Santosh Stationary Pvt. Ltd v. Satyendra Nath Shukla) under Section
Legal Reasoning
HIGH COURT OF JUDICATURE AT ALLAHABAD ***** (Sl No.1) Court No. - 79 Case :- APPLICATION U/S 482 No. - 13838 of 2024 Applicant :- Satyendra Nath Shukla Opposite Party :- State of U.P. and Another Counsel for Applicant :- Manoj Kumar Counsel for Opposite Party :- G.A. Hon'ble Anish Kumar Gupta,J.
Legal Reasoning
1. Heard Sri Girish Pandey, Advocate holding brief of Sri Manoj Kumar, learned counsel for the applicant and Sri Anish Kumar Upadhyay, learned A.G.A. for the State. 2. The instant application under Section 482 Cr.P.C. has been filed seeking quashing of the summoning order dated 09.05.2022 in Complaint Case No. 3182 of 2019 (Santosh Stationary Pvt. Ltd. vs. Satyendra Nath Shukla) under Section 138 of the Negotiable Instruments Act, 1881 (in short, 'the N.I. Act'), P.S.- Cantt., District- Varanasi, pending in the court of learned Additional Chief Judicial Magistrate, Court No.3, Varanasi. 3. Learned counsel for the applicant submits that in the instant case the cheque in question was issued by the applicant herein as a security to the business transactions between the parties, however, without there being any liability the same has been mis-utilized by the opposite party no.2 and has been presented for encashment, which was dishonored and after initial dishonor of the cheque, the opposite party no.2 had sent a legal demand notice, which was returned unserved to the applicant. Subsequent thereto, he has again presented the cheque for encashment and again, it was dishonored. Thereafter, again the second legal demand notice was sent, which was served and thereafter the instant complaint case has been filed by the opposite party no.2. Learned counsel for the applicant relying upon the judgement of the Apex Court in Tameeshwar Vaishnav vs. Ramvishal gupta : AIR 2010 SC 1209, submits that once after dishonor of cheque a legal demand notice was sent, then, the cause of action arises, therefore, it is not permissible for the opposite party no.2 to represent the cheque after the cause of action has arisen in the instant case. Therefore, the complaint on the basis of the second dishonor and second legal demand notice is not maintainable. Therefore, learned counsel for the applicant seeks quashing of the entire proceedings of the instant complaint case. 6. Per contra, learned A.G.A for the State submits that the cause of action for filing the complaint arises after 15 days of the expiry of the notice period from the date of service of notice. In the instant case, initially after the dishonor of cheque on 03.06.2019, a legal demand notice was issued on 13.06.2019, however, the same was returned unserved. Therefore, no cause of action had ever arisen as the notice was never served to the applicant. Subsequent thereto, the cheque was again presented on 06.07.2019, which was dishonored. Thereafter, again a legal demand notice dated 13.07.2019 was issued which was served on the applicant herein on 20.07.2019. Thereafter, when the notice was not complied within the period of 15 days, as per Section 138 (c) of the N.I. Act, the cause of action had arisen to the applicant herein to file the complaint case. Accordingly, the complainant case under Section 138 of the N.I. Act was filed on the basis of such second dishonor of cheque. Therefore, there is no illegality and the judgement relied upon by the applicant is not applicable to the facts of the case. 7. Having heard the rival submissions so made by learned counsels for the parties, this Court has carefully gone through the record of the case. From the record of the case, it is apparent that there were business transactions between the applicant and the opposite party no.2 and in pursuance thereof the cheque in question amounting Rs. 8,55,297/- was issued by the applicant herein, in favour of the opposite party no.2 which was presented on 31.05.2019 for encashment, which was dishonored initially on 03.06.2019. Thereupon, the legal demand notice was issued on 13.06.2019, which was returned unserved. Thereafter, again same cheque was presented for enashment which was dishonored on 06.07.2019. Thereupon, a legal demand notice dated 13.07.2019 was issued to the applicant herein, which was served to the applicant on 20.07.2019. Thereupon, the cause of action for filing the complaint had arisen on the opposite party no.2 on 04.08.2019 after expiry of 15 days in terms of proviso (c) to Section 138 of the N.I. Act. Thereafter, the instant application case was filed within a period prescribed under Section 142 (1)(b) of the N.I. Act. 8. In Tameeshwar Vaishnav (supra), the the Apex Court has held as under: "15. On careful scrutiny of the decision in S.L. Construction's case (supra), it would appear that the facts on the basis of which the said decision was rendered, were different from a case of mere presentation and dishonour of the cheque after issuance of notice under the proviso to Section 138 of the Act. While the decision in Sadanandan Bhadran's case (supra), clearly spells out that a cheque may be presented several times within the period of its validity, the cause of action for a complaint under Section 138 of the Act arises but once, with the issuance of notice after dishonour of the cheque and the receipt thereof by the drawer. The same view has been reiterated in Prem Chand Vijay Kumar's case (supra). The only distinguishing feature of the decision in S.L. Construction's case (supra) is that of the three notices issued, the first two never reached the addressee. It is only after the third notice was received that the cause of action arose for filing the complaint. In effect, the cause of action for filing the complaint in the said case did not arise with the issuance of the first two notices since the same were never received by the addressee." (Emphasis Supplied) 9. From the aforesaid judgement it is crystal clear that once the demand notice after dishonor of cheque was issued and served on the drawer, only then, the cause of action would be deem to have arisen. Therefore, once the cause of action arisen, the drawee is debarred from representing the cheque. However, in the instant case earlier demand notice was never served on the applicant herein and it was returned unserved. Therefore, there is no cause of action arisen in favour of the opposite party no.2. Therefore, he had represented the cheque and again after the second dishonor he had issued second legal demand notice which was served and was not complied with by the applicant. Thereupon, after the expiry of 15 days and within the period prescribed under Section 142(1)(b) of the N.I. Act, the instant complaint case has been filed. Therefore, this Court does not find any illegality in the complaint so filed by the opposite party no.2 and the judgement relied upon by the applicant herein is of no help to the applicant herein. 10. The another argument which has been raised by learned counsel for the applicant that it was a security cheque issued by the applicant. Even if it is assumed that it was a security cheque issued by the applicant, by issuing the security cheque the drawer authorizes the drawee of the cheque to make necessary alternations to carry out the common intentions of the parties in terms of Section 87 of the N.I. Act. Thereby, by issuing the security cheque, he assures the drawee of the cheque that in case of any default on his part, the said cheque can be presented for the remaining liability. The issuance of cheque has not been denied by the learned counsel for the applicant. In view thereof, the presumption under Section 139 of the N.I. Act shall come into play against the applicant herein. Thereby, a prima facie case is made out against the applicant. A question whether there was any existing liability or not is a subject matter of trial and it is open for the applicant to rebut the presumption during the trial of the case to establish by leading the cogent evidence that there was no liability on his part towards the opposite party no.2. 11. In view thereof, this Court does not find any merit in the submissions made learned counsel for the applicant and the instant application is accordingly dismissed. Order Date :- 12.9.2024 Shubham Arya (Anish Kumar Gupta, J.)