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M/s.Cotex v/s State of Maharashtra & Another


Company & Directors' Information:- H N COTEX PRIVATE LIMITED [Active] CIN = U17120GJ2013PTC075910

Company & Directors' Information:- N B COTEX PRIVATE LIMITED [Active] CIN = U17200MH2011PTC219248

Company & Directors' Information:- S K COTEX LIMITED [Active] CIN = U17231HR1994PLC032315

Company & Directors' Information:- K. S. COTEX (INDIA) PRIVATE LIMITED [Active] CIN = U17300MP2011PTC025847

Company & Directors' Information:- V. T. COTEX PRIVATE LIMITED [Active] CIN = U17120GJ2012PTC071478

Company & Directors' Information:- D K COTEX PRIVATE LIMITED [Strike Off] CIN = U17110MH2005PTC157107

Company & Directors' Information:- S B COTEX PRIVATE LIMITED [Active] CIN = U17300MP2009PTC022644

Company & Directors' Information:- R K COTEX PRIVATE LIMITED [Active] CIN = U17200DL2010PTC202564

    Criminal Application No.3088 of 2007

    Decided On, 18 February 2009

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE MR. JUSTICE A.S. OKA

    For the Appellant: A.H. Ponda, Advocate. For the Respondents: P.A. Pol, APP.



Judgment Text

1. I have heard detailed submissions made by the learned counsel appearing for the applicant. This is an application for grant of special leave to prefer an appeal under sub section 4 of section 378 of the Code of Criminal Procedure, 1973. The applicant is the complainant in a complaint filed under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the said Act of 1881"). By the impugned order the learned Magistrate has acquitted the second respondent (accused).


2. It will be necessary to refer to the facts of the case in brief. According to the case of the applicant, the second respondent is the proprietor of M/s.M.M.Knits Wears. As per the orders placed by the second respondent, the applicant sold and delivered cloth material to the second respondent having total value of Rs.14,77,717/-. Four cheques were issued by the second respondent for payment of the price of the goods sold. The said cheques were dishonoured and communication of dishonour was received by the applicant on 30th December 2005. A notice of demand was issued on 30th December 2005. The notice was received and was replied by letter dated 13th January 2006. As the demand was not complied with, the present complaint was filed.


3. A perusal of the impugned order passed by the learned Magistrate shows that the prior to the dishonour of the aforesaid cheques on the basis of which notice was issued on 30th December 2005, the said cheques were deposited by the applicant and were dishonoured. On the basis of the dishonoured cheques, earlier a communication at Exhibit-22 was issued by the applicant. By the said communication the second respondent was called upon to issue a single demand draft in the sum of Rs.14,77,717=50 ps. which is the amount payable under the four cheques. The said communication at Exhibit-22 was made by E-mail. The learned Judge held that the said communication at Exhibit-22 was a notice of demand as contemplated by clause (b) of proviso to Section 138 of the said Act of 1988. The said communication at Exhibit P-22 is dated 9th November 2000. The learned Judge relied upon the decision of the Apex Court in the case of Krishna Exports and others Vs. Raju Das ([2006]1-SCC [Cri]-350) and held that the complaint based on the second dishonour and second demand made on the basis of the second dishonour cannot be entertained. Therefore, he has passed an order of acquittal.


4. The learned counsel for the applicant submitted that the Apex Court in the case of Krishna Exports (supra) has followed its earlier decision in the case of Sadanandan Bhadran Vs. Madhavan Sunil Kumar (1998-SCC [Cri]-1471). He submitted that the decision in the case of Sadanandan (supra) is delivered 28th August 1998. He invited my attention to the proviso to clause (b) of section 142 of the said Act of 1881 inserted by amending Act No.55 of 2002 which was brought into force from 6th February 2003. He pointed out that prior to the said amendment, the Court did not have power to extend the period of limitation provided in clause (b) of section 142 of the said Act of 1881 and by virtue of said proviso which was brought in force with effect from 6th February 2003, now the Court has a power to extend the period of limitation provided in clause (b) of Section 142 of the said Act of 1881. He submitted that the Apex Court in the case of Sadanandan (supra) has held that the complaint filed after the second dishonour was not maintainable. He submitted that the said view is taken only on the ground that if the said complaint was entertained, the period of limitation provided under section 142 will be made otiose. He submitted that now with effect from 6th February 2003, the Court of the learned magistrate is empowered to extend the period of limitation and, therefore, the law laid down by the Apex Court in the case of Sadanandan (supra) will have no application to the complaints filed after 6th February 2003. He submitted that in the present case the objection regarding bar of limitation could not have been entertained in view of the decision of Division Bench of this court in case of State of Maharashtra vs. Vasant Shankar Mhasane and another (1993-Cri.L.J.-1134). He, therefore, submitted that the complaint filed by the applicant could not have been thrown out by the Trial Court on the basis of the law laid down by the Apex Court in the case of Sadanandan (supra) and Krishna Exports (supra). He submitted that the second deposit of the cheque was on the instructions of the 2nd accused.


