IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Criminal Misc. Application No. 177 of 2004 Naresh Kumar … Petitioner Vs State of Uttaranchal & others … Respondents Sri Lalit Miglani, Advocate, holding brief of Sri Pankaj Miglani, learned counsel for the petitioner. Sri S.S. Adhikari, learned A.G.A. for the State/respondent Nos. 1 and 2 Hon’ble B.C. Kandpal, J. (Oral) This petition under Section 482 Cr.P.C. has been filed by the petitioner – Naresh Kumar who is facing the trial in Criminal Case No. 419 of 2003, under Section 138 Negotiable Instrument Act, pending in the court of Special Judicial Magistrate I, Haridwar. 2. Brief facts of the case are that a complaint was filed by one – Ramji Das Agarwal/respondent No. 3 against the petitioner stating therein that the petitioner on the false pretext that a sum of Rs. 5,000/- was due towards the petitioner and in lieu of that he issued the advanced cheque for Rs. 5,000/- belonging to Oriental Bank of Commerce Ltd. in favour of the respondent No. 3 but when the cheque was produced before the Bank, it was returned unpaid due to insufficient fund. Thereafter, the respondent No. 3 sent a registered notice to the petitioner on 04.07.2001 through advocate and after receiving the notice, the petitioner apologized and assured that after 4-5 days again when the cheque will be presented, it will be honoured. The respondent No. 3 – Ramji Das Agarwal/complainant again produced the cheque on 26.07.2001, but it was dishonoured again. The Bank intimated with regard to this on 28.07.2001, thereafter the complainant met with petitioner – Naresh Kumar at his house but he refused to pay the money back. The 2 complainant thereafter sent the registered notice again on 31.07.2001 and this notice was not accepted by the petitioner, hence, the complaint was filed by the complainant/respondent No. 3 on 24.08.2001. After filing the complaint the statement of complainant was recorded under Section 200 of Cr.P.C. and thereafter, statements of witnesses were also recorded under Section 202 of Cr.P.C. The court below thereafter on 12.02.2002 passed the order that prima facie case against the petitioner under Section 138 of Negotiable Instrument Act is made out and directed the petitioner to appear before the Court for facing the trial. 3. The petitioner, on the ground that no offence against him is made out and the proceedings initiated against him is absolutely an abuse of process of court and filed this petition for quashing the proceedings of the criminal case. 4. None has appeared on behalf of the respondent No. 3 in spite of sufficient service of notice. Therefore, heard Sri Lalit Miglani, Advocate, holding brief of Sri Pankaj Miglani, learned counsel for the petitioner, Sri S.S. Adhikari, learned A.G.A. for the State/respondent Nos. 1 and 2 and perused the record. 5. The short controversy which arises in this case is as to whether the cause of action to file the complaint for non- payment of money despite of the notice would arise only once or it would arise even after issuance of the notice on subsequently after the first notice has already been issued. 6. The complaint filed by the respondent No. 3 is contained as annexure No. 1 to the petition, which shows that the cheque was issued to the complainant by the petitioner on 3 28.06.2001 and it was dishonoured by the Bank on 04.07.2001. The complainant, further presented the cheque with the bank on 26.07.2001 but again bounced which the intimation was received by the complainant on 28.07.2001. Thereafter, the complainant issued the notice to the petitioner on 31.07.2001 but the notice was not received by the petitioner. However, the first notice was issued to the petitioner as per allegation made in the complaint on 04.07.2001 which was received by the petitioner and he made the request that in case, the cheque is further presented with the Bank after few days it will be honoured. The allegation made in the complainat reveals that when the cheque was further presented before the Bank, it was again dishonoured as well as the complainant thereafter issued subsequent notice to the petitioner on 31.07.2001 and subsequently filed the complaint before the court concerned on 24.08.2001. 7. It is thus clear that the complainant/respondent No. 3 had already issued notice to the petitioner on 04.07.2001 which was received by the petitioner. Therefore the cause of action between the complainant on the issue of the first notice on 04.07.2001, the complainant could not have got the benefit of Negotiable Instruments Act in filing the complaint on the basis of the subsequent notice allegedly issued by him on 31.07.2001. The right to the complainant was available to present the cheque any number of times during the period of its validity, but on each presentation of the cheque and its dishonour, a fresh right and not a cause of action accrues in favour of the complainant. The complainant, may, therefore, without taking pre-emptory action in exercise of his right under clause (b) of Section 138 of Negotiable Instruments Act, go on presenting the cheque so as to enable him to exercise such right at any point of time during the 4 validity of the cheque. But once the complainant gives a notice under clause (b) of Section 138, he forfeits such right as 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. The