Delhi High Court
Celebration City Projects Pvt. … vs Stup Consultants Pvt.Ltd. on 6 September, 2012
Author: Pratibha Rani
IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on : 23rd August,2012
Pronounced on :6th September, 2012
CRL.M.C. 1661/2011
CELEBRATION CITY PROJECTS PVT LTD
& ORS ….. Petitioners
Through: Mr.Ajay Kohli, Advocate.
versus
STUP CONSULTANTS PVT LTD ….. Respondent
Through: None.
AND
CRL.M.C. 1662/2011
CELEBRATION CITY PROJECTS PVT LTD
& ANR ….. Petitioners
Through: Mr.Ajay Kohli, Advocate
versus
STUP CONSULTANTS PVT LTD ….. Respondent
Through: None.
AND
CRL.M.C. 1663/2011
CELEBRATION CITY PROJECTS PVT LTD
& ORS ….. Petitioners
Through: Mr.Ajay Kohli, Advocate.
versus
STUP CONSULTANTS PVT LTD ….. Respondent
Through: None.
AND
CRL.M.C. 1664/2011
INDIRAPURAM HABITAT CENTRE PVT LTD
& ORS ….. Petitioners
Through: Mr.Ajay Kohli, Advocate.
versus
STUP CONSULTANTS PVT LTD ….. Respondent
Through: None.
AND
CRL.M.C. 1665/2011
INDIRAMPURAM HABITAT CENTRE PVT LTD
& ORS ….. Petitioners
Through: Mr.Ajay Kohli, Advocate.
versus
STUP CONSULTANTS PVT LTD ….. Respondent
Through: None.
CORAM:
HON’BLE MS. JUSTICE PRATIBHA RANI
PRATIBHA RANI, J.
1. By this common order, I propose to dispose of five Criminal Misc. Petitions bearing Nos.1661/2011, 1662/2011, 1663/2011, 1664/2011 and 1665/2011 filed by the petitioners as common issue is involved for consideration.
2. The petitioners have filed these petitions under 
Section 482 CrPC questioning the maintainability of the complaints under Section 138 of Negotiable Instruments Act (hereinafter referred to as NI Act) filed by the respondent herein as well the summoning orders passed by learned MM in the complaints under Section 138 NI Act which were legally not maintainable.
3. Bereft of unnecessary details, the case of the petitioners is that :
Crl.M.C. No.1661/2011 This petition is filed against the orders passed in Complaint Case No.102/10 under Section 138 NI Act which was filed by the respondent in respect of Cheque No.000086 dated 25.12.2009 for a sum of Rs.8,60,493/- issued in favour of the respondent by the petitioners. The respondent presented the said cheque for encashment which was dishonoured and returned with the bank memo dated 29.12.2009. The respondent sent a notice dated 21.01.2010 informing the petitioners about the bouncing of the cheque for the reasons “Funds insufficient” “Exceeds Arrangement” and their statutory obligation to make the payment in lieu of the dishonoured cheque within 15 days of the receipt of their notice failing which the respondent would be compelled to initiate appropriate proceedings under Negotiable Instrument Act. Despite service of notice dated 21.01.2010, the petitioners failed to make the payment but instead of filing a complaint within a statutory period, the respondent presented the cheque again on 27.01.2010 which was returned with bank memo dated 29.01.2010. The cheque was presented again on 09.06.10 and returned with bank memo dated 10.06.2010. The respondent sent second notice dated 06.07.2010 under Section 138 NI Act and on failure of the petitioners to pay the amount on second notice also, the complaint case No.102/10 under Section 138 NI Act was filed on 21.08.2010 on the basis of second notice dated 06.07.2010. Learned MM passed the order on 04.12.2010 thereby summoning the petitioners for committing the offence punishable under Section 138 NI Act.