5. I have carefully considered the submissions. As far as factual aspect is concerned, there is no dispute that the cheques subject matter of the complaint were dishonoured earlier and a demand was made by the applicant on 9th November 2000 by a communication at Exhibit-P-22. It is also not in dispute that the said demand is a demand within the meaning of clause (b) of section 138 of the said Act of 1881. There is no reference to the first dishonour and the said demand in the complaint and the complaint is based on subsequent dishonour of the same cheques and notice of demand issued on 30th December 2005. The complaint has been filed on 24th January 2006.


6. On plain reading of section 138 of the said Act of 1881 the cause of action for filing a complaint arises when the drawer of the cheque fails to make payment of the amount of money to the payee or to the holder in due course of the cheque within a period of fifteen days from the date of receipt of the notice of demand under clause (b) of section 138. The cause of action as pleaded in the present complaint is on the basis of subsequent dishonour and notice of demand dated 30th December 2005.


7. The submission of the learned counsel for the applicant is that only as per the instructions of the accused the cheques were redeposited. He submitted that on the basis of the first demand made in November 2005 a complaint could have been filed on 24th January 2006 by extending the period of limitation by exercising the power under the proviso to clause (b) of section 142 of the said Act of 1881 which was brought into force on 6th February 2003. His submission is that the law laid down in the case of Sadanandan (supra) will now be no longer applicable to the complaints filed after 6th February 2005.


8. It will be necessary to refer to what is held by the Apex Court in the case of Sadanandan (supra). Paragraphs 7 and 8 of the said decision read thus:-


"7. Besides the language of Sections 138 and 142 which clearly postulates only one cause of action, there are other formidable impediments which negate the concept of successive causes of action. One of them is that for dishonour of one cheque, there can be only one offence and such offence is committed by the drawer immediately on his failure to make the payment within fifteen days of the receipt of the notice served in accordance with clause (b) of the proviso to Section 138. That necessarily means that for similar failure after service of fresh notice on subsequent dishonour, the drawer cannot be liable for any offence nor can the first offence be treated as non est so as to give the payee a right to file a complaint treating the second offence as the first one. At that stage, it will not be a question of waiver of the right of the payee to prosecute the drawer but of absolution of the drawer of an offence, which stands already committed by him and which cannot be committed again by him again.


8. The other impediment to the acceptance of the concept of successive causes of action is that it till make the period of limitation under clause (c) of Section 142 otiose, for, a payee who failed to file his complaint within one month and thereby forfeited his right to prosecute the drawer, can circumvent the above limitative clause by filing a complaint on the basis of a fresh presentation of the cheque and its dishonour. Since in the interpretation of statutes, the court always presumes that the legislature inserted very part thereof for a purpose and the legislative intention is that every part should have effect, the above conclusion cannot be drawn for that will make the provision for limiting the period of making the complaint nugatory."


(Emphasis added)


The submission of the counsel for the applicant could have been accepted if the decision of the Apex Court was only on the ground incorporated in paragraph 8 of the said decision. Paragraph 8 of the said decision records that the what is mentioned therein is the other impediment in the way of entertaining such a complaint. The other impediment was that when the Apex Court decided the case before it, there was no provision under the said Act of 1881 for extending the period of limitation. Obviously, to the complaints filed after 6th February 2005, the law as amended will apply but the main reason given by the Apex Court is not the bar of limitation but it is the reason incorporated in paragraph 7 thereof. What has been held by the Apex Court is that sections 138 and 142 contemplate only one cause of action. The Apex Court held that for dishonour of one cheque there can be only one offence and the said offence is committed by the drawer immediately on his failure to make payment within fifteen days of the receipt of notice in terms of clause (b) of proviso to section 138. The Apex Court further observed that for similar failure after service of fresh notice on a subsequent dishonour, the drawer cannot be liable for any offence nor can the first offence be treated as non est so as to give the payee a right to file a complaint treating the second offence as the first one. The Apex Court held that the question is not of waiver of the right of the payee to prosecute the drawer but of absolution of the drawer of an offenc

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e which stands already committed by him and which cannot be committed by him again. In paragraph 9 of the said decision the Apex Court has reiterated that once the complainant gives notice on the basis of first dishonour, he forfeits the said right for in case of failure of the drawer to pay the money within the stipulated time after the service of second notice after second dishonour. 9. In view of what is held by the Apex Court in paragraph 7 in the case of Sadanandan (supra), merely because the statutory provision empowering the Court to extend the period of limitation is applicable to the present complaint, it cannot be said that the decision of the Apex Court will not apply. 10. In the circumstances, the learned Judge was right in holding that the complaint could not have been entertained. Hence, no case is made out for grant of special leave to prefer an appeal. The application is rejected. 11. It is made clear that the observations made in this order shall not be construed as any finding on the rights and liabilities of the parties.
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