*THE HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.1167 of 2007 %20-11-2009 # Sathu Janardhan ….petitioner Vs. $ P.Naga Vara Prasad and another …. Respondents !Counsel for the petitioner: Sri K.B.Ramanna Dora Counsel for the Respondents: Sri M.L.Ali and Public Prosecutor <Gist : >Head Note: ? Cases referred: [1] 1998(2) ALD (Crl.) 529 (SC) 2 (2005) 4 SCC 417 3 2003(1) ALD (Crl.) 912 (AP) HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.1167 of 2007 O R D E R: This petition is filed by the accused under Section 482 Cr.P.C. for quashing proceedings in C.C.No.99 of 2006 on the file of II Additional Chief Metropolitan Magistrate, Vijayawada, relating to offence punishable under Section 138 of the Negotiable Instruments Act. 2. The respondent filed private complaint in the lower Court against the petitioner alleging offence punishable under Section 138 of the N.I.Act. It is alleged that the accused borrowed Rs.75,000/- on 20.5.2005 from the complainant and executed promissory note in his favour promising to repay the said amount with interest at 24% p.a. and that in spite of demands, the accused did not repay the debt and issued cheque dated 10.8.2005 in favour of the complainant for Rs.68,000/- drawn on State Bank of Hyderabad, ACC branch, Mancherial towards payment under the pronote. The said cheque was presented by the complainant for encashment and it was dishonoured by State Bank of Hyderabad, ACC branch, Mancherial with a memo of ‘funds insufficient’. Thereupon the complainant gave notice dated 26.9.2005 to the accused demanding payment of amount of Rs.68,000/- covered by the dishonoured cheque. The accused got issued reply notice dated 30.09.2005 putting forward some contentions. At that stage, the complainant did not choose to file complaint. Subsequently, the complainant presented the same cheque for encashment through Karur Vysya Bank Limited. For second time, the cheque was dishonoured for ‘insufficient funds’ as per memo dated 21.12.2005 of State Bank of Hyderabad, ACC branch, Mancherial. Thereupon the complainant gave second notice dated 31.12.2005 to the accused informing him about second dishonour and calling upon him to pay amount covered by the cheque. There was no reply from the accused for second notice. Thereafter, the complainant filed private complaint in the lower Court on basis of second dishonour of the cheque. In the complaint, the complainant did not choose to mention about first dishonour. The complainant has only stated about exchange of notices between them prior to second presentation of the cheque for encashment. He did not state in the complaint as to why there was exchange of notices between them prior to second presentation of the cheque through Karur Vysya Bank Limited. But, on perusal of notice dated 26.9.2005, it is evident that the cheque was dishonoured for first time on 29.8.2005 after first presentation and the said notice was given on basis of the said cause of action. 3. Counsel for the petitioner contended that the private complaint is not maintainable on basis of second dishonour, which occurred after exchange of notices between the parties immediately after first dishonour of the cheque. He placed reliance on reported decisions of the Supreme Court and this Court on this aspect. I n Sadanandan Bhadran v Madhavan Sunil Kumar[1], it was observed by the Supreme Court: “Besides the language of Sections 138 and 142 which clearly postulates only one cause of action there are other formidable impediment which negates 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 caluse (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. 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. 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 comlplaint 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 harmonized, 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 the 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”. 4. In Prem Chand Vijay Kumar v Yashpal Singh and another[2] it was held by the Supreme Court that cause of action to file complaint on non-payment of money covered by the dishonoured cheque despite issue of notice arises only once and that another cause of action would not arise on repeated dishonour on presentation of same cheque subsequent to non-payment after the first notice. It was observed therein that the payee is free to present cheque repeatedly within its validity period, but once notice has been issued and payment was not received within 15 days of receipt of the notice, then the payee has to avail the very cause of action arising thereon and file complaint and that dishonour of cheque on each presentation gives a fresh right to present it again during the period of its validity, but it does not give rise to fresh cause of action and that complaint has to be filed within one month from the day immediately following the day on which period of 15 days from date of receipt of the first notice by the drawer expires. 5. Decision of this Court in Sunrise Oleo Chemicals Limited and another v K.M.Enterprises and another[3] is also to the same effect. 6. Having regard to the above legal position, it is evident that private complaint filed by the complainant in the lower Court on 02.02.2006 is barred by limitation when reckoned with date of receipt of first notice by the accused on his failure to make payment of amount covered by the cheque within 15 days thereof. The complainant, having lost opportunity to file complaint on the basis of the said cause of action, is barred from basing his complaint on the basis of subsequent dishonour of the cheque after exchange of first notice. 7. In the result, the criminal petition is allowed quashing proceedings in C.C.No.99 of 2006 on the file of II Additional Chief Metropolitan Magistrate, Vijayawada. ________________________ SAMUDRALA GOVINDARAJULU,J 20th November, 2009. PNV [1] 1998(2) ALD (Crl.) 529 (SC) [2] (2005) 4 SCC 417 [3] 2003(1) ALD (Crl.) 912 (AP)