Crl.M.C. No.1662/2011 This petition arises from the orders passed in Complaint Case No.2327/10 (Old No.2181/1) under Section 138 NI Act which was filed by the respondent in respect of Cheque No.000081 dated 25.09.2009 for a sum of Rs.20 lacs issued in favour of the respondent by the petitioners. The respondent presented the said cheque for encashment which was dishonoured and returned with the bank memo dated 26.09.2009. The respondent sent a notice dated 21.10.2009 informing the petitioners about the bouncing of the cheque for the reasons “Exceeds Arrangement” and their statutory obligation to make the payment in lieu of the dishonoured cheque within 15 days of the receipt of their notice failing which the respondent would be compelled to initiate appropriate proceedings under Negotiable Instrument Act. Despite service of notice dated 21.10.2009, the petitioners failed to make the payment but instead of filing a complaint within a statutory period, the respondent presented the cheque again on 26.10.2009 which was returned with bank memo dated 27.10.2009. The respondent sent second notice dated 25.11.2009 under Section 138 NI Act and on failure of the petitioners to pay the amount on second notice also, the complaint case No.2327/10 (Old No.2181/1) under Section 138 NI Act was filed on 12.01.2010 on the basis of second notice dated 25.11.2009. Learned MM passed the order on 19.08.2010 thereby summoning the petitioners for committing the offence punishable under Section 138 NI Act.
Crl.M.C. No.1663/2011 This petition is filed against the orders passed in Complaint Case No.1746/10 under Section 138 NI Act which was filed by the respondent in respect of Cheque No.000079 dated 25.03.2009 for a sum of Rs.20 lacs issued in favour of the respondent by the petitioners. The respondent presented the said cheque for encashment which was dishonoured and returned with the bank memo dated 28.03.2009. The respondent sent a notice dated 06.04.2009 informing the petitioners about the bouncing of the cheque for the reasons “Funds Insufficient”. In continuation of notice dated 06.04.2009, another notice dated 14.04.2009 was sent informing the petitioners of their statutory obligation to make the payment in lieu of the dishonoured cheque within 15 days of the receipt of their notice and notifying that the payment was to be made on or before 21.04.2009 failing which the respondent would be compelled to initiate appropriate proceedings under Negotiable Instrument Act. Despite service of notice dated 06.04.2009 and 14.04.2009, the petitioners failed to make the payment but instead of filing a complaint within a statutory period, the respondent presented the cheque again on 27.04.2009 which was returned with bank memo dated 29.04.2009. The respondent sent third notice dated 13.05.2009 under Section 138 NI Act and on failure of the petitioners to pay the amount on that notice also, the complaint case No.1746/10 under Section 138 NI Act was filed on 02.07.2009 on the basis of third notice dated 13.05.2009. Learned MM passed the order on 15.12.2010 thereby summoning the petitioners for committing the offence punishable under Section 138 NI Act.
Crl.M.C. No.1664/2011 This petition arises from the orders passed in Complaint Case No.104/10 under Section 138 NI Act which was filed by the respondent in respect of Cheque No.166132 dated 25.12.2009 for a sum of Rs.9,15,256/- issued in favour of the respondent by the petitioners. The respondent presented the said cheque for encashment which was dishonoured and returned with the bank memo dated 29.12.2009. The respondent sent a notice dated 21.01.2010 informing the petitioners about the bouncing of the cheque for the reasons “Funds insufficient” and their statutory obligation to make the payment in lieu of the dishonoured cheque within 15 days of the receipt of their notice failing which the respondent would be compelled to initiate appropriate proceedings under Negotiable Instruments Act. Despite service of notice dated 21.01.2010, the petitioners failed to make the payment but instead of filing a complaint within a statutory period, the respondent presented the cheque again on 09.06.2010 which was returned with bank memo dated 10.06.2010. The respondent sent second notice dated 06.07.2010 under Section 138 NI Act and on failure of the petitioners to pay the amount on second notice also, the complaint case No.104/10 under Section 138 NI Act was filed on 21.08.2010 on the basis of second notice dated 06.07.2010. Learned MM passed the order on 04.12.2010 thereby summoning the petitioners for committing the offence punishable underSection 138 NI Act.
Crl.M.C. No.1665/2011 The petitioners issued cheque No.166118 dated 25.03.2009 for a sum of Rs.20 lacs in favour of the respondent which was presented for encashment but it was dishonoured and returned with the bank memo dated 28.03.2009. The respondent sent a notice dated 06.04.2009 informing the petitioners about the bouncing of the cheque for the reasons “Funds Insufficient”. In continuation of notice dated 06.04.2009, another notice dated 14.04.2009 was sent informing the petitioners of their statutory obligation to make the payment in lieu of the dishonoured cheque within 15 days of the receipt of their notice and notifying that the payment was to be made on or before 21.04.2009 failing which the respondent would be compelled to initiate appropriate proceedings under Negotiable Instruments Act. Despite service of notice dated 06.04.2009 and 14.04.2009, the petitioners failed to make the payment but instead of filing a complaint within a statutory period, the respondent presented the cheque again on 27.04.2009 which was returned with bank memo dated 29.04.2009. The respondent sent third notice dated 13.05.2009 under Section 138 NI Act and on failure of the petitioners to pay the amount on third notice also, the complaint case No.1749/1 under Section 138 NI Act was filed on 02.07.2009 on the basis of third notice dated 13.05.2009. Learned MM passed the order on 15.12.2010 thereby summoning the petitioners for committing the offence punishable under Section 138 NI Act.