period of one month for filing the compliant will be reckoned from the day immediately following the day on which the period of fifteen days from the date of receipt of the notice by the drawer expires and subsequent upon the failure of the drawer to pay the money within the period of fifteen days as envisaged under clause (c) of the proviso of Section 138, the liability of the drawer for being prosecuted for the offence he has committed arises, and the period of one month for filing the complaint under Section 142 is to be reckoned accordingly. Therefore, on reading of the two sections i.e. 138 and 142 of Negotiable Instruments act in a combined manner, there is no room for doubt that the cause of action within the meaning of Section 142 arises and can arise only once. Therefore, the complainant could not get any benefit under the provisions of Section 142 of Negotiable Instruments Act by issuing subsequent notice dated 31.07.2001 as the cause of action in the instant case arose immediately after the first notice was issued by the complainant on 04.07.2001. 8. The Hon’ble Apex Court in a cae Sadanandan Bhadran Vs Madhavan Sunil Kumar reported in AIR 1998 SC 3043 has held as under:- “6. The next question that falls for our determination is whether dishonour of the cheque on each occasion of its presentation gives rise to a fresh cause of action within the meaning of Section 142(b) of the Act. Section 142 reads as under: 5 "Notwithstanding anything contained in the Code of Criminal Procedure, 1973:- (a) no court shall take congnizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque; (b) such complaint is made within one month of the date on which the cause of action arises under clause @ of the proviso to Section 138; (c) no court inferior to that of a metropolitan magistrate or a Judicial magistrate of the first class shall try any offence punishable under Section 138." From a plain reading of the above Section it is manifest that a competent Court can take cognizance of a written complaint of an offence under section 138 if it is made within one month of the date on which the cause of action arises under clause @ of the proviso to Section 138. 7. In a generic and wide sense (as in Section 20 of the Civil Procedure Code, 1908) 'cause of action' means every fact which it is necessary to establish to support a right or obtain a judgment. Viewed in that context, the following facts are required to be proved to successfully prosecute the drawer for an offence under Section 138 of the Act: 6 (a) that the cheque was drawn for payment of an amount of money for discharge of a debt/liability and the cheque was dishonoured; (b) that the cheque was presented within the prescribed period; (c) that the payee made a demand for payment of the money by giving a notice in writing to the drawer within the stipulated period; and (d) that the drawer failed to make the payment within 15 days of the receipt of the notice. If we were to proceed on the basis of the generic meaning of the term 'cause of action' certainly each of the above facts would constitute a part of the cause of action but then it is significant to note that clause (b) of Section 142 gives it a restrictive meaning, in that, it refers to only one fact which will give rise to the cause of action and that is the failure to make the payment within 15 days from the date of the receipt of the notice. The reason behind giving such a restrictive meaning is not far to seek. Consequent upon the failure of the drawer to pay the money within the period of 15 days as envisaged under clause @ of the proviso to Section 138, the liability of the drawer for being prosecuted for the offence he has committed arises, and the period of one month for filing the complaint under section 142 is to be reckoned accordingly. The combined reading of the above two sections of the Act leaves no room for doubt that cause of action within the meaning of Section 142(c) arises - and can arise - only once. 7 8. Besides the language of Sections 138 and 142 which clearly postulates only one cause of action there are other formidable impediments which negates the concept of successive causes of action. One of them is that for dishonour of one cheque there cane be only one offence and such offence is committed by the drawer immediately in his failure to make the payment within fifteen days of the receipt of the notice served in accordance with clause (b) of the proviso to Section 138. That necessarily means that for similar failure after service of fresh notice on subsequent dishonour the drawer cannot be liable for any offence nor can the first offence be treated as non est so as to give the payee a right to file a complaint treating the second offence as the first one. At that stage it will not be a question of waiver of the right of the payee to prosecute the drawer but of absolution of the drawer of an offence, which stands already committed by him and which cannot be committed by him again. 