In N. Harihara Krishnan v. J.
Thomas [N. Harihara Krishnan v. J. Thomas,
(2018) 13 SCC 663 adverting to the ingredients of Section 138 of the Negotiable
Instruments Act, the Hon’ble Apex Court observed as follows:
“Obviously such complaints must contain
the factual allegations constituting each of the ingredients of the offence
under Section 138. Those ingredients are: (1) that a person drew a
cheque on an account maintained by him with the banker; (2) that such a
cheque when presented to the bank is returned by the bank unpaid; (3)
that such a cheque was presented to the bank within a period of six months from
the date it was drawn or within the period of its validity whichever is
earlier; (4) that the payee demanded in writing from the drawer of the
cheque the payment of the amount of money due under the cheque to payee; and (5)
such a notice of payment is made within a period of 30 days from the date of
the receipt of the information by the payee from the bank regarding the return
of the cheque as unpaid.”
The provisions of Section 141
postulate that if the person committing an offence under Section 138 is a
company, every person, who at the time when the offence was committed was in
charge of or was responsible to the company for the conduct of the business of
the company as well as the company, shall be deemed to be guilty of the offence
and shall be liable to be proceeded against and punished.
In the absence of the company
being arraigned as an accused, a complaint against the appellant was therefore
not maintainable. The appellant had signed the cheque as a Director of the
company and for and on its behalf. Moreover, in the absence of a notice of
demand being served on the company and without compliance with the proviso to
Section 138, the High Court was in error in holding that the company could now
be arraigned as an accused. Himanshu
v. B. Shivamurthy, (2019) 3
(1)An offence under Section 138 of the Negotiable Instrument Act is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank.
(2)Cognizance of any such offence is however forbidden under section 142 of the Negotiable Instrument Act except upon a complaint in writing made by the payee or holder of the cheque in due course within a period of one month from the date the cause of action accrues to such payee or holder under clause (c) of proviso to Section 138.
(3)The cause of action to file a complaint accrues to a complainant/payee/holder of a cheque in due course if —
(a)the dishonoured cheque is presented to the drawee bank within a period of six months from the date of its issue.
(b)If the complainant has demanded payment of cheque amount within thirty days of receipt of information by him from the bank regarding the dishonor of the cheque, and
(c)If the drawer has failed to pay the cheque amount within fifteen days of receipt of such notice.
(4)The facts constituting cause of action do not constitute the ingredients of the offence under Section 138 of the Act.
(5)The proviso to Section 138 simply postpones/defers institution of criminal proceedings and taking of cognizance by the Court till such time cause of action in terms of clause (c) of proviso accrues to the complainant.
(6)Once the cause of action accrues to the complainant, the jurisdiction of the Court to try the case will be determined by reference to the place where the cheque is dishonoured.
(7)The general rule stipulated under Section 177 CrPC applies to cases under Section 138 of the Negotiable Instruments Act. Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the court within whose jurisdiction the dishonor takes place except in situations where the offence of dichonour of the cheque punishable under Section 138 is committed alongwith other offences in a single transaction within the meaning of Section 220(1) read with Section 184 of the Code of Criminal Procedure or is covered by the provisions of Section 182(1) read with Sections 184 and 220 thereof. Dashrath Rupsingh Rathod v. State of Maharashtra, 2014 (86) ACC 882.
A bare perusal of Section 138 of Negotiable Instruments Act shows that to constitute an offence thereunder, following ingredients must be satisfied:
(a) A person must have drawn a cheque on an account maintained by him in a bank.
(b) It must be for payment of certain amount of money to any person out of his account.
(c) The cheque should have been drawn for discharge of any debt or any liability in whole or in part.
(d) The cheque has been presented to Bank within a period of six months from the date on which it was drawn or within a period of it’s validity, whichever is earlier.
(e) The cheque 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 with the bank.
(f) The payee or the holder in due course makes a demand for payment of said amount of money which remained unpaid due to return of cheque by the bank by giving a notice in writing to the drawer
(g) The notive must have been given within thrity days of the receipt of the information from the bank regarding return of the cheque as unpaid.
(h) The drawer of such cheque fails to make payment of aforesaid money to the payee or the holder within 15 days of the receipt of the said notice. Mahipal Singh v. State of U.P., 2014 (84) ACC 462.