Manivannan vs Ever King Garments

Pratap Singh J.

The accused in C.C. No. 6 of 1993 on the file of the Juridical Magistrate, No. II, Tiruppur, u/s 482 of the Criminal Procedure Code, 1973, has

filed this petition, praying to call for the records in the above case and to quash the same.

The short facts are : The respondent has filed the complaint against the petitioner for an offence punishable u/s 138 of the Negotiable

Instruments Act, 1881 (hereinafter referred to as ""the Act""). The allegations in it are briefly as follows : The complainant is doing hosiery business

under the name and style of ""Ever King Garments"". He is one of the partners of the firm. The accused had been doing business with the

complainant by way of purchasing hosiery goods. For the goods supplied to the accused, the accused had issued a cheque on August 5, 1992, for

Rs. 6,420 in favour of the complainant. On August 20, 1992, the accused had issued another cheque in favour of this complainant. On August 25,

1992, and September 7, 1992, the accused had issued another two cheques for Rs. 5,000 and Rs. 7,245, respectively. When the above cheques

were presented before the proper bank on various dates for collection in the Catholic Syrian Bank, Tiruppur, the cheques were dishonoured as

there were no sufficient funds. The complainant informed the accused about the return of the cheques. The accused apologised and requested the

complainant to present the cheques once again in the last week of November. Accordingly, the complainant presented the cheques on November

26, 1992, and they were once again dishonoured and returned to the complainant with an endorsement that there were no sufficient funds. The

complainant issued a registered notice on December 3, 1992, and the accused sent a reply on December 7, 1992. He did not make any

arrangements for the payment of the amounts due under the cheques to the complainant. Hence the complaint.

Mr. V. Raghavachari, learned counsel appearing for the petitioner, would submit that (1) the notice issued by the complainant on December 3,

1992, is defective in the sense that only three day''s time was given in it for payment of the amount; (2) the cause of action arose only in

Pondicherry and the court, Tiruppur, has no jurisdiction to try the case; and (3) the first presentation alone would give rise the cause of action and

the second presentation of the cheque would not give rise to a cause of action and this complaint laid on the basis of the second presentation and

the return of the cheque on the ground of ""insufficiency of funds"" is not maintainable.

I have carefully considered the submission made by Mr. V. Raghavachari, learned counsel for the petitioner. I shall consider them seriatim.

Regarding the first submission, the relevant portion in the statutory notice is extracted as follows :

Therefore, this is to call upon you to pay the entire amount as mentioned above with 24 per cent interest per annum within three days from the

date of this notice, otherwise, may client has to take action in criminal court, for which you are responsible for the costs and consequences

thereon.

Presently, I shall refer to the relevant clauses (b) and (c) of the proviso to section 138 of the Act which read as follows :

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by

giving a notice in writing to the drawer of the cheque, within fifteen days of the receipt of the information by him from the bank regarding the nature

of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due

course of the cheque, within fifteen days of the receipt of the said notice.

Section 142(b) of the Act is also relevant and it reads as follows :

Cognizance of offences. - ....... (b) Such complaint is made within one month of the date on which the cause of action arises under clause (c) of

the proviso to section 138.

A conjoint reading of clause (c) of the proviso to section 138 of the Act and clause (b) of section 142 of the Act would show that the cause of

action would arise on failure on the part of the drawer to pay the amount within 15 days of the receipt of the said notice. Nowhere is it

contemplated that the notice issued by the payee of the said cheques should prescribe the period of 15 days. All that has been made obligatory is

that the payee of the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by

giving a notice in writing to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of

the cheque as unpaid. Neither clause (c) to section 138 nor clause (b) to section 142 of the Act prescribes that the notice sent by the payee or the

holder in due course must specifically state that fifteen days time is given. So, I am clear that the first submission made by Mr. V. Raghavachari,

learned counsel for the petitioner, cannot hold good and hence I am not accepting the same.

Mr. V. Raghavachari, learned counsel would submit that section 106 of the Transfer of property Act prescribes a period of fifteen days for

notice to quit in order to determine a monthly tenancy and if the days fall short of fifteen days, courts have held that the notice to quit was not valid

in law and so the claim for ejectment would fail and that the same position must prevail in this case also. The language of section 106 of the

Transfer of Property Act and the language of sections 138 and 142 of the Negotiable Instruments Act are different. So, the rulings concerned in

section 106 of the Transfer of Property Act cannot be applied to this case.

The second submission by Mr. V. Raghavachari, learned counsel, is that the cause of action arose only in Pondicherry and the court of Tiruppur

does not have jurisdiction to try the case. Here again, I have to refer to clause (b) of the proviso to section 138 of the Act. The primary portion of

section 138 gives out the circumstances when an offence u/s 138 of the Act is committed. The proviso contains three clauses which are required

and which if in existence allow and enable a person to file a complaint for an offence u/s 138 of the Act. Clause (d) would state that the payee or

the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in

writing to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as

unpaid. Thus, one of the essential requirements for making out an offence is that he should send a notice within 15 days of the receipt of

information by him from the bank regarding the return of the cheque as unpaid. In the instant case, the complainant is at Tiruppur. He had

presented the cheques for encashment through the ""Catholic Syrian Bank"", and the receipt of the information regarding the return of the cheques

would be at Tiruppur. Since one of the essential ingredients which makes out the offence had arisen at Tiruppur, the learned Magistrate at Tiruppur

has got jurisdiction to try the case. Taking that view of the matter. I am unable to accept the submission of learned counsel for the petitioner.

Regarding the third point, this court has already held that even if the cheques were presented for the second time and returned with an

endorsement ""insufficiency of funds"" still an offence u/s 138 of the Act is made out. Learned counsel would rely upon the decision of the Kerala

High Court in N. C. Kumaresan v. Ameerappa, [1992] (Suppl.) MWN (Cri.) 8; [1992] 74 Comp Cas 848. In it, the Kerala High Court has

taken a contrary view. But I do not find any reason to disagree with the view which had been already expressed by this court. The second

presentation also will give rise to a cause of action and will make out an offence. Hence, I am unable to accept either this submission.

In view of the above, this petition fails and shall stand dismissed.