9. The other impediment to the acceptance of the concept of successive causes of action is that it will make the period of limitation under clause @ of Section 142 otiose, for, a payee who failed to file his complaint within one month and thereby forfeited his right to prosecute the drawer, can circumvent the above limitative clause by filing a complaint on the basis of a fresh presentation of the cheque and its dishonour. Since in the interpretation of statutes the Court always presumes that the legislature inserted every part thereof for a purpose and the legislative intention is that the very part should have effect the above conclusion cannot 8 be drawn for, that will make the provision for limiting the period of making the complaint nugatory. 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 an 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 this 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 and the cause of action for filing the complaint will arise. Needless to say, the period of one month fro 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.” 9. The Hon’ble Apex Court in a subsequent case Prem Chand Vijay Kumar Vs Yashpal Singh & another, reported in 2005 SCC (Cri) 1153, has held as under:- “Clause (a) of the proviso to Section 138 does not put any embargo upon the payee to successively present a 9 dishonoured cheque during the period of its validity. This apart, in the course of business transactions it is not uncommon for a cheque being returned due to insufficient funds or similar such reasons and being presented again by the payee after sometime, on his own volition or at the request of the drawer, in expectation that it would be encashed. The primary interest of the payee is to get his money and not prosecution of the drawer, recourse to which, normally, is taken out of compulsion and not choice. On each presentation of the cheque and its dishonour, a fresh right-and not a 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 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. In a generic and wide sense (as in Section 20 of the Civil Procedure Code, 1908 (in short 'CPC') "cause of action" means every fact which it is necessary to establish to support a right or obtain a judgment. Viewed in that context, the following facts are required to be proved to successfully prosecute the drawer for an offence under Section 138 of the Act: (a) that the cheque was drawn for payment of an amount of money for discharge of a debt/liability and the cheque was dishonoured; (b) that the cheque was presented within the prescribed period; (c) that the payee made a demand for payment of the money by giving a notice in writing to the 10 drawer within the stipulated period; and (d) that the drawer failed to make the payment within 15 days of the receipt of the notice. Proceeding on the basis of the generic meaning of the term "cause of action", certainly each of the above facts would constitute a part of the cause of action but clause (b) of Section 142 gives it a restrictive meaning, in that, it refers to only one fact which will give rise to the cause of action and that is the failure to make the payment within 15 days from the date of the receipt of the notice. A combined reading of Sections 138 and 142 makes it clear that cause of action is to be reckoned accordingly. The combined reading of the above two sections of the Act leaves no room for doubt that cause of action within the meaning of Section 142(c) arises - and can arise - only once. 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. It 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 cheque 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 cheque has once snowballed into a cause of action it is not permissible for a payee to create another cause of action with the same cheque. The period of one month for filing the complaint will be reckoned from the day immediately 11 following the day on which the period of fifteen days from the date of the receipt of the notice by the drawer expires.” 10. On the basis of the aforesaid decisions of the Hon’ble Apex Court as well as in the light of the facts and circumstances of the present case, it is quite clear that the learned Magistrate was not justified to take the cognizance of the offence, in case, if the complaint was not filed within one month of the date on which the cause of action arose and the cause of action in the instant case arose on 04.07.2001 when the first notice was issued by the complainant/respondent No. 3 – Ramji Das Agarwal. 11. For the reasons stated above, I am of the view that this petition is liable to be allowed. The proceedings of Criminal Case No. 419 of 2003, Ramji Das Agarwal Vs Naresh Kumar for the offences under Section 138 of Negotiable Instruments Act, pending in the court of Special Judicial Magistrate I, Haridwar are also liable to be quashed. In case, the proceedings of the criminal case are permitted to continue against the petitioner the same would amount of abuse ofprocess of court as no cause of action could have accrued against the petitioner on the basis of subsequent notice issued by the complainant/respondent No. 3 in view of the stipulated principle that if dishonour of a cheque has once snowballed into a cause of action if is not permissible for a payee to create another cause of action with the same cheque. 12. Accordingly, the petition is allowed. The proceedings of Criminal Case No. 419 of 2003, Ramji Das Avarwal Vs Naresh Kumar arises out of Complaint Case No. 647 of 2001 for the offence under Section 138 of Negotiable 12 Instrument Act pending in the court of Special Judicial Magistrate I, Haridwar are hereby quashed. (B.C. Kandpal, J.) 18.08.2009 ASWAL