West Asia Maritime Ltd., No.32, Uthamar Gandhi Road, Chennai 600 034 v. ELNET Ltd., B.8, MEPZ, Tambaram Chennai 600 0482 & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:23.06.2009CORAMTHE HONOURABLE MR. JUSTICE M.JEYAPAULCrl. Appeal No.839 of 1999West Asia Maritime Ltd.,No.32, Uthamar Gandhi Road,Chennai 600 034... Appellant/Complainant Vs.1. ELNET Ltd., B.8, MEPZ, Tambaram Chennai 600 0482.Thiyaragaraja S.Chettiar Baba Foundations, No.15, Balakrishnan Street Mylapore, Chennai 600 0043.N.Madhavan Nambiar4. K.S.Lakshminarayanan... Respondents/Accused 1 to 4Criminal Appeal filed under Section 378(4) Cr.P.C. againstacquittal made in C.C.No.5032/97 on the file of the XIV MetropolitanMagistrate, Egmore, Chennai 8 by an order dated 10.8.1999.For appellant : Mr.V.BalasubramanianFor respondents : Mr.R.Shanmuganathan for R2 No appearance for R1, 3, & 4J U D G M E N TAggrieved by the order of acquittal recorded by the learned 14thMetropolitan Magistrate, Egmore, Chennai in C.C.No.5032 of 1997, thepresent Criminal Appeal is preferred by the complainant.2. The appellant herein filed the complaint before the trialcourt under section 138 of Negotiable Instruments Act alleging thatin discharge of the dues payable by the first accused, the firstaccused issued a cheque bearing No.991231 dated 29.1.1997 for a sumof Rs.25 Lakhs. The said cheque was deposited by the complainant forcollection on 28.5.1997. As the same was returned dishonoured with https://hcservices.ecourts.gov.in/hcservices/ an endorsement "insufficient funds" on 28.5.1997, the complainantissued a statutory notice dated 29.5.1997 alleging that there was nopayment made within 15 days from the date of receipt of notice. Thecomplainant invoking the provisions under section 138 of NegotiableInstruments Act launched prosecution as against all the accused.3. On the side of the complainant, the Assistant Manager of thecomplainant was examined as P.W.1. The Branch Manager of thecomplainant bank was examined as P.W.2 and the Bank Manager of theaccused bank was examined as P.W.3. As many as 13 documents weremarked on the side of the complainant. On the side of the accused,the employee working under the first accused was examined as D.W.1and D.W.2 and 10 documents were marked on the side of the accused.4. The trial court having found that the complainant chose toissue earlier notice dated 9.4.1997 under Ex.D.2 and failed toprosecute the accused within 30 days from the expiry of 16 days fromthe date of receipt of notice by the accused, chose to acquit theaccused.5. The learned counsel appearing for the complainant wouldsubmit that there was no earlier notice as contended by the accused.The alleged earlier notice issued by the complainant to the accusedwas not established. It is his further contention that the chequenumber and the specific amount covered under the subject cheque werenot specifically referred to in the alleged notice Ex.D.2 issued bythe complainant to the accused. It is his further submission thateven if such an earlier notice was issued by the complainant to theaccused, there is only one prosecution and there is no successiveprosecution. Therefore, he would submit that the trial court hasmisdirected itself to come to a wrong decision that the complainantis not entitled to prosecute the accused.6. The learned counsel appearing for the accused would submitthat the issuance of earlier notice dated 9.4.1997 under Ex.D.2 wasestablished by producing the notice issued by the complainant and theextract of the Cheque Return Register maintained by the accused Bank.It is his further submission that the postal cover in which Ex.D.2was sent to the first accused bank was also produced to buttress thegenuineness of Ex.D.2 issued by the complainant and received by thefirst accused. Therefore, he would submit that the presentprosecution initiated by the complainant beyond the period oflimitation as prescribed under Section 142 of Negotiable InstrumentsAct is not at all maintainable. Therefore, the trial court hasrightly approached the legal issue and rendered the finding that thecomplainant cannot lawfully prosecute the accused, based on thesecond notice Ex.P.4, it is further submitted. https://hcservices.ecourts.gov.in/hcservices/

