Judgment:
ORDER
N.S. Veerabhadraiah, J.
1. The petitioner sought for quashing of the order of the learned Civil Judge and Judicial Magistrate of the First Class, Bellary in C.C. No. 167 of 2000 taking cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
2. The petitioner 1 issued a cheque in favour of the respondent for a sum of Rs. 4,00,000/- drawn on Vyshya Bank Limited, Main Branch, Bangalore Road, Bellary. The respondent presented the cheque for realisation of the amount and the same was bounced with an endorsement 'account closed'. Thereafter, the respondent issued a legal notice on 20-4-2000 and presented a complaint under Section 200 of the Cr. P.C. for taking cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act. The learned Principal Civil Judge and Judicial Magistrate of the First Class, Bellary, considering the materials on record held that the ingredients of Section 138 of the Negotiable Instruments Act are made out. Accordingly, he took cognizance of the offence punishable under Section 138 of the NI Act and registered a case. It is this order, which is now questioned in the present petition.
3. The learned Counsel Sri V.T. Rayaraddi for the petitioners, firstly contended that there is no valid notice issued as required under Section 138 of the NI Act. Secondly, contended that there is no dishonour of cheque as contemplated under Section 138 of the NI Act. Thirdly, contended that the complaint is filed beyond the period of limitation i.e., the cause of action arose on 17-4-2000, but the complaint ought to have filed within 17-5-2000 whereas the complaint came to be filed on 30-5-2000. Therefore, the complaint is barred by limitation. On these three grounds, the Counsel prayed to quash the proceedings.
4. The learned Counsel, Sri Code Nagaraj, for the respondent firstly contended that there is a valid notice and the Trial Court has also held that the registered notice sent was refused. Therefore, it is held that the notice issued is in accordance with law. Secondly, he contended that it is clear from the endorsement of the bank that the cheque came to be dishonoured and further submitted that even the endorsement issued shows 'account closed'. That means the cheque issued is with an intent to defraud the creditor. Therefore, it comes within the ingredients of Section 138 of the NI Act. Thirdly, he contended that the petition filed is within the period of limitation i.e., 30 days from the date of cause of action after excluding the period of 15 days.
5. In the light of the submissions, the short point for consideration that arise.
(1) Whether the endorsement 'account closed' gives rise to a meaning amounting to dishonour of cheque or the amount is insufficient to honour the cheque?
(2) Whether the cause of action arises from the date of dishonour of the cheque or after 15 days as is provided under Section 138, 138(b) and 138(c) of the NI Act?
6. In the case on hand, the Trial Court on examining the record has come to the conclusion that a notice has been duly issued and the acknowledgment has been returned with an endorsement that the addressee refused to receive the notice. This being a finding of fact, I do not want to interfere insofar as the question of issue of notice is concerned. The next point that has to be considered is whether the cheque in question has been dishonoured within the meaning of Section 138 of the Negotiable Instruments Act, 1881 (in short 'NI Act'). Section 138 of NI Act thus reads:
'Section 138.--Dishonour of cheque for insufficiency, etc., of funds in the account - Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence andshall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless:
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity; whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be; to the holder in due course of the cheque within 15 days of the receipt of the said notice'.
7. It is clear from the reading of this section that, where a cheque is drawn by a person on an account maintained by him with the banker is dishonoured on the ground that there is no sufficient amount in the account or etc., as the case may be, that amounts to dishonour of cheque for insufficiency of funds in that account. In the case on hand, it is an admitted fact, the petitioners issued a cheque dated 4-4-2000 for a sum of Rs. 4,00,000/- drawn on Vyshya Bank Limited, Bellary Koad, Bangalore and the same was dishonoured with an endorsement 'account closed'. It is manifest that as on the date of issuing cheque, the petitioners were aware of the fact that they were closing the account. But, they did not bring to the notice of the respondent regarding the closing of the account or any other subsequent acts. If the cheque came to be presented, and it was returned with an endorsement 'account closed' it amounts to dishonesty and it comes within the definition of Section 138 of the NI Act and thereby resulted in the dishonour of cheque. To add further, it can be said that the cheque was issued with an intention of defrauding the creditors. Therefore, the contention of the learned Counsel that the 'account closed' does not come within the ingredients of Section 138 of the NI Act cannot be accepted. It is clear from the meaning of Section 138 of the NI Act that if a cheque is issued and bounced, that gives rise to initiation of proceedings under Section 138 of the NI Act. Therefore, I do not find any infirmity in presenting a complaint for initiation of the action under Section 138 of the NI Act wherein the Court has taken cognizance in accordance with law.
8. Now, the only point for consideration is whether the complaint is filed beyond the period of limitation and thereby the complaint is liable to be dismissed. Section 142 of the NI Act reads thus:
'Section 142. Cognizance of offences.--Notwithstanding anything contained in the Cr. P.C.,
(a) no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint, is made within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138;
(c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class shall try any offence punishable under Section 138'.
9. Section 142(b) of the NI Act has to be read along with Section 138 of the NI Act thereby it makes clear that 15 days notice has to be excluded from the date of issue of notice. In the case on hand, the cheque came to be bounced on 17-4-2000 wherein it came to be filed on 30-5-2000, The complaint is well-within the period of limitation as provided under Section 142 of the NI Act which is supported by the decision in 1995 Cri. L.J. 1904 (Kar.) wherein this Court has held, cause of action arose only after expiry of period of 15 days. In that view of the matter, the contention of the learned Counsel for the respondent that the complaint is barred by limitation is also without any merits.
(emphasis supplied)
10. For the foregoing reasons, I do not find any merits in this petition. Accordingly, the petition is dismissed.