TMI Blog2001 (7) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... eed not snowball into a cause of action. Its corollary is that the payee was not prevented from presenting the cheque once again within the permitted period and to make use of such presentation and the subsequent dishonour for a cause of action to be founded for launching a complaint as in the present case. - CRIMINAL APPEAL NO. 721 OF 2001 - - - Dated:- 17-7-2001 - K.T. THOMAS AND R.P. SETHI, JJ. Ashwini Kumar and Binu Tamta for the Appellants. Ashish Dholakia, Ajay Bhargava and Ms. Suman Jyoti Khaitan for the Respondents. JUDGMENT Thomas, J. - The drawer of a cheque clutches on a straw for wriggling out of the clinch of a criminal prosecution he is caught in, but the straw is too fragile to be of any help to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expiry of 15 days after the said notice and hence he cannot create one more cause of action by presenting the cheque once again. At any rate the complaint filed on 11-4-1996 is beyond the time prescribed by law and consequently the court is debarred from taking cognizance of the offence upon the said complaint, contended the appellants. In support of the said contention appellants cited the decisions of this Court in Sadanandan Bhadran v. Madhavan Sunil Kumar [1998] 6 SCC 514. 5. The trial court repelled the said contention on the premise that the notice issued on 1-12-1995 was under section 434 of the Companies Act which cannot be treated as a notice under section 138. This position of the trial court was upheld by the learned sing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 434 has to be read in association with section 433( a ). Clause ( e ) of section 433 contains one of the six clauses for which the company can be wound up by the court, i.e., if the company is unable to pay its debts . Section 434 contains the two instances when a company is deemed to be unable to pay its debts. Section 434 is extracted below : " Company when deemed unable to pay its debts. (1) A company shall be deemed to be unable to pay its debts ( a )if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntext: "( 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 information by him from the bank regarding the return of the cheque as unpaid." 9. If any notice is issued under section 434 within 15 days of the information from the Bank regarding return of the cheque drawn by a company as unpaid, such a notice would as well be good enough under clause ( b ) of the proviso to section 138. This Court has held in Sadanandan Bhadran s case ( supra ) that a complainant cannot create successive causes of action with the same cheque. If no complaint is filed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 567. 10. One of the indispensable factors to form the cause of action envisaged in section 138 is contained in clause ( b ) of the proviso to that section. It involves the making of a demand by giving a notice in writing to the drawer of the cheque within fifteen days of receipt of information by him from the bank regarding the return of the cheque as unpaid. If no such notice is given within the said period of 15 days no cause of action could have been created at all. Thus, it is well neigh settled that if dishonour of a cheque has once snowballed into a cause of action it is not permissible for a payee to create another cause of action with the same cheque. The question in this case is, did the payee issue notice within 15 days a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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