Crl. Misc. No. M-11018 of 2009 (O&M) [ 1 ] IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH Crl. Misc. No. M-11018 of 2009 (O&M) Date of Decision: February 7,2011 M/s Manku Stores............................................................. Petitioner Versus M/s Ess Ess Kay Engineering Co. Ltd. ......................... Respondent Coram: Hon'ble Ms. Justice Ritu Bahri 1. To be referred to the Reporters or not? 2. Whether the judgment should be reported in the Digest? Present: Mr. A.P.S. Guliani, Advocate for the petitioner. Mr. A.S.Khinda, Advocate for the respondent. ... RITU BAHRI, J. This petition under Section 482 of the Code of Criminal Procedure is for quashing of criminal complaint under Section 138 of the Negotiable Instruments Act (Annexure P-6), Summoning order dated 7.3.2009 passed by the Special Judicial Magistrate, Kapurthala (Annexure P-8) and all subsequent proceedings arisen thereof. Petitioner is a partnership concern dealing in sale and purchase of electrical goods and accessories. The respondent-company is a manufacturing company and the petitioner used to purchase the electrical Crl. Misc. No. M-11018 of 2009 (O&M) [ 2 ] items from the respondent-company. The purchases were made on credit basis. Due to supply of defective material i.e. defective electrical regulators by the respondent-company which were further supplied to M/s Cotton City Developers Pvt. Ltd. Coimbatore through their electrical contractors M/s Crown Electrical, huge amount of the petitioner was withheld by the respondent-company to whom the regulators were supplied. The petitioner repeatedly requested the respondent company to replace the defective regulators but nothing was done. The petitioner asked the respondent- company not to present the cheques in the bank for encashment till the defective material was replaced. `25,000/- was paid by the petitioner by Demand Draft on 22.10.2008 and `10,000/- was paid in cash to the Manager of the respondent company on same day. The respondent company presented three cheques of the petitioner which were dishonored. One legal notice was issued for dishonoring of two cheques bearing No. 317569 for `46,441/- and No. 317570 for `72,703/- both dated 4.8.2008. Second notice was for cheque No.318235 dated 18.9.2008 for `49,843/-. All the three cheques were to be drawn on Vijay Bank Coimbatore. Replies to the notices were sent on 11.12.2008. The respondent-company presented all the three cheques again to their bank for encashment in December, 2008. These cheques were dishonored and thereafter a fresh notice was issued on 30.1.2009 through the counsel. After this, a criminal complaint under Section 138 of the Negotiable Instruments Act was initiated by the respondent company and thereafter summoning orders dated 7.3.2009 (Annexure P-8) were issued. The petitioner has challenged the aforesaid orders on the ground that the respondent-company had issued two notices dated Crl. Misc. No. M-11018 of 2009 (O&M) [ 3 ] 26.11.2008 (Annexures P-1 and P-2). The petitioner-company had filed its reply to the said notices on 11.12.2008 (Annexure P-3). The respondent- company, however, did not file any complaint on the basis of the said cause of action. Thereafter, the complainant again presented three cheques which were stated to have been dishonored on 9.1.2009. The petitioner then issued notice on 30.1.2009 which was replied on 11.2.2009 (Annexure P-5). Mr. A.P.S.Guliani, learned counsel for the petitioner, has argued that the cause of action to file a complaint under Section 138 of the Negotiable Instruments Act accrued to the complainant on the expiry of time on the basis of first notice. After expiry of time for filing the complaint on the basis of first notice, no cause of action accrues to the complainant to file a complaint on subsequent dishonoring of the cheques on 9.1.2009. Learned counsel has placed reliance on the judgments in M/s Prem Chand Vijay Kumar v. Yash Pal Singh and another 2005(2) RCR (Criminal) 872 (SC) and M/s Delhi Cloth Store v. M/s Ahuja Traders 2005 (2) RCR (Criminal) 142(P&H). Mr. A.S.Khinda, learned counsel for the respondent, has not been able to distinguish the judgments cited by the counsel for the petitioner. Heard learned counsel for the parties. The Supreme Court in Prem Chand Vijay Kumar's case (supra) has examined the controversy under Sections 138 and 142 of the Negotiable Instruments Act, which read as follows:- “Section 138: Dishonour of cheque for insufficiency, etc. of funds in the account – Where any cheque drawn by a person on an account Crl. Misc. No. M-11018 of 2009 (O&M) [ 4 ] maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence, and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained this section shall apply unless- (a) the cheque has been 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, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money 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; and (c ) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, Crl. Misc. No. M-11018 of 2009 (O&M) [ 5 ] to the holder in due course of the cheque within fifteen days of the receipt of the said notice. Explanation – For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability. Section 142: Cognizance of offences – Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) no court shall take cognizance 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 (c) of the proviso to Section 138; (Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.) (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.” It has been observed by the Supreme Court that once a notice under clause (b) of Section 138 of the Negotiable Instruments Act has been given, the complainant forfeits his right to again present the cheque as cause of action has accrued when there was failure to pay the amount within the prescribed period. The Supreme Court has also observed that Clause (a) of Crl. Misc. No. M-11018 of 2009 (O&M) [ 6 ] the proviso to Section 138 does not put any embargo upon the payee to successively present a dishonored 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. Further, the Supreme Court has held that the period of one month for filing the complaint will be reckoned from the date immediately before the date on which the period of 15 days from the date of receipt of the notice by the drawer expires. In the present case, the first notice was issued on 26.11.2008 and the limitation to file a complaint will begin after 15 days of the notice. As per Section 142 sub-clause (b) of the Negotiable Instruments Act a complaint can be entertained within a period of one month from the date when 15 days of the notice has expired. Hence, the limitation to file complaint as per Sections 138 and 142 of the Negotiable Instruments Act on the notices issued on 26.11.2008 had expired in January 2009. The respondent-company initiated the complaint after the cheque was dishonored the second time on 9.1.2009 and second set of notices were Crl. Misc. No. M-11018 of 2009 (O&M) [ 7 ] issued on 30.1.2009. Complaint initiated on the basis of second notice dated 30.1.2009 is not maintainable in view of the judgment of the Supreme Court in M/s Prem Chand Vijay Kumar's case (supra). The criminal miscellaneous is allowed and the complaint (Annexure P-6) as well as the summoning orders dated 7.3.2009 (Annexure P-8) are quashed with all consequential proceedings. 7.2.2011 ( RITU BAHRI ) Rupi JUDGE