Cheque presented more than once and dishonoured – cause of action

[Anonymous]

The Payee of a Cheque of Rs. 5,00,000/- bounced the cheque on 21-04-2014 and again got it bounced on 19-05-2014. He sent a Demand Notice U/s 138 on 20-05-14 (just one day after 2nd bouncing) informing dishonour dated 21-04-2014 (1st dishonour) & demanding payment thereof within the statutory period of 15 days.

My question is: —–>

(1) When does the cause of action to file a case unde the N.I. Act arise? Upon the 1st dishonour or upon the 2nd dishonour?

(2) Can the payee file a case for the 1st dishonour dtd. 21-04-2014, when he had bounced it for the second time as well on 19-05-14 or he should have filed case for the 2nd dishonour instead of the 1st dishonour?

(3) Can the accused get any relief for this act of the payee?

N.B. – The payee has filed case for the dishonour of the cheque dtd 21-04-14 and not for the dishonour of the cheque dtd 19-05-14. Moreover, the payee has sent Demand Notice U/s 138 only for the 1st dishnour & not for the 2nd dishonour.

[Dr. Ashok Dhamija]

The question raised by you appears to be covered in the judgment of Calcutta High Court in the case of Sekhar Gupta v. Subhas Chandra Mondal, (1992) (Supp) MWN (Cri) 152 (Cal), the relevant extract of which is reproduced below:

“5. First let me consider whether the instant case under Section 138 of the N.I Act is maintainable or not. In challenging the maintainability of the instant case, Mr. Deb learned advocate appearing for the petitioners has argued that the cheque No. 018455 dated 10 September, 1989 and the cheque No. 018456 dated 20 September, 1989 were presented to the bank for payment respectively on 10 September’89 and 22 September, 1989 and that the bank’s intimation in this regard were given to the payee i.e the complainant-opposite party on 12 September, 1989 in respect of the cheque No. 018455 dated 10 September, 1989 and on 23 September, 1989 in respect of the other cheque. He has argued that since the notice in writing demanding payment of the amount of the said dishonoured cheques was not given within fifteen days of the receipt of the information by the complainant-opposite party from the bank regarding the return of the cheques as unpaid, as required under Section 138 (b) of the N.I Act, the instant case is not maintainable. He has submitted that subsequent presentation and dishonour of the cheques on such presentation, the said period of limitation cannot be saved or extended. Mr. Pal learned advocate for the opposite party has, on the other hand, argued that though the cheques in question bounced on first presentation to the bank for payment, still at the request of the accused persons and to give them an opportunity to pay the amounts, the said cheques were presented to the bank for the second time and also for the third time. He has further argued that as the cheques bounced on third presentation to the bank for payment on 16 Nov.’ 89 and 9 Nov. 1989 well within the period of this validity, the complainant issued the notice in writing under Section 138 (b) of the N.I Act within fifteen days from the dates of receipt of the bank’s intimations as to non-payment of cheques which were received on 17 November, 1989 and 10 November, 1989. As the said notice under Section 138 (b) of the N.I Act was issued within the fifteen days from the aforesaid dates of receipt of banks intimation, he has further argued that the notice under Section 138 (b) is valid and legal and that the instant proceeding is maintainable. Having heard the submission made on both sides and having considered the materials on record and also the provision of section 138 of the N.I Act, I am of the opinion that in the facts and circumstances of the case, the notice issued on 18 November, 1989 under section 138 (b) of the N.I Act and received by the accused persons on 22 November, 1989 is a valid and legal notice and that the instant proceeding, therefore, is maintainable. To invoke the provision of S. 138 of the N.I Act, the payee or the holder in due course shall have to present the cheque for payment to the bank within a period of six months from the date on which it was drawn or within the period of its validity whichever is earlier as enjoined by clause (a) of Section 138 of the N.I Act. In the instant case the cheques were valid for six months from the dates when they were drawn and as such the period of their validity was six months from the date when they were drawn. Section 138 enjoins that the cheque must be presented to the bank within a period of six months or within the period of its validity whichever is earlier. It does not prohibit or forbid presentation of the cheque to the bank more than once for payment. Nor does it enjoin that such cheque should be presented to the bank for payment only once. So, I am of the opinion that the cheque may be presented to the bank for payment twice or thrice within the aforesaid period of six months or the period of its validity and it cannot be presented to the bank for payment beyond the said period of six months or the period of validity. Of course, when the cheque is presented to the bank for the first time for payment and is returned unpaid, it gives rise to a right in favour of the payee or the holder in due course to initiate a criminal proceeding under section 138 of the N.I Act against the drawer of the cheque. On such first presentation for payment and dishonour of the cheque on such presentation, the payee or the holder in the due course undoubtedly could have enforced his right against the drawer of the cheque. But when he waits and presents the cheque for the second or for the third time, he does so far the benefit of the drawer in order to give an opportunity to him to pay or deposit the amount of the cheque in the bank. But there can be no manner of doubt that when the payee or the holder in due course after the cheque had bounced on first presentation presents the cheque for the second time to the bank for payment, he must be held to have waived the right that had accrued in his favour when the cheque bounced on first presentation. Similarly when the payee or the holder in due course even after the cheque had been dishonoured for the second time presents the cheque to the bank for payment for the third time but within the period of six months from the date of drawal of the cheque or within the period of its validity, the payee or the holder in due course must be held to have waived the right that accrued in his favour when the cheques bounced for second time. In the instant case the cheques were presented to the bank for payment for the third time well within the period of six months from the dates when they were drawn and they were returned unpaid this time also. On such dishonour of the cheque after they had been presented for payment within the period of six months from the dates when they were drawn, a fresh right accrued in favour of the complainant-opposite party and he can certainly enforce that right by initiating a proceeding under Section 138 of the N.I Act. The bank’s intimations in this regard in respect of the cheques in question were received on 10 Nov.’ 89 and 17 November 1989. The notice in writing demanding payment of money under clause (b) of Section 138 of the N.I Act, was given on 18 November 1989 and the same appears to have been received by the accused persons on 22 November 1989. So the said notice appears to be valid and legal. In that view of the matter the instant case under Section 138 of the N.I Act appears to be maintainable. So, the first contention as raised on behalf of the petitioners fails.”

     

---

Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

[Author]

Posts