2014 (1) TMI 736 - SC - Companies Law

Quashing of order u/s 482 - Dishonour of Cheque - Held that - complainant had not filed the complaint on the dishonor of the cheque in the first instance, but presented the said cheque again for encashment. This right of the complainant in presenting the same very cheque for the second time is available to him under the aforesaid provision - there cannot be any quarrel and the act of the complainant in presenting the cheque again cannot be questioned by the appellant. However, we find that when the cheque was presented second time on 10.11.2008 and was returned unpaid, legal notice for demand was issued only on 17.12.2008 which was not within 30 days of the receipt of the information by him from the Bank regarding the return of the cheque as unpaid. Non issuance of notice within the limitation prescribed has rendered the complaint as not maintainable. It is thus clear that period of limitation is not to be counted from the date when the cheque in question was presented in the first instance on 25.10.2008 or the legal notice was issued on 27.10.2008, inasmuch as the cheque was presented again on 10.11.2008. For the purposes of limitation, in so far as legal notice is concerned, it is to be served within 30 days of the receipt of information by the drawyee from the bank regarding the return of the cheque as unpaid. Therefore, after the cheque is returned unpaid, notice has to be issued within 30 days of the receipt of information in this behalf. That is the period of limitation provided for issuance of legal notice calling upon the drawer of the cheque to make the payment. After the sending of this notice 15 days time is to be given to the noticee, from the date of receipt of the said notice to make the payment, if that is already not done. If noticee fails to make the payment, the offence can be said to have been committed and in that event cause of action for filing the complaint would accrue to the complainant and he is given one month time from the date of cause of action to file the complaint - he received the information about the dishonor of the cheque on 10.11.2008 itself. However, he did not send the legal notice within 30 days therefrom. We, thus, find that the complaint filed by him was not maintainable as it was filed without satisfying all the three conditions laid down in Section 138 of the N. I. Act - Decided in favour of appellant.

Summary

Issues Involved:
1. Maintainability of the criminal complaint under Section 138 of the Negotiable Instruments Act (N.I. Act).
2. Timeliness of the complaint filed under Section 138 of the N.I. Act.

Detailed Analysis:

1. Maintainability of the Criminal Complaint under Section 138 of the N.I. Act
The appellant challenged the maintainability of the criminal complaint filed by respondent No.2 under Section 138 of the N.I. Act. The High Court dismissed the appellant's petition under Section 482 of the Cr.P.C., stating that the trial had already commenced and two witnesses had been examined and discharged. The High Court did not address the appellant's contentions regarding the maintainability of the complaint, leaving those issues to be decided by the trial court.

2. Timeliness of the Complaint Filed under Section 138 of the N.I. Act
The appellant argued that the complaint was time-barred and not filed within the stipulated period prescribed by law. The facts of the case are as follows:
- The cheque in question was presented on 25.10.2008 and was dishonored.
- A legal notice was issued on 27.10.2008.
- The cheque was presented again on 10.11.2008 and was dishonored again.
- Another legal notice was issued on 17.12.2008.
- The complaint was filed on 07.01.2009.

The appellant contended that the second legal notice was not issued within the 30-day period prescribed by Section 138(b) of the N.I. Act, which rendered the complaint non-maintainable.

Legal Provisions and Interpretation:
Section 138 of the N.I. Act outlines the conditions under which dishonor of a cheque constitutes an offense:
- The cheque must be presented within six months from the date it is drawn.
- A demand for payment must be made within 30 days of receiving information about the dishonor.
- The drawer must fail to make the payment within 15 days of receiving the notice.

Section 142 of the N.I. Act governs the cognizance of offenses and stipulates that a complaint must be made within one month of the cause of action arising.

In the case of MSR Leathers vs. S. Palaniappan & Anr. (2013) 1 SCC 177, the Supreme Court held that the payee has the right to present the cheque multiple times within its validity period and can issue a fresh notice upon each dishonor.

Application to the Present Case:
The cheque was presented for the second time on 10.11.2008, and the complainant issued a legal notice on 17.12.2008, which was beyond the 30-day period from the date of dishonor. The complainant admitted in the complaint that he went to the bank on 10.11.2008 and found the cheque dishonored due to insufficient funds. This admission established that the complainant received information about the dishonor on 10.11.2008, making the legal notice issued on 17.12.2008 untimely.

Conclusion:
The Supreme Court concluded that the complaint was not maintainable as it did not satisfy all the conditions laid down in Section 138 of the N.I. Act. The appeal was allowed, the High Court's order was set aside, and the complaint was dismissed.