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2017 (12) TMI 393 - HC - Indian LawsDishonour of the cheque - complaint under 138 of the Negotiable Instruments Act, 1881 - accrual of cause of action -Held that:- While interpreting word “cause of action” under section 142 of the Negotiable Instruments Act in relation to the commission of an offence or the institution of a complaint, reading of section 138 and 142 of the Negotiable Instruments Act makes it abundantly clear that the cause of action to institute a complaint comprises the three different factual prerequisites. It was further held that right of the holder to present the cheque for encashment carries with it a corresponding obligation on the part of the drawer. The omission or the failure of the holder to institute prosecution does not, therefore, give any immunity to the drawer so long as the cheque is dishonoured within its validity period and the conditions precedent for prosecution in terms of the proviso to Section 138 are satisfied. It was further held that so long as the cheque is valid and so long as it is dishonoured upon presentation to the bank, the holder’s right to prosecute the drawer for the default committed by him remains valid and exercisable. By reason of a fresh presentation of a cheque followed by a fresh notice in terms of section 138 proviso clause (b), the drawer gets an extended period to make the payment and thereby benefits in terms of further opportunity to pay to avoid prosecution. Such fresh opportunity cannot help the defaulter on any juristic principle, to get a complete absolution from prosecution.
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