MANU/JH/0737/2016

IN THE HIGH COURT OF JHARKHAND AT RANCHI

Cr. M.P. No. 893 of 2008
Decided On: 10.05.2016
Appellants: Raj Kumar Prasad
Vs.
Respondent: The State of Jharkhand and Ors.
Hon'ble Judges/Coram:
Ravi Nath Verma, J.
Counsels:
For Appellant/Petitioner/Plaintiff: R.A. Choubey, Advocate
For Respondents/Defendant: Shekhar Sinha, A.P.P.
Case Note:
Criminal - Initiation of proceedings - Quashing thereof - Section 138 of
Negotiable Instruments Act, 1881 - Present petition filed seeking quashing
of proceedings initiated under Section 138 of Act - Whether proceedings
were quashable - Held, there was absolutely nothing on record to show on
which date notice was served on drawer/Accused - There was no cause of
action for Complainant to lodge complaint and no cognizance of offence
could be taken on basis of such complaint - Order of cognizance taken by
Trial Court could not sustain in eye of law and upon such complaint, which
did not disclose cause of action - Petition allowed. [9]
JUDGMENT
Ravi Nath Verma, J.
1 . Invoking the inherent power of this Court under Section 482 of the Code of
Criminal Procedure (in short "the Code"), the petitioner has prayed for quashing of
the entire proceeding including the order taking cognizance dated 19.01.2007 passed
by Judicial Magistrate, 1st Class, Hazaribagh in Complaint Case No. 1342 of 2006,
whereby and whereunder the court below took cognizance of offence under Section
138 of N.I. Act (in short "the Act") and directed to issue summons.
2 . Bereft of unnecessary details, the facts, which is relevant for the proper
adjudication of the issue involved in this case, in short, is that at the instance of the
complainant Sri Krishna Prasad, the aforesaid case was filed against the present
petitioner under Section 138 of N.I. Act with the allegation that the accused-
petitioner being a friend and also a relative requested the complaint for a lone of Rs.
2,90,000/- and though the complainant was firstly hesitant in giving such a huge
amount but considering the personal difficulty of the accused gave Rs. 1,50,000/- on
20.10.2003 in cash and again paid Rs. 1,40,000/- on 31.01.2004 on the assurance of
the complainant that he will pay the entire amount as soon as possible. After
sometime, the complainant requested the accused to refund the money and in
pursuance to that, the accused issued a cheque of Rs. 2,90,000/- on 01.08.2006 with
the assurance that he has sufficient amount in his account but when the cheque was
presented in the Bank for encashment on 06.10.2006, it was dishonored showing

