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        Companies Law

        2008 (10) TMI 600 - SC - Companies Law

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        Repeated cheque presentation within validity upheld, with successive notices not defeating a Negotiable Instruments Act complaint. A cheque governed by Section 138 of the Negotiable Instruments Act may be presented more than once within its validity period, because the statutory bar ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Repeated cheque presentation within validity upheld, with successive notices not defeating a Negotiable Instruments Act complaint.

                          A cheque governed by Section 138 of the Negotiable Instruments Act may be presented more than once within its validity period, because the statutory bar is only against presentation beyond that period. A complaint under Section 142 arises only after dishonour, valid notice, and failure to pay within the prescribed time. On the facts stated, the first two notices were ineffective, while the third presentation and third notice were within the permissible period. The Court therefore treated the repeated presentation and fresh notice as valid, upheld maintainability of the complaint, and rejected the challenge to cognizance.




                          Issues: Whether a cheque covered by Section 138 of the Negotiable Instruments Act, 1881 could be presented more than once within the period of validity, and whether successive notices and a third presentation could sustain the complaint and cognizance.

                          Analysis: The statutory scheme under Section 138 permits presentation of the cheque within six months or within its validity period, whichever is earlier, and the prohibition is against presentation beyond that period, not against repeated presentations within it. The cause of action for complaint under Section 142 arises only after dishonour, valid notice, and failure to pay within the stipulated time. On the facts, the first notice was not served, the second notice was also not effectively served and was objected to by the appellants themselves, and the third presentation occurred within the permissible period. The Court held that the complainant did not act illegally in presenting the cheque again and issuing a further notice, and that the earlier decisions relied upon did not assist the appellants on these facts.

                          Conclusion: The third presentation of the cheque and the third notice were valid, the complaint was maintainable, and the challenge to cognizance failed.

                          Final Conclusion: The complaint under the Negotiable Instruments Act was held to be maintainable on the facts, and the appellants obtained no relief.

                          Ratio Decidendi: A cheque may be presented multiple times within its validity period, and successive notices do not vitiate the prosecution where the statutory requirements for maintaining a complaint under Section 138 read with Section 142 are ultimately satisfied.


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                          ActsIncome Tax
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