IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH : HYDERABAD WEDNESDAY, THE FOURTEENTH DAY OF OCTOBER, TWO THOUSAND NINE Present: HON’BLE SRI JUSTICE G.V.SEETHAPATHY Criminal Appeal No.535 of 2005 Between: Sabikar Ramchander Ji … Appellant And: State of A.P., rep. by its Public Prosecutor High Court of A.P., Hyderabad & another … Respondents HON’BLE SRI JUSTICE G.V.SEETHAPATHY Criminal Appeal No.535 of 2005 JUDGMENT: This criminal appeal is directed against the judgment dated 27.10.2004 in CC No.56 of 2003 on the file of the I Additional Judicial Magistrate of I Class, Warangal, wherein, the 2nd respondent herein was acquitted of the offence under Section 138 of the Negotiable Instrument Act 1881 (for short ‘the Act’). 2. Heard the learned counsel for the appellant and the learned counsel for the 2nd respondent. Perused the record. 3. The appellant herein filed a complaint against the respondent alleging in brief as follows: The accused is doing business under the name and style of ‘Sri Vigneshwara Enterprises’ at Warangal and he is the sole proprietor thereof. On account of close acquaintance with the complainant, accused borrowed a sum of Rs.1,00,000/- from the complainant and executed a demand promissory note on 21.06.2000 as collateral security. The accused failed to repay the said amount and on persistent demands, he issued a cheque dated 19.07.2002 for Rs.1,00,000/- drawn on Development Credit Bank Ltd., Warangal for initial discharge of the said liability. The complainant presented the said cheque for collection in Syndicate Bank, Warangal on 08.08.2002. The said cheque was returned through a return memo. Thereafter, the complainant got issued a legal notice to the accused on 14.08.2002 informing him that the cheque was returned due to insufficiency of funds and demanding the accused to pay the amount within 15 days. The said notice was returned un-served with endorsement ‘door locked’. The accused, knowing the fact of issuance of legal notice, approached the complainant and requested him to wait for few days. Believing his words, the complainant presented the said cheque again on 20.08.2002 and the same was returned on the same ground of insufficient funds. The complainant got issued legal notice on 04.10.2002. The accused received the said notice on 05.10.2002 but failed to pay the amount. Hence, the complaint. 4. The accused pleaded not guilty and claimed to be tried. In support of his case, the complainant examined himself as PW.1 and also examined the Assistant Manager, Syndicate Bank as PW.2 and marked Exs.P.1 to P.8. No oral or documentary evidence was adduced on behalf of the accused. 5. After hearing both sides, the learned Magistrate found the accused not guilty and acquitted him of the offence under Section 138 of the Act only on the ground that the complaint is based on the second legal notice dated 14.10.2002 after bouncing of the cheque for the second time is not maintainable. Aggrieved by the impugned order of acquittal, the present appeal is filed by the complainant. 6. Learned counsel for the appellant-complainant would contend that the first notice got issued on 14.08.2002 was not received by the accused, as the said notice was returned un-served with endorsement door locked, therefore, no cause of action arose pursuant to the first legal notice dated 14.08.2002. He would further contend that the cause of action for the complaint arose only on the failure of the accused to pay the amount demanded by the second legal notice dated 04.10.2002 which the accused received on 05.10.2002 and therefore, the trial Court erred in holding that the complaint is not maintainable in pursuance of the second legal notice. Learned counsel for the accused would on the other hand contend that the legal notice was issued on 14.08.2002 after cheque was dishonoured on 08.08.2002, the complainant ought to have filed the complaint in pursuance of the said legal notice. He would further contend that presenting of the cheque again for encashment, though, it is open to the complainant to present the cheque for encashment any number of times, no cause of action would arise in pursuance of any subsequent legal notice got issued pursuant to subsequent dishonour of the cheque. 7. In view of the rival contentions, the point that arise for consideration in the present case is whether the cause of action for the complaint would arise pursuant to issuance of second legal notice dated 04.10.2002 which was issued after dishonour of the cheque for second time and whether the complaint is maintainable based on such cause of action? 8. According to the complainant, the accused borrowed a sum of Rs.1,00,000/- from him for business purpose and executed promissory note on 21.06.2000 and failed to repay the amount and after persistent demands, accused issued a cheque Ex.P.1 dated 19.07.2002 which was dishonoured on the ground of insufficient funds when presented for collection through Syndicate Bank. Except denial of the offence, there is no specific denial on the part of the accused about the execution of the pronote or issuance of the cheque. What all suggested to PW.1 in the cross-examination is that Ex.P.1 is not a valid cheque and it is not supported by consideration and it is not issued towards any legally enforceable debt. There is no specific denial of the signatures of the accused on the cheque Ex.P.1. The accused did not examine himself nor did he adduce any evidence on his behalf. 