‘Cheque Bounce’ Complaint based on second notice after Re-Presentation of Cheque Maintainable

The Supreme Court has held that a ‘cheque bounce’ complaint filed based on the second statutory notice issued after re-presentation of cheques, is maintainable.

The said ruling was held in the mater of M/s Sicagen India Ltd vs. Mahindra Vadineni & Ors. (Crl. Appeal 27-29 of 2019), decided on 08.01.2019.

Challenge

In the instant matter, three cheques issued by the accused were presented by the complainant, and after they were dishonoured, a notice was issued to the accused on 31.08.2009 demanding the repayment of the amount. Thereafter, these cheques were again presented which were dishonoured again. The complainant issued a statutory notice on 25.01.2010 and later filed the complaint under Section 138 of the Negotiable Instruments Act based on the second statutory notice.

Thereafter, the Accused filed a petition for quashing under section 482 CrPc of the complaint before the Madras High Court which allowed the said petition and quashed the complaint by holding that the amount has been specifically mentioned in the first notice and that the complainant himself has postponed the matter and issued the second notice on 25.01.2010 and the complaint filed on the same cause of action was not maintainable.

Held

Relying on the dicta of MSR Leathers vs. S. Palaniappan, it was held that there is nothing in the provisions of Section 138 of the Act that forbids the holder of the Cheque to make successive presentation of the cheque and institute the criminal complaint based on the second or successive dishonour of the cheque on its presentation. In the said case, it was specifically held that there is no real or qualitative difference between a case where default is committed and prosecution immediately launched and another where the prosecution is deferred till the cheque presented again gets dishonoured for the second or successive time.

It was held that a prosecution based on a second or successive default in payment of the cheque amount should not be impermissible simply because no prosecution based on the first default which was followed by statutory notice and a failure to pay had not been launched.