7. As regards the subsisting liability and the issuance of thesubject cheque Ex.P.2 for a sum of Rs.25 Lakhs, no serious disputehas arisen.8. It is contended by the complainant that no earlier statutorynotice was issued under Ex.D.2. The copy of the statutory noticeEx.D.2, the postal cover in which the statutory notice was receivedand the extract of the Cheque Return Register maintained by the SouthIndian Bank, Nungambakkam Branch, Chennai would go to establish thatthe complainant had in fact issued a statutory notice as on 9.4.1997calling upon the accused to make payment of the amount due under thecheque.9. Of course the said notice does not specifically refer to thecheque number but the date and amount of the cheque have beenspecifically referred to in the said notice. If we correlate thoseparticulars with the information available in the extract of ChequeReturn Register maintained by the South Indian Bank, NungambakkamBranch, we can very easily come to the decision that the earliernotice Ex.D.2 dated 9.4.1997 refers only the subject cheque dated29.1.1997 issued by the accused to the complainant for a sum of Rs.25Lakhs.10. The complainant, who has failed to refer to the above chequein the statutory notice cannot be permitted to take advantage of hisown wrong to defend that such a notice cannot be construed asstatutory notice.11. It is further contended that the said statutory notice wasnot issued specifically for claiming a sum of Rs.25 Lakhs in thesubject cheque dated 29.1.1997. The said notice also refers toanother cheque for Rs.4,79,452/- issued by the 2nd accused in hisindividual capacity. Though the complainant has referred to twocheques in the statutory notice Ex.D.2 and has come out with theprosecution under section 138 in connection with the subject chequefor Rs.25 Lakhs, the Court finds that the statutory notice issued forthe comprehensive amount of Rs.29,79,452, which is the accrued amountfor two cheques, one for Rs.25 Lakhs and another for Rs.4,79,452 doesnot become invalid.12. The complainant is bound to initiate criminal action undersection 138 of Negotiable Instruments Act within 30 days from thedate of receipt of notice Ex.D.2. The subsequent notice Ex.P.4 hasbeen issued only on 29.5.1997 and the same was acknowledged by theaccused under Ex.P.5 on 31.5.1997. The present complaint has beenlaunched on 11.7.1997 well beyond the expiry of 30 days from the dateof receipt of the first statutory notice dated 9.4.1997. https://hcservices.ecourts.gov.in/hcservices/

13. The Supreme Court in Sadanandan Bhadran vs. Madhavan SunilKumar, 1998 (II) CTC 462 has held that an offence under section 138of Negotiable Instruments Act is presumed to be committed by thedrawer of the cheque immediately on failure to make payment within 15days of receipt of the registered notice in accordance with clause(b) to proviso under section 138 of Negotiable Instruments Act. Thecause of action for filing the complaint under section 138 ofNegotiable Instruments Act arises only once. The concept ofsuccessive cause of action cannot be read into sections 138 and 142of N.I.Act. It has been categorically held that the drawer of thecheque gets absolved of the offence, if no prosecution was launchedon his failure to make payment within 15 days of receipt of noticeserved in accordance with clause (b) to proviso to section 138 ofNegotiable Instruments Act. Once notice under Clause (b) of section138 is issued, the payee forfeits such rights, if he does notinitiate prosecution on failure of drawer to pay money within thestipulated time after receipt of registered notice. 14. The said decision was reiterated in the subsequent judgmentin Prem Chand Vijay Kumar vs. Yashpal Singh and another, (2005) 4 SCC417. It has been held therein that the payee is at liberty topresent the cheque repeatedly within its validity period, but oncenotice was issued and the payment was not forthcoming within15 daysfrom the date of receipt of such notice, the payee is bound to availthe very cause of action arising thereupon and lodge the complaint.So, the dishonour of the cheque of each presentation gives rise to afresh right to present it again during the period of its validity,but it does not give a fresh cause of action.15. The learned counsel appearing for the complainant wouldrefer to the decision of the Supreme court in R.S.Traders v. RitaKhanna, 1998 (93) Company Cases 665. That was a case where thecheque, which was dishonoured was time and again represented forpayment, but based on the only statutory notice issued after the lastdishonour was intimated to the complainant, prosecution under section138 of Negotiable Instruments Act was launched. In the above factsand circumstances of the case, the Supreme Court observed that therewas delay in prosecution in that case and that successive invocationof the prosecution under section 138 is barred. It has also beenobserved that there have been no successive prosecutions orconvictions on the strength of one dishonoured cheque in that case.16. The aforesaid ratio laid down by the Supreme Court does notrun counter to the decision already rendered by the Supreme Court inSadanandan Bhadran vs. Madhavan Sunil Kumar, 1998 (II) CTC 462 andreiterated in the subsequent judgment in Prem Chand Vijay Kumar vs.Yashpal Singh and another, (2005) 4 SCC 417. https://hcservices.ecourts.gov.in/hcservices/

17. The complainant being the payee can present the cheque anynumber of times within six months from the date of issuance ofcheque. But, once he issued the statutory notice calling upon thedrawer of the cheque to make payment, he cannot escape from the on-set of period of limitation prescribed under section 138 read withSection142 of Negotiable Instruments Act.18. On facts, it is found that the complainant has come out withthe present complaint after the expiry of 30 days from the date ofreceipt of the earlier statutory notice Ex.D2.dated 9.4.1997. Thetrial court has rightly returned the finding that such a complaintlodged by the complainant based on the subsequent notice is not atall maintainable in law as it is barred by limitation.19. In the elaborate judgment, the trial court has adverted tothe entire gamut of facts in this case and the question of lawarising in the matter and has returned the verdict that the complaintis not maintainable and therefore the accused is entitled toacquittal. The order of acquittal in the above facts andcircumstances of the case does not warrant reversal. 20. In view of the above, confirming the judgment of theacquittal recorded by the trial court, the appeal stands dismissed. Sd/- Asst.Registrar/true copy/ Sub Asst.RegistrarajrTo1.The XIV Metropolitan Magistrate, Egmore, Chennai 8 2.-do- Through The Chief Metropolitan Magistrate, Egmore, Chennai-8.3.The Section Officer, Criminal Section, High Court, Madras.+1 cc to Mr.VR.Shanmuganathan, Advocate, SR.No.25920CRL.A.No.839 of 1999CU {CO}TP/13.7.2009.