Satishkumar Jain vs Krishnagopal Sarda

Citations: (1993) 95 BOMLR 869, 1994 CriLJ 887

Case Summary :

1. This revision application under section 397 of the Code of Criminal Procedure is for setting aside the order passed by the learned Judicial Magistrate, First Class rejecting  the application filed by the applicant challenging the maintainability of the criminal complaint filed by the non-applicant or for quashing the criminal proceedings initiated by the non-applicant.

2. The main question that arises for my consideration in this revision application is if the cheque bounces on presentation for the second time, can a criminal complaint under S. 138 of the Negotiable Instruments Act, 1881 is maintainable. In other words, whether the complainant under S. 138 of the Act can have second cause of action on the same cheque when no complaint was filed by him on bouncing of the cheque for the first time which furnishes him first cause of action.

4. This second cause of action can be explained by the facts of this case. The applicant issued three cheques in favour of the non-applicant. All the cheques came to be dishonoured by the banker on presentation. In a written reply of the notice sent by the non-applicant to the applicant directing to present the cheques again. Therefore, the cheques were presented by the non-applicant for the second time. However, they were again dishonoured. Hence, the non-applicant again a issued notice to the applicant . The non-applicant thereupon waited for 15 days and filed the complaint. The same came to be registered as Criminal Case No. 136 of 1990.

5. The applicant contented that the criminal complaint cannot fall within the purview of S.138 read with S.142 of the Negotiable Instruments Act,1881 because the presentation of the cheques for the second time and dishonour thereof cannot furnish any cause of action for the non-applicant to file the present case. 

6. Two points of question raised each from the applicant and the non-applicant in the matter in issue :

1. By the Kerala High Court in Kumarsan v. Ameerappa hold that the Negotiable Instruments Act does not lay down any limitation on number of times that the cheque may be presented for encashment within a period of six moths or the validity thereof, whichever is earlier, complaint can be filed even after bouncing of the cheque for the second time.
2. The complaint filed by the non-applicant was beyond limitation in view of S. 138 and S.142 of the Act since the dishonour of the cheque for the second time cannot furnish a cause for the non-applicant to file the criminal complaint. In support of this argument the applicant quoted from Kumarsan v Ameerappa : 
   "Chapter XVII of the Act two features loom large. First is that more than one cause of action on the same cheque is not contemplated or envisaged. Second is, institution of prosecution cannot be made after one month of the cause of action. If more than one cause of action on the same cheque can be created, its consequence would be that the same drawer of the cheque can be prosecuted and even convicted again and again on the strength of the same cheque. Legislature cannot be imputed with the intention to subject a drawer of cheque to repeated prosecutions and convictions on the strength of one cheque".

7. The court accepted the argument that S.138  does not prohibit or forbid presentation of the cheque to the bank more than once for payment. Under S.138(a) the cheque must be presented to the bank within a period of six months or within the period of its validity, whichever is earlier. So on such dishonour of the cheque after they had been presented for payment within the period of six months from the dates when they were drawn, a fresh right accrued in favour of the payee that he can certainly enforce that right under section 138 of the Act.

8. In view of the above issues the court set a narrow interpretation of S.138 and S.142 of the Act. The applicant in this case requested the non-applicant to present the cheque to the banker for the second time when the non-applicant issued notice to him pointing out the dishonour of the cheque for the first time. The non-applicant presented the cheque withing the guidance of the applicant for the second time. It is clear that he has presented it for the second time because of hope created for him by the applicant himself that it will be encased. The court gave prominence in business practice. For a businessman under some consequences may faces small difficulties by which the cheque gets bounced. So a payee can after getting suitable reply from the drawer can wait for some time and can proceed with presentation of the cheque second time.

9. But in this case after the reply of the notice and the presentation of the cheque by the applicant for the second time and bounce thereafter, the criminal complaint was filed to the court. In view of this, the applicant is also estopped from raising this contention. Thus, the revision application was rejected.