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 insufficient fund. The bank authorities returned the cheque with the said
endorsement. Whereafter, the complainant informed the accused about the dishonour
of the cheque but the accused refused to give reply on that. Thereafter, a legal notice
was sent to the accused on 02.11.2006 with a request to pay Rs. 2,90,000/- along
with interest.
3 . The court below after examining the complainant on solemn affirmation without
examining any other witnesses took cognizance of the offence vide order impugned
dated 19.01.2007. Aggrieved by that order, present case has been filed.
4 . Assailing the order impugned as bad in law and perverse and also against the
mandates of the Hon'ble Supreme Court, the learned counsel appearing for the
petitioner seriously contended that the court below even without considering that no
cause of action had arisen in this case took cognizance of the offence. It was also
submitted that though the legal notice was sent to the accused-petitioner on
02.11.2006 but it is nowhere mentioned in the entire complaint petition that when
the said notice was served upon or received by the petitioner or even refused and
without making any such averment, the complainant filed the complaint on
02.11.2006. It was also submitted that even if it be considered that the said notice
was issued on 02.11.2006, the cause of action to file complaint accrued only after
service of legal notice or refusal to accept notice and only after expiry of 30 days
from the date of issuance of legal notice as mandated in clause (b) of Section 142 of
the Act, the cause of action arose after 15 days as envisaged under clause (c) of the
proviso to Section 138 of the Act. It was also submitted that since nothing has been
brought on record to show when the notice was either received or served on the
petitioner, the entire proceeding under Section 138 of N.I. Act is vitiated because the
cause of action will start within 15 days from the date of receipt of the said notice. In
support of his submission, the learned counsel relied on the case D. Vinod Shivappa
Vs. Nanda Belliappa; MANU/SC/8187/2006 : (2006) 6 SCC 456 and Dalmia Cement
(Bharat) Ltd. Vs. Galaxy Traders & Agencies Ltd. and others; MANU/SC/1722/2001 :
(201) 6 SCC 463.
5. Contrary to the aforesaid submission, learned counsel Mr. Shikarwar representing
the opposite party No. 2 submitted that upon presentation of cheque and its
dishonour by the Bank, intimation was given to the accused by the complainant and a
cause of action had accrued and only thereafter the complainant filed this complaint
within 30 days from the date of issuance of legal notice. Hence, the court below has
rightly taken cognizance of offence and directed to issue summons.
6. Before I enter into the veils of submissions of learned counsels, I think it proper to
refer Section 138 and 142 of the Act, which defines the ingredients responsible to
constitute the offence and the punishment, which reads as follows:--
138. Dishonour of cheque for insufficiency, etc., of funds in the account.-
Where any cheque drawn by a person on an account maintained by him with
a banker for payment of any amount of money to another person from out of
that account for the discharge, in whole or in part, of any debt or other
liability, is returned by the bank unpaid, either because of the amount of
money standing to the credit of that account is insufficient to honour the
cheque or that it exceeds the amount arranged to be paid from that account
by an agreement made with that bank, such person shall be deemed to have
committed an offence and shall, without prejudice to any other provisions of
this Act, be punished with imprisonment for a term which may be extended

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 to two years, or with fine which may extend to twice the amount of the
cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a
period of six months from the date on which it is drawn or
within the period of its validity, whichever is earlier;
(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 thirty days of the receipt of
information by him from the bank regarding the return 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.
Explanation.-For the purposes of this section, debt or other liability'
means a legally enforceable debt or other liability."
142. Cognizance of offence.-Notwithstanding anything contained in the Code
of Criminal Procedure, 1973 (2 of 1974)-
(a) no court shall take cognizance of any offence punishable under
Section 138 except upon a complaint, in writing, made by the payee
or, as the case may be, the holder in due course of the cheque;
(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:
Provided that the cognizance of a complaint may be taken by
the court after the prescribed period, if the complainant
satisfies the court that he had sufficient cause for not
making a complaint within such period
(c) no court inferior to that of a Metropolitan Magistrate or a Judicial
Magistrate of the First Class shall try any offence punishable under
Section 138."
7. Section 138 of the Act comprises the main provision which defines the ingredients
of the offence and punishment that would follow in the event of such an offence
having been committed and the offence is made effective only on fulfilment of the
eventualities contained in clauses (a), (b) and (c) of the proviso. Mere issuance of
cheque and dishonour thereof would not constitute the offence under Section 138 of
the Act.
The complainant is obliged to prove the ingredients, which include the receipt of the
notice by the accused under clause (b). It is well settled that it is not "giving" of the
notice, which makes offence rather it is the "receipt" of the notice by the drawer,
which gives the cause of action to the complainant to file the complaint within the

