2008 (10) TMI 600 - SC - Companies Law

Whether the legal requirements have been complied with by the respondent herein so as to enable him to maintain the complaint petition or not? Held that - It may be true that the High Court has not elaborately dealt with this aspect of the matter but the same would not mean that we should remit the matter back to the High Court for consideration of the matter afresh as we have gone into the question raised by the parties ourselves. Appeal dismissed.

Issues Involved:
1. Legality of presenting the cheque for the third time under Section 138 of the Negotiable Instruments Act.
2. Validity and sufficiency of notices issued under Section 138.
3. Compliance with legal requirements for maintaining the complaint petition.

Detailed Analysis:

1. Legality of Presenting the Cheque for the Third Time:
The appellants contended that under Section 138 of the Negotiable Instruments Act, a cheque could not be presented for the third time. The court observed that the cheque was presented within six months from its date, which is within the permissible period. The court clarified that the number of times a cheque is presented is immaterial as long as it is within the stipulated period. The court stated, "What is prohibited is presentation of the cheque within the afore-mentioned period and not the number of times it is presented."

2. Validity and Sufficiency of Notices Issued:
The appellants argued that the complainant suppressed the fact of earlier notices and that no order taking cognizance of the offence should have been passed. The court examined the sequence of notices: the first notice dated 8.7.2003 was not received by the appellants, and the second notice dated 9.9.2003 was returned unserved. The appellants' advocate raised issues regarding the legality of the second notice, which was addressed to the wrong entity (S.L. Structures and Engineers instead of S.L. Constructions). Consequently, the court found no fault in the complainant presenting the cheque for the third time and issuing a third notice on 17.12.2003. The court noted, "Appellants in our opinion having themselves raised the contention with regard to the legality and validity of the said notice... 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."

3. Compliance with Legal Requirements for Maintaining the Complaint Petition:
The court reviewed whether the respondent complied with the legal requirements under Sections 138, 139, and 142 of the Negotiable Instruments Act. The cheque was presented within the six-month period, and the third notice was issued within the prescribed period. The court emphasized, "Successive issuance of notices having been made under Section 138 of the Act as laid down under the proviso appended thereto, the respondent merely made all attempts to comply with the legal requirements." The court concluded that the respondent's actions were legally compliant, and the High Court did not err in dismissing the appellants' petition.

Conclusion:
The court dismissed the appeal, affirming that the cause of action for filing a complaint arose only once and was validly maintained by the respondent. The court held, "As the issuance of cheque, non-payment thereof on presentation, issuance of a valid notice calling upon the drawer of the cheque to pay the amount in question and the appellants' failure to pay... a cause of action arose for filing a complaint petition." The appeal was dismissed with costs quantified at Rs. 10,000/-.

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