The recent ruling by the Chhattisgarh High Court states that the cause of action in a cheque dishonor case arises when the cheque is dishonored for the last time, even if it has been presented to the bank multiple times within its validity period.
In the case of Manjeet Singh Dhillan v. Baljinder Singh Rajpal, the complaint was filed under Section 138 of the Negotiable Instruments Act, 1881. It was alleged that Dhillan borrowed ?3.00 lacs from Rajpal and issued a post-dated cheque which was subsