Court can take cognizance of complaint for ‘cheque bounce’ on Notice Pursuant To ‘Re-Presentation’ of Cheque

Sri Gadadhar Barik Vs Sri Pradeep Kumar Jena and another (Orissa High Court)

Supreme Court in M/s. Sicagen India Ltd. Vrs. Mahindra Vadideni and Others (Criminal Appeal Nos.26-27 of 2019) decided on ₈th January, 2019, wherein, held that even a second statutory notice after re-representation of cheque is maintainable in law. In fact, the issue before the Supreme Court was, whether, a criminal complaint based on a subsequent or successive statutory notice filed under Section 138 of the N.I. Act is maintainable. In the decision (supra), the Supreme Court observed that such an issue is no longer res integra and referred to one of its earlier judgment in Sadanandan Bhadran Vrs. Madhavan Sunil Kumar (decided on 28^th August, 1998), where it was held to the extent that second and successive presentation of a cheque is legally permissible as long as it is within six months or validity of the cheque, whichever is earlier. In M/s. Sicagen India Ltd. (supra), it has been observed that the correctness of the above mentioned case in Sadanandan was doubted and referred by the Supreme Court to a larger Bench in Leathers Vrs. S. Palaniappan and Another reported in (2013) 1 SCC 177, wherein, it was reiterated that no prohibition exists against subsequent presentation of cheque and institution of a criminal complaint based on the dishonour of the same. In Leathers case, the Supreme Court noted that a prosecution based on a second or successive default in payment of the cheque amount should not be impermissible simply because no prosecution based on the first default which was followed by statutory notice and a failure to pay had not been launched. It was further held therein that no real or qualitative difference exists between a case where default is committed and prosecution immediately launched and another, where the prosecution is deferred till the cheque presented again gets dishonoured for the second or successive time. The purport and object of the N.I. Act has been discussed by the Supreme Court in M/s. Sicagen India Ltd. referring to Leathers case observing that if the entire purpose underlined Section 138 of the N.I. Act is to compel the drawers to honour their commitments made in course of business or other transactions, there is no reason why a person who has issued a cheque which is dishonoured and who failed to make payment despite statutory notice served upon him should be immune to prosecution simply because the holder of the cheque had not rushed to the court with a complaint based on such default or for the reason that the drawer has made the holder defer prosecution promising to make arrangements for funds or on account of any other similar situation. The Supreme Court, apart from the above decisions, referred to the cases in Mosaraf Hossain Khan Vrs. Bhagheeratha Engineering Ltd: (2006) 3 SCC 658 ; C.C. Alavi Haji Vrs. Palapetty Muhammed: (2007) 6 SCC 555; Damodar S. Prabhu Vrs. Sayed Babalall H: (2010) 5 SCC 663; and New India Sugar Mills Ltd. Vrs. CST: 1963 AIR SC 1207 and concluded that such a criminal action on a subsequent statutory notice or a notice sent for the first time after dishonour of cheque previously for which prosecution was not launched on the promise of the accused to make arrangement for funds, a complaint cannot be held as not maintainable. Being conscious of the above settled position of law, the Court in the present case finds that OP No.1 did not send any statutory notice after the cheque was dishonoured in the month of May, 2010 but once again presented it within the validity period of the cheque and thereafter, issued the statutory notice as required under law and under such circumstances, it cannot be said that the complaint is invalid. With the above conclusion, the Court holds that the contention of the petitioner vis-à-vis maintainability of the complaint on the ground raised is misconceived and therefore, cannot be sustained.

FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT

1. The petitioner has approached this Court by invoking jurisdiction under Section 482 Cr.P.C. assailing legality and judicial propriety of order of cognizance dated 2^nd February 2011 (Annexure-3) passed in I.C.C. No.427 of 2010 by the learned D.J.M., Khurda on the grounds inter alia that it is not sustainable in law and therefore, liable to be quashed.

Please become a Premium member. If you are already a Premium member, login here to access the full content.