Judgment:
A. Gopal Reddy, J.
1. This appeal by the complainant is directed against the judgment of the 1st Additional District and Sessions Judge, Kurnool in Criminal Appeal No. 10 of 2000 dated 26-4-2000 wherein the appeal filed by 1st respondent-Accused No. 2 was allowed setting aside the conviction and sentence recorded by the Judicial Magistrate of 1st Class, Kurnool in C.C. No. 77 of 1999 dated 30-12-1999 against him for the offence punishable under Section 138 of the Negotiable Instruments Act (for short 'the Act').
2. The appellant filed a complaint against the 1st respondent-accused No. 2 and his father (A. 1) for the offence punishable under Section 138 of the Act alleging that he was the owner of the Ambassador Car bearing No. AAQ 1725 and he sold it to A. 1 for Rs. 55,000/- out of which A. 1 paid an amount of Rs. 40,000/- and for the balance amount of Rs. 15,000/- A. 2 who is no other than the son of A. 1 issued a cheque on the account maintained by him. When the cheque was deposited for collection, it was returned with an endorsement 'insufficient funds.' Later, he met both the accused and informed them about the dishonour of the cheque and, at their request, he presented the same fifteen days later for collection. But, the cheque was returned again with endorsement 'insufficient funds.' Thereafter, he got issued a legal notice dated 8-2-1999 calling upon them to pay the amount, but the accused managed to return the same as unserved. Therefore, he filed the complaint against the accused.
3. In order to prove the complaint allegations, the complainant got himself examined as P.W. 1 and another witness P.W. 2 was examined as an Independent witness and marked Exs. P. 1 to P.6 as documentary evidence.
4. The lower Court after analysing the oral and documentary evidence, found A. 1 not guilty of the offence and acquitted him of the offence, but A. 2 was found guilty for the offence punishable under Section 138 of the Act and accordingly he was convicted and sentenced to suffer simple imprisonment for a period of three months and also to pay a fine of Rs. 16,000/- and in default of such payment to suffer simple Imprisonment for one month.
5. Questioning the conviction and sentence recorded by the lower Court, accused No. 2 preferred appeal before the 1st Additional District and Sessions Judge who by impugned judgment allowed the appeal holding that since there is no relationship of 'debtor' and 'creditor' between the 'complainant' and 'accused No. 2,' though he is the son of A. 1, the same will not confer a right on the complainant to enforce the liability of A.I against A. 2. It was, therefore, concluded that there was no relationship of 'debtor' and 'creditor' between the 'complainant' and 'appellant-accused No. 2.'
6. It was further held that as per the complaint allegations, the cheque was dishonoured and returned on 1-1-1999 for 'insufficient funds.' Demand notice was not given to accused No. 2 within fifteen days thereafter. Instead of giving a demand notice, the complainant again presented the cheque for collection for second time on 29-1-1999, which was again dishonoured. Since the complainant has lost fifteen days time for issuing a demand notice on the earlier presentation of the cheque and return of the same, it cannot be accepted that the drawer of the cheque requested him for representation of the cheque again and as such the complaint filed by the complainant is time-barred and accordingly allowed the appeal.
7. The grounds on which the lower appellate Court set aside the conviction and sentence imposed on 1st respondent-accused No. 2 are not sustainable. Under Section 118 of the Act, a presumption can be drawn that the negotiable Instrument is for a consideration until the contrary is proved. The proviso to Section 118 envisages that where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. In the present case, it is not the case of the accused No. 2 that the cheque has been obtained by the complainant by means of an offence or fraud or for unlawful consideration. Section 139 of the Act draws a presumption in favour of the holder of the cheque that unless the contrary is proved that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part or any debt or other liability. Section 138 of the Act reads as under:
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 and shall, without prejudice to any other provisions 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;
(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 fifteen days of the receipt of the said notice,
Explanation : For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other liability.
8. Therefore, Section 138 of the Act provides that 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 is liable for punishment.