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 statutory period. In the instant case, though a notice was sent to the petitioner on
02.11.2006 but there is no whisper in the entire complaint petition that when the said
notice was either served on the petitioner or returned because of any reason.
Admittedly, nothing has been brought on record to show whether the notice is
returned as unclaimed or refused or accepted and if that on which date. Even, it is
nowhere mentioned as to what was the mode of sending the notice whether it was
sent through registered post or by any other mode. Needless to say that the period of
one month for issuing the legal notice by the complaint will be reckoned from the
date immediately falling the day on which the information regarding the return of the
cheque as unpaid was given by bank authorities. If a notice is issued and served
upon the drawer of the cheque, no controversy arises. Similarly, if the notice is
refused by the drawer, it may be presumed to have been served. Undoubtedly, there
is a good authority to support the proposition that once the complainant, the payee of
the cheque, issues notice to the drawer of the cheque, the cause of action to file a
complaint arises on the expiry of period prescribed for payment by the drawer to the
cheque but as I have stated above, there is no averment to the effect that when the
notice was served or refused, in my opinion, there was no cause of action for filing a
complaint within prescribed period from the date of issuance of notice. In clause (c)
of the proviso (a) of Section 138 of N.I. Act, 15 days' time is granted to the drawer of
the cheque to make payment and unless this period elapses and no payment is made,
the drawer is not liable for any offence under Section 138 of the Act.
8. In the case Yogendra Pratap Singh Vs. Savitri Pandey & Anr. MANU/SC/0843/2014
: (2014) 10 SCC 713, almost a similar issues was considered and the Hon'ble
Supreme Court in paragraphs 35 and 36 has held as follows:-
35. Can an offence under Section 138 of the NI Act be said to have been
committed when the period provided in clause (c) of the proviso has not
expired? Section 2(d) of the Code defines "complaint". According to this
definition, complaint means any allegation made orally or in writing to a
Magistrate with a view to taking his action against a person who has
committed an offence. Commission of an offence is a sine qua non for filing
a complaint and for taking cognizance of such offence. A bare reading of the
provision contained in clause (c) of the proviso makes it clear that no
complaint can be filed for an offence under Section 138 of the NI Act unless
the period of 15 days has elapsed. Any complaint filed before the expiry of
15 days from the date on which the notice has been served on the
drawer/accused is no complaint at all in the eye of the law. It is not the
question of prematurity of the complaint where it is filed before the expiry of
15 days from the date on which notice has been served on him, it is no
complaint at all under law. As a matter of fact, Section 142 of the NI Act,
inter alia, creates a legal bar on the court from taking cognizance of an
offence under Section 138 except upon a written complaint. Since a
complaint filed under Section 138 of the NI Act before the expiry of 15 days
from the date on which the notice has been served on the drawer/accused is
no complaint in the eye of the law, obviously, no cognizance of an offence
can be taken on the basis of such complaint. Merely because at the time of
taking cognizance by the court, the period of 15 days has expired from the
date on which notice has been served on the drawer/accused, the court is not
clothed with the jurisdiction to take cognizance of an offence under Section
138 on a complaint filed before the expiry of 15 days from the date of receipt
of notice by the drawer of the cheque.

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 36. A complaint filed before the expiry of 15 days from the date on which
notice has been served on drawer/accused cannot be said to disclose the
cause of action in terms of clause (c) of the proviso to Section 138 and upon
such complaint which does not disclose the cause of action the court is not
competent to take cognizance. A conjoint reading of Section 138, which
defines as to when and under what circumstances an offence can be said to
have been committed, with Section 142(b) of the NI Act, that reiterates the
position of the point of time when the cause of action has arisen, leaves no
manner of doubt that no offence can be said to have been committed unless
and until the period of 15 days, as prescribed under clause (c) of the proviso
to Section 138, has, in fact, elapsed. Therefore, a court is barred in law from
taking cognizance of such complaint. It is not open to the court to take
cognizance of such a complaint merely because on the date of consideration
or taking cognizance thereof a period of 15 days from the date on which the
notice has been served on the drawer/accused has elapsed. We have no
doubt that all the five essential features of Section 138 of the NI Act, as
noted in the judgment of this Court in Kusum Ingots & Alloys Ltd. and which
we have approved, must be satisfied for a complaint to be filed under Section
138. If the period prescribed in clause (c) of the proviso to Section 138 has
not expired, there is no commission of an offence nor accrual of cause of
action for filing of complaint under Section 138 of the NI Act.
9 . In the instant case, since there is absolutely nothing on the record to show on
which date the notice was served on the drawer/accused then in view of the
mandates given in the above case, I am constrained to hold that there was no cause
of action for the complainant to lodge the complaint and no cognizance of offence
can be taken on the basis of such complaint. The order of cognizance taken by the
court below by the order impugned in view of the discussions made above cannot
sustain in the eye of law and upon such complaint, which does not disclose the cause
of action, the court is not competent to take cognizance.
1 0 . Accordingly, this criminal miscellaneous petition is allowed. The entire
proceeding of the court below and the order taking cognizance dated 19.01.2007 in
connection with Complaint Case No. 1342 of 2006 are, hereby, quashed.
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