TMI Blog2014 (10) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... Byrareddy, J. For the Appellant : Shri. Nagaiah, Advocate. For the Respondent : By Shri. S.S. Mahendra, Advocate. JUDGMENT This is a complainant s appeal. The complainant had alleged that the respondent had committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881, (Hereinafter referred to as the NI Act , for brevity) The complainant was said to be a tenant under the respondent. It is stated that he had paid a security deposit under the lease agreement. This sum of Rs.2.50 lakh was said to have been refunded by the respondent after deducting Rs.8,000/-, by way of a cheque dated 22.2.2007. The cheque having been dishonoured on being presented for collection and when the respondent failed to make payment against a demand made in terms of Section 138 of the NI Act, the complaint came to be filed. 2. In the proceedings before the Magistrate, though the accused had entered appearance, the matter was not contested. In that, the complainant was not cross-examined to test his evidence by way of his examination-in-chief, nor did the accused tender any evidence in spite of opportunity. The case of the complainant was therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the respondent seeks to draw attention to the following passages to contend that though the decision in Sadanandan Bhadran v. Madhavan Sunil Kumar (1998) 6 SCC 514, was overruled in the case of MSR Leathers v. S. Palaniappan (2013 ) 1 SCC 177, the highlighted portion of the observations hereunder, according to the counsel for the respondent, restore the legal position as spelt out by Sadanandan Bhadran. 28. We may at this stage refer to two other decisions of this Court which bear some relevance to the question that falls for our determination. In Sadanandan Bhadran v. Madhavan Sunil Kumar (1998) 6 SCC 514 a two-judge bench of this Court held that clause (a) of proviso to Section 138 does not disentitle the payee to successively present cheque for payment during the period of its validity. On each such presentation of the cheque and its dishonour a fresh right - and not cause of action - accrues in his favour. He may, therefore, without taking pre-emptory action in exercise of such right under clause (b) of Section 138 go on presenting the cheque so long as the cheque is valid for payment. But once he gives a notice under clause (b) of Section 138 he forfeits such right f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is returned unpaid; and (iii) that the drawer should have failed to pay the amount within 15 days of the receipt of the notice. It is only when all the above three conditions are satisfied that a prosecution can be launched for the offence under Section 138. So far as the first condition is concerned, clause (a) of the proviso to Section 138 does not put any embargo upon the payee to successively present a dishonoured cheque during the period of its validity. This apart, in the course of business transactions it is not uncommon for a cheque being returned due to insufficient funds or similar such reasons and being presented again by the payee after sometime, on his own volition or at the request of the drawer, in expectation that it would be encashed. Needless to say, the primary interest of the payee is to get his money and not prosecution of the drawer, recourse to which, normally, is taken out of compulsion and not choice. For the above reasons it must be held that a cheque can be presented any number of times during the period of its validity. Indeed that is also the consistent view of all the High Courts except that of the Division Bench of the Kerala High Court in Kumaresan1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, be interpreted strictly, for it is one of the accepted rules of interpretation that in a penal statute, the Courts would hesitate to ascribe a meaning, broader than what the phrase would ordinarily bear. Section 138 is in two parts. The enacting part of the provision makes it abundantly clear that what constitutes an offence punishable with imprisonment and/or fine is the dishonour of a cheque for insufficiency of funds etc. in the account maintained by the drawer with a bank for discharge of a debt or other liability whether in full or part. The language used in the provision is unambiguous and the ingredients of the offence clearly discernible viz. (a) Cheque is drawn by the accused on an account maintained by him with a banker. (b) The cheque amount is in discharge of a debt or liability and (c) The cheque is returned unpaid for insufficiency of funds or that the amount exceeds the arrangement made with the bank. But for the proviso that comprises the second part of the provision, any dishonour falling within the four corners of the enacting provision would be punishable without much ado. The proviso, however, draws an exception to the generality of the enacting part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complainant. The proviso in that sense, simply postpones the actual prosecution of the offender till such time he fails to pay the amount within the statutory period prescribed for such payment. There is, in our opinion, a plausible reason why this was done. The Parliament in its wisdom considered it just and proper to give to the drawer of a dishonoured cheque an opportunity to pay up the amount, before permitting his prosecution no matter the offence is complete, the moment the cheque was dishonoured. The law has to that extent granted a concession and prescribed a scheme under which dishonour need not necessarily lead to penal consequence if the drawer makes amends by making payment within the time stipulated once the dishonour is notified to him. Payment of the cheque amount within the stipulated period will in such cases diffuse the element of criminality that Section 138 attributes to dishonour by way of a legal fiction implicit in the use of the words shall be deemed to have committed an offence. The drawer would by such payment stand absolved by the penal consequences of dishonour. This scheme may be unique to Section 138 NI Act, but there is hardly any doubt that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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