9. Section 27 of the Act defines 'agency' to mean 'every person capable of binding himself or of being bound, as mentioned in Section 26, may so bind himself or be bound by a duly authorized agent acting in his name'. Section 28 says that an agent who signs his name to a promissory note, bill of exchange or cheque without indicating thereon that he signs as agent, or that he does not intend thereby to incur personal responsibility, he is liable personally on the instrument, except those who induced him to sign upon the belief that the principal only would be held liable. Since the accused has failed to discharge any of the aforesaid contingencies and having undertaken to discharge the legal liability incurred by his father, under Section 26 of the Act, by issuing the cheque, he is personally liable to pay the amount and it is not open for him to contend that the said amount is not legally enforceable and he is not bound by the cheque.
10. In Alexander v. Joseph Chacko (1993) (2) KLT 326, the Kerala High Court considered the question whether for the purpose of Section 138 of the Act, it is necessary that a debt for which the cheque is executed should be the liability of the drawer himself. It was held that the section does not say that the cheque should have been drawn for the discharge of any debt or other liability of the drawer towards the payee. If the intention of the Parliament was other - wise the words 'of any debt or other liability' appearing in Section 138 of the Act would have been further qualified by adding the words 'of the drawer'. The object of the Legislature being to enhance the credibility or acceptability of the cheque and in view of the wording in Section 138 of the Act as available now, it is immaterial whether the cheque was issued for the discharge of his own debt or liability. It was specifically held that the cheque issued for discharge of another man's debt or liability could also come within the scope of Section 138 of the Act.
11. The Delhi High Court in Pratap Singh Yadav v. Atal Behari Pandey 2003 Cri LJ 705 held as under (Para 8):
In the instant case, petitioner No. 1 has not drawn any cheque in favour of the respondent. It is petitioner No. 2 who had drawn the cheque for Rs. 1,05,000/- at his own bank account for discharging the liability, payment of debt of his father, petitioner No. 1 herein. The offence within the purview of Section 138 is committing by petitioner No. 2 whose cheque was bounced by the bank on which it was drawn for insufficiency of funds in the account of petitioner No. 2 (to be precise closure of account) and his subsequent failure to make the payment. It is a criminal offence. Only petitioner No. 2 can be said to have committed the offence covered by Section 138. How will petitioner No. 1 be guilty of an offence under Section 138 of the Act has not been explained. He cannot have vicarious liability for offence by implication or otherwise as certain persons have by application of Section 141 of the Act....
12. For the reasons aforementioned and in view of the decisions sited supra, once 1st respondent herein (A. 2) issued the cheque with the intention that it should cover the liability of his father (A1), he cannot escape from his liability for dishonour of Ex. P. 1 cheque issued by him because it was issued to cover the legal liability incurred by his father. In my considered view, the trial Court has rightly convicted him for the offence and the finding recorded by the lower appellate Court that the liability cannot be legally enforceable against the 1st re-spondent-A2 is erroneous and cannot be sustained.
13. The next ground on which the lower appellate Court acquitted A. 2 is that the notice was not issued to A. 2 on the dishonour of the cheque for the first time and, therefore, the complaint filed on 3-3-1999 is time barred. This Court finds no merit in the said reasoning. It is now well settled that a cheque can be presented any number of times within its period of validity, but once notice was issued for dishonouring of the cheque, the payee has to avail the very cause of action arising thereupon and has to file complaint on that basis only and prosecution cannot be launched on the basis of dishonouring of the cheque on its presentation for the second time after issuing of notice contemplated under Section 138 of the Act. See Prem Chand Vijay Kumar v. Yashpal Singh : (2005)4SCC417 . It is not the case of the appellant that on dishonouring of the cheque on earlier presentation, a notice was issued to them. In view of the same, the lower appellate Court has committed a manifest illegality in coming to the conclusion that the appellant has not filed the complaint within time from the date of first dishonour of the cheque and thus the complaint is time barred cannot be sustained and the same is set aside.
14. For the reasons aforesaid, the impugned judgment of the lower appellate Court is set aside and the judgment of the trial Court convicting and sentencing A. 2 for the offence punishable under Section 138 of the Act is restored. Appeal is accordingly allowed.