.1.2010.  

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