TMI Blog2022 (2) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case. The judgment in MSR Leathers V.S. Palaniappan and another [ 2012 (10) TMI 232 - SUPREME COURT ] deals with the case where the cheque was returned for the reason not arranged funds for . We have the case where the cheque was returned for the reason account closed . The aforesaid judgments relied by the counsel appearing for the respondent do not deal with the situation where a cheque was presented again, when the earlier presentation was dishonoured on the ground account closed . In the case before hand, the first presentation of cheque and return on the ground of account closed was not even mentioned in the statutory notice and the complaint and it was not informed to the petitioner and petitioner had never asked the respondent to represent the cheque again. In the case before hand the cheque was returned for the reason that account closed on 03.02.2016 when it was presented for the first time on 02.02.2016. Suppressing this return, cheque was presented again on 28.03.2016 and it was again returned for the same reason account closed . It is palpably clear that second presentation was made only to bring the case within a period of limitation. There is no l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2016. Petitioner gave a suitable reply on 10.05.2016 and this complaint came to be filed on 13.05.2016. 5. It is further submitted that when a cheque was returned on 03.02.2016 for the reason account closed , the respondent ought to have issued legal notice within 30 days from the date of receipt of memo from the Bank. That was not done in this case. Having failed to give statutory notice within the stipulated period, the respondent again presented the case on 28.03.2016 for the purpose of savings the limitation. The second presentation after the return of the cheque on the ground account closed is illegal and it was made only for the purpose of saving limitation and therefore this case has to be quashed. 6. In support of the case, the learned counsel for the petitioner has relied on the following judgments:- (i) (1999) 4 Supreme Court Cases 253 [NEPC MICON LTD. and others Vs. MAGMA LEASING LTD] it has been held that: The return of a cheque by the bank unpaid on the ground that the account is closed would mean that the cheque is returned as unpaid on the ground that the amount of money standing to the credit of that account is insufficient to honour the cheque . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has relied on the following judgments. (i) 2010 4 Crime (HC) 143 [R. Basant and M.C. Hari Rani. II Devan Vs. Krishna Menon] it has been held that: 39. It is contended with the help of the decision of the Karnataka High Court in Nanjundappa V. Hanumantharayappa, that when the dishonour is on the ground of account closed and the signature differs , the period of limitation must start running from the date of initial presentation. Subsequent presentation cannot give a renewed lease of life for the cause of action, contends the learned counsel. 40. We have gone through the decision in Sadanandan Bhadran V. Madhavan Sunil Kumar, which has clearly held that successive presentation within the permissible period of time is justified and can be resorted to. The cause of action for prosecution can arise only when a notice of demand is issued. Till then within the period permitted by Section 138 of the Negotiable Instruments Act, any number of representations can be done. We are unable to accept the general statement made in Nanjundappa (supra) that in such a case the prosecution must be held to be barred by limitation, if notice of demand is not given within the stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on subsequent or successive dishonour is impermissible, we need only mention that the limitation which Sadanandan Bhadran case reads into that provision does not appear to us to arise. We say so because while a complaint based on a default and notice to pay must be filed within a period of one month from the date the cause of action accrues, which implies the date on which the period of 15 days granted to the drawer to arrange the payment expires, there is nothing in Section 142 to suggest that expiry of any such limitation would absolve him of his criminal liability should the cheque continue to get dishonoured by the bank on subsequent presentations. 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. The argument that the holder takes advantage by not filing a prosecution against the drawer has not impressed us. 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 opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since Section 138 cannot be applied in isolation ignoring Section 139 which envisages a right of rebuttal before an offence could be made out under Section 138 of the Act as the legislature already incorporates the expression unless the contrary is proved which means that the presumption of law shall stand and unless it is rebutted or disproved, the holder of a cheque shall be presumed to have received the cheque of the nature referred to in Section 138 of the NI Act, for the discharge of a debt or other liability. Hence, unless the contrary is proved, the presumption shall be made that the holder of a negotiable instrument is holder in due course . 9. In reply, the learned counsel for the petitioner submitted that apart from the return of the cheque for the reason account closed , the specific case of the petitioner is that she had lost the cheque along with other records. A paper publication was given in this regard on 25.01.2016 followed by a police complaint on 28.09.2016. On receiving, the notice dated 26.04.2016, petitioner sent a detailed reply dated 10.05.2016 denying the allegations made in the notice and also explaining her case. Suppressing the earlier presentatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... echem V. State of Gujarat and others] that the reasons for dishonour of cheque as account closed , payment stopped , referred to drawer are only species of the genus that the amount of money available in the account is insufficient. Therefore, these grounds for return would constitute a dishonour within the meaning of Section 138 of the Act. 15. The judgment reported in 2013 10 SCC 568 [MSR Leathers V.S. Palaniappan and another] is relied upon for the proposition that a cheque may be presented again, after its dishonour. It is no doubt, a cheque may be presented second time. Validity of second presentation depends on facts and circumstances of the case. The aforesaid judgment deals with the case where the cheque was returned for the reason not arranged funds for . We have the case where the cheque was returned for the reason account closed . The aforesaid judgments relied by the counsel appearing for the respondent do not deal with the situation where a cheque was presented again, when the earlier presentation was dishonoured on the ground account closed . 16. There is an observation in the judgment reported in 2010 (4) Crime HC 143 that the Court has not accepted the ..... 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