4. Notices of these petitions were sent to the respondent. Mr.P.Roy Chaudhary, Advocate appeared on behalf of respondent on 09.08.2012 and sought time to file reply. Thereafter again on 10.05.2012, Mr.S.K.Jain, proxy counsel for Mr.P.Roy Chaudhary, Advocate appeared and sought adjournment. Respondent failed to file any reply even thereafter and the liberty given to the respondent to file brief written synopsis also remained unavailed.
5. I have heard Mr.Ajay Kohli, learned counsel for the petitioners and carefully gone through the record. The short question to be decided in these cases is whether the complaint under Section 138 NI Act is maintainable on the basis of second/subsequent notice served after presentation of the cheque again when the complainant failed to take necessary legal action after serving first notice, on failure of the petitioners to pay the amount within 15 days of receipt of notice.
6. While the complainant is free to present the cheques repeatedly within their validity period, once a demand notice is sent and payment not received within 15 days from the date of receipt of notice, cause of action arises in favour of the complainant to file the complaint within a period of one month from the day immediately following the day when the period of 15 days from the date of receipt of notice expires.
7. It is no longer res integra that cause of action to file the complaint on non-payment of cheque and after issuance of notice arises but only once. Though the payee could present the cheque repeatedly during its validity period but each presentation of the cheque and its dishonour gives rise to a fresh right and not cause of action. Once a notice has been given and payment not made within the stipulated period i.e. 15 days of receipt of notice, he has to avail that very cause of action.
8. A bare reading of Section 138 NI Act makes it clear that a Court can take cognizance on a written complaint of an offence under Section 138 NI Act if it is made within one month of the date on which the cause of action arises under Section 138(c) of NI Act. In Sadanandan Bhadran vs. Madhavan Sunil Kumar (1998) 6 SCC 514, the Supreme Court has dealt with this aspect and observed 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:
“Notwithstanding anything contained in the CrPC, 1973
(a) no court shall take congnizance of any offence punishable Under Section 138except 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;
(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.”
8. 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:
(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. Conse-quent upon the failure of the drawer to pay the money within the period of 15 days as envisaged under Clause (c) of the proviso to Section 138, the liability of the drawer for being prosecuted for the offence he has com-mitted 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.
9. 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 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.
9. The aforesaid legal position has been reiterated in subsequent decision also reported as Prem Chand Vijay Kumar vs. Yashpal Singh and Anr. (2005) 4 SCC 417. In paras 13 to 15 of the report, it was held as under :-
’13. As noted in Sadanandan Bhadran’s case (supra) once a notice under Clause (b) of Section 138 of the Act is “received” by the drawer of the cheque, the payee or holder of the cheque, 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 and the period of limitation starts to run which cannot be stopped on any account.
14. 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.
15. 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.’
10. Thus once demand notice was sent but the complainant did not receive the payment within 15 days of receipt of notice, the complaint could have been filed within a period of one month to be calculated from the day immediately following the day on which the period of 15 days from the date of receipt of notice expires. Once cause of action arose, subsequent presentation of cheque, its dishonour and sending of second notice or a third notice could not give rise to a fresh cause of action to the complainant to fasten criminal liability under Section 138 NI Act on the petitioners.
11. As all the complaint cases bearing No.1749/1, 104/10, 1746/1, 2327/10 (Old 2181/1) and 102/10 have been filed beyond period of one month from the date when cause of action has arisen in favour of the respondent, the same were barred by limitation. Accordingly, the Crl.M.C. Nos.1661, 1662, 1663, 1664 & 1665 of 2011 are allowed and Complaint Cases No. bearing No.1749/1, 104/10, 1746/1, 2327/10 (Old 2181/1) and 102/10 and all the proceedings emanating therefrom are quashed.
12. A copy of this order be sent to the Trial Court.
PRATIBHA RANI, J September 06, 2012 ‘st’