9. It is not disputed that the cheque was presented for encashment for the first time on 08.08.2002 and the same was dishonoured on the ground of insufficient funds and the complainant got issued registered legal notice dated 14.08.2002 to the accused and the said notice was returned with postal endorsement as door locked. According to the complainant, the accused, having come to know of the same, approached him and requested him to wait for few days and the complainant obliged him and subsequently presented the cheque again for encashment on 20.09.2002 and it was again dishonoured on the same ground of insufficient funds. The accused denies that he ever approached the complainant and made any request to again present the cheque after some time. The fact, however, remains that cheque was presented for second time for encashment on 20.09.2002 and it was again dishonoured. It is also not disputed that subsequently, the complainant gave a second legal notice Ex.P.6 dated 04.10.2002 and it was duly served on the accused vide acknowledgment Ex.P.7 but the accused did not choose to give any reply nor repaid the amount. In Ex.P.6 notice, the complainant stated that after dishonour of the cheque on the first occasion, he informed the accused and the accused requested him to wait for few days expressing that he could not arrange funds due to unexpected necessities and accordingly, the complainant represented the cheque on the instructions of the accused on 20.09.2002. The said averment has not been disputed by the accused either by way of giving reply notice to Ex.P.6 or by way of any evidence before the Court. The plea of the complainant that he waited for some time and represented the cheque for encashment only on the instructions of the accused, therefore, remains un-repudiated when the cheque was represented it was again dishonoured on the ground of insufficient funds. 10. It is to be noted that the first notice issued by the complainant on 14.08.2002 was not served on the accused and it was returned with postal endorsement as ‘door locked’. The ingredients of the offence under Section 138 of the Act are not attracted, unless inter- alia payee of the holder in due course makes a demand for 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 return of the cheque as unpaid and the drawer of the said cheque fails to pay the amount to the payee or to holder in due course within 15 days after receipt of the said notice. The above conditions stipulated in the proviso to Section 138 of the Act makes it clear that issuance of the notice in writing by the payee to the drawer of the cheque demanding payments and the failure on the part of the payee to make payment within 15 days of the receipt of the said notice are essential pre-requisites for constituting the offence. Section 142 of the Act further clarifies that no Court shall take cognizance of any offence under Section 138 of the Act except upon a complaint, in writing, by payee or, as the case may be, the holder in due course of the cheque, made within one month of the date on which the cause of action arises under Clause [c] of the proviso to Section 138 of the Act. The cause of action arises under clause [c] of the proviso to Section 138 of the Act only when the drawer of the cheque fails to make the payment of the said amount of money, to the payee, within 15 days of the receipt of the said notice. Thus, when both the provisions contained in the proviso to Section 138 and 142 of the Act are read together, it is patently clear that the cause of action for filing the complaint arises only on the failure of the drawer to make payment within 15 days of the receipt of the notice issued by the payee and the complaint in writing has to be filed by the payee within one month of the date on which cause of action has arisen i.e., within one month from the expiry of 15 days period for making payment. The question of cause of action arising before the expiry of 15 days from the date of receipt of the notice is not contemplated. The period of 15 days has to be calculated only from the date of receipt of the notice. The question of commencement of the said period or its expiry does not arise when there is no receipt of the notice at all. In that view of the matter, the expression ‘receipt of the said notice’ used in clause [c] of proviso to Section 138 of the Act assumes significance. Whether such receipt of the notice shall be actual receipt or deemed receipt is a different matter altogether. There shall, however, be receipt of the notice. 11. It is well settled that the provisions of penal enactment entailing penal consequences call for a strict interpretation. When the expression used is ‘receipt of notice’, the same cannot be read as ‘giving of the notice’. The first notice issued on 14.08.2002 was admittedly not served on the accused. In other words, there was no receipt of the said notice by the accused. Learned counsel for the accused would contend that even according to the complainant accused approached him after return of the said notice and requested some time for arranging funds and therefore, there was knowledge on the part of the accused which would suffice. ‘Having knowledge’ is one thing and ‘receipt of the notice’ is quite another. The period of 15 days has to commence from the date of receipt of the notice, but not the date of having knowledge, if any. Even assuming that the accused had knowledge of the issuance of the notice by the complainant, the same cannot be equated with the receipt of the notice contemplated under clause [c] of proviso to Section 138 of the Act. ‘Receipt of the notice’ and ‘having knowledge