9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (12) TMI 393 - HC - Indian LawsDishonour of the cheque - complaint under 138 of the Negotiable Instruments Act, 1881 - accrual of cause of action -Held that - While interpreting word cause of action under section 142 of the Negotiable Instruments Act in relation to the commission of an offence or the institution of a complaint, reading of section 138 and 142 of the Negotiable Instruments Act makes it abundantly clear that the cause of action to institute a complaint comprises the three different factual prerequisites. It was further held that right of the holder to present the cheque for encashment carries with it a corresponding obligation on the part of the drawer. The omission or the failure of the holder to institute prosecution does not, therefore, give any immunity to the drawer so long as the cheque is dishonoured within its validity period and the conditions precedent for prosecution in terms of the proviso to Section 138 are satisfied. It was further held that so long as the cheque is valid and so long as it is dishonoured upon presentation to the bank, the holder s right to prosecute the drawer for the default committed by him remains valid and exercisable. By reason of a fresh presentation of a cheque followed by a fresh notice in terms of section 138 proviso clause (b), the drawer gets an extended period to make the payment and thereby benefits in terms of further opportunity to pay to avoid prosecution. Such fresh opportunity cannot help the defaulter on any juristic principle, to get a complete absolution from prosecution.
Issues Involved:
1. Validity of the complaint under Section 138 of the Negotiable Instruments Act, 1881 based on the second presentation and dishonour of cheques. 2. Interpretation of "cause of action" under Section 142 of the Negotiable Instruments Act, 1881. 3. Applicability of the judgment in MSR Leathers Vs. S. Palaniappan and another to the present case. 4. Determination of whether the previous judgment relied upon by the lower courts was per incuriam. Issue-wise Detailed Analysis: 1. Validity of the complaint under Section 138 of the Negotiable Instruments Act, 1881 based on the second presentation and dishonour of cheques: The petitioner filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 after the cheques issued by the respondent were dishonoured twice. Initially, the cheques were dishonoured on 2/01/2016, and the petitioner served the first statutory notice on 15/01/2016. However, no complaint was filed within the statutory period after the first dishonour. The cheques were presented again in February 2016 and dishonoured on 11/02/2016, leading to a second notice on 18/02/2016 and the filing of the complaint on 11/03/2016. The lower courts dismissed the complaint, holding that the cause of action started running after the first notice and the subsequent complaint was not maintainable. 2. Interpretation of "cause of action" under Section 142 of the Negotiable Instruments Act, 1881: The court examined the interpretation of "cause of action" under Section 142 of the Negotiable Instruments Act, 1881. The Supreme Court in MSR Leathers Vs. S. Palaniappan clarified that the cause of action to institute a complaint comprises three different factual prerequisites. It emphasized that the holder's right to present the cheque for encashment carries a corresponding obligation on the part of the drawer, and the omission to prosecute after the first dishonour does not give immunity to the drawer if the cheque is presented again within its validity period and dishonoured. 3. Applicability of the judgment in MSR Leathers Vs. S. Palaniappan and another to the present case: The petitioner argued that the judgment in MSR Leathers Vs. S. Palaniappan overruled the principles followed in Prem Chand Vijay Kumar Vs. Yashpal Singh, which was relied upon by the lower courts. The Supreme Court in MSR Leathers held that prosecution based on the second or successive dishonour of the cheque is permissible as long as it satisfies the requirements stipulated in the proviso to Section 138 of the Negotiable Instruments Act. This judgment impliedly overruled the decision in Prem Chand Vijay Kumar. 4. Determination of whether the previous judgment relied upon by the lower courts was per incuriam: The court found that the judgment in Babar Hussain Vs. Arjun Singh Netam, which was relied upon by the lower courts, was per incuriam as it was based on the overruled judgment of Prem Chand Vijay Kumar. The court referred to the principles laid down by the Supreme Court regarding judgments that are per incuriam, which can be ignored if they are given in ignorance of binding statutory provisions or authoritative decisions. Consequently, the order passed in Criminal Revision No.75/2017 and the dismissal of the complaint were rendered per incuriam and set aside. Conclusion: The court remanded the complaint back to the JMFC for adjudication afresh on merits, directing the parties to appear before the JMFC on 22nd January 2018. The court emphasized that the complaint filed within one month of the accrual of the cause of action based on the second dishonour was valid and maintainable under the Negotiable Instruments Act, 1881.
|
