TaxTMI 
TaxTMI 
2013 (1) TMI 979
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....After issuing the three cheques in favour of the Respondent, the Petitioner fraudulently instructed his Banker to "stop payment" in respect of the said cheques, since the Petitioner did not have sufficient funds in his account. When the earlier said cheques were presented, the same were dishonoured. The Respondent, therefore, issued a demand notice dated 24.05.2012 calling upon the Petitioner to make the payment of the cheque amount failing which the Respondent shall be compelled to initiate proceedings under Section 138 of the Negotiable Instruments Act, 1881 (the N.I.Act) and under Section 420 IPC. The payment having not been made within a period of 15 days of the receipt of the notice, the Respondent filed a complaint in the Court of MM on 05.07.2012. 3. It is urged by the learned counsel for the Petitioner that although the judgment of the Supreme Court in Sadanandan Bhadran v. Madhavan Sunil Kumar (1998) 6 SCC 514 has been overruled by a three Judge Bench decision of the Supreme Court in MSR Leathers v. S. Palaniappan & Anr. Criminal Appeal No.261-264 of 2002, decided on 26.09.2012 and it has been held that the holder of the cheque can defer prosecution when he expects the ....
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.... analyzed the provisions of Section 138 and 142 of the N.I.Act. It held that there was nothing in Section 138 or Section 142 of N.I. the Act to curtail the right of the payee on failure of the holder of the cheque to institute prosecution against the drawer when the cause of action to do so had first arisen. The Supreme Court held the payee or the holder of the cheque can defer prosecution till the cheque which is presented again gets dishonoured for the second or successive time. Paras 21 and 31 of the report are extracted hereunder:- "21. There is, in our view, nothing either in Section 138 or Section 142 to curtail the said right of the payee, leave alone a forfeiture of the said right for no better reason than the failure of the holder of the cheque to institute prosecution against the drawer when the cause of action to do so had first arisen. Simply because the prosecution for an offence under Section 138 must on the language of Section 142 be instituted within one month from the date of the failure of the drawer to make the payment does not in our view militate against the accrual of multiple causes of action to the holder of the cheque upon failure of the drawer to ....
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.... cause/causes of action so long as the cheque is re-presented and is dishonoured within a period of its validity, that is, subject to the outer limit of six months of when it is drawn. 9. It is admitted case of the parties that the three cheques dated 25.04.2012 were dishonoured on presentation. It is also not in dispute that the first notice dated 27.04.2012 was issued by the Respondent calling upon the Petitioner to make the payment of the loan amount of Rs. 60 lacs along with interest. Admittedly before issuance of the subsequent notice dated 24.05.2012 the cheques were neither presented again nor the same were dishonoured. The contention raised on behalf of the Respondent is that the handwritten notice dated 27.04.2012 sent earlier to the notice dated 24.05.2012 is not a notice as envisaged under Section 138 of the N.I.Act. Therefore, the same has to be ignored and since notice dated 24.05.2012 is within the stipulated period as laid down under Section 138 of the N.I.Act the complaint filed on 05.07.2012 is within the period of one month from the date when the cause of action arose. 10. There cannot be any gain saying that if the notice dated 27.04.2012 is held to be not ....
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....38 of the N.I. Act is that notice shall be given in writing within fifteen days of receipt of information from the bank regarding return of the cheque as unpaid and in the notice a demand for payment of the amount of the cheque has to be made. Paras 7 to 9 of the report in Saxons Farms are extracted hereunder:- "7. Though no form of notice is prescribed in the above clause (b) the requirement is that notice shall be given in writing within fifteen days of receipt of information from the bank regarding return of the cheque as unpaid and in the notice a demand for payment of the amount of the cheque has to be made. 8. The object of notice is to give a chance to the drawer of the cheque to rectify his omission and also to protect an honest drawer. Service of notice of demand in clause (b) of the proviso to Section 138 is a condition precedent for filing a complaint under Section 138 of the Act. In the present appeals there is no dispute that notices were in writing and these were sent within fifteen days of receipt of information by the appellant Bank regarding return of cheques as unpaid. Therefore, the only question to be examined is whether in the notice there was a demand for paym....
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....ly drawn on the Banks mentioned in the notice. It is further mentioned in the notice that the cheques have been returned due to „stopping of its payment‟ by the drawer, that is, the Petitioner. The Respondent called upon the Petitioner to pay the loan amount of Rs. 60 lacs (which was the cheque amount) along with interest. The Respondent further informed the Petitioner that on failure of making the payment plus interest, the Respondent would be obliged to take criminal and civil action against the Petitioner. 16. It is true that there is no specific mention of the provision of Section 138 of the N.I.Act in the notice. In my view, the same was not required. It has been laid down in Para 8 of the Saxons Farms (supra) that the object of notice is to give an opportunity to the drawer of the cheque to rectify his omission and also to protect an honest drawer. 17. The Petitioner was put to sufficient notice regarding dishonour of the three cheques and he was also called upon to make the payment of the three cheques. Of course, Section 138 of the N.I.Act does not envisage the payment of interest and even if interest is not paid, complaint under Section 138 of the N....