of the notice’ cannot, therefore, be placed on the same pedestal, as such contingency is not contemplated by the statute. The fact that the accused approached the complainant and sought for time and the complainant obliged him and again presented the cheque is, therefore, of no consequence. It is not disputed that the cheque once dishonoured can be presented again for second time, or even third time, or, any number of times for encashment. When there was no receipt of the notice issued after dishonour on the first occasion, there was no cause of action arising pursuant to such notice. It is no doubt true that the cause of action will arise only once. In the present case, cause of action has arisen only in pursuance of the second notice Ex.P.6 got issued on 04.10.2002 and received by the accused on 05.10.2002 and on account of the failure of the accused to pay the amount in pursuance thereof. 12. In a recent decision in ‘S.L.Construction vs. Alapati Srinivasa Rao[1], the Apex Court held as follows: “In this case, as indicated hereinbefore, the first notice having not been served and the second notice having been withdrawn in terms of the reply issued by the learned advocate for the appellants themselves, the complainant cannot be said to have committed any illegality in presenting the cheque for the third time and issuing the third notice upon the defaulter”. 13. In the above case, cheque was presented three times and every dishonour was followed by issuance of a notice. The first notice was admittedly not served on the accused and the second notice was withdrawn as it was found to have been sent to an incorrect address and third notice was issued after dishonour of the cheque for third time and the said notice was served and based on cause of action which arises in pursuance of third notice, complaint was filed. In the above decision, the ratio laid down in ‘Sadanandan Bhadran vs. Madhavan Sunilkumar[2]’ case, which was relied upon by the trial Court was also referred to, wherein, it was held as follows: “Besides the language of Section 138 and 142 which clearly postulates only one cause of action, there are other formidable impediments which negate the concept of successive causes of action. One of them is that for dishonour of one cheque, there can be only one offence and such offence is committed by the drawer immediately on 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.” It was further held: “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 [c] of Section 142 otiose, for, 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 every part should have effect, the above conclusion cannot be drawn for that will make the provision for limiting the period of making the complaint nugatory.” 14. In the above case also on facts, it was found that “appellants in our opinion having themselves raised the contention with regard to the legality and validity of the said notice and, furthermore, having called upon the complainant-respondent to withdraw the same, no exception can be taken to the step taken ‘Abundanti Cautela’ by the complainant-respondent to present the cheque for the third time and issue another notice on 17.12.2003”. 15. In the present case also, the plea of the complainant that he had to present cheque again on the request of the accused remains un-repudiated as stated supra. The complainant had to issue second notice after dishonour of the cheque for second time while making all attempts to comply with the legal requirements. Irrespective of the question as to whether or not, the accused approached the complainant and made a request to present the cheque again, the fact remains that there was no receipt of first notice on the part of the accused and therefore, there was no question of cause of action arising in pursuance of the said notice and the cause of action for the present complaint arises only after receipt of the second notice Ex.P.6 by the accused under Ex.P.7 acknowledgment and his failure to comply with the demand contained therein. 16. The present case is squarely covered by the decision of the Apex Court referred to first supra. The cause of action in the present case arises only once and it was after receipt of the notice Ex.P.6 by the accused under his acknowledgment Ex.P.7 and his failure to make payment. The complaint filed based on such cause of action is, therefore, certainly maintainable. In the circumstances, the impugned order of the learned Magistrate acquitting the accused on the ground that the complaint is not maintainable is unsustainable and it is accordingly set aside and the complaint is held maintainable. 17. However, as the accused was mainly acquitted on the ground of maintainability of the complaint, and there being no specific findings on the merits of the case, it is considered just and proper to remit the matter to the learned Magistrate to dispose of the same afresh on merits in accordance with law, after giving opportunity to both sides to adduce further evidence, if any, they may choose to let in. 18. Having regard to the fact that the case is an old one, the learned Magistrate is further directed to dispose of the same within a period of four (4) months from the date of receipt of the copy of this judgment. 19. Office is directed to send the copy of this judgment along with the lower Court record to the trial Court immediately. 20. In the result, the criminal appeal is allowed accordingly as stated supra. _______________________ G.V.SEETHAPATHY, J Date: 14.10.2009 bss [1] AIR 2009 SC 1538 [2] 1998 SCC (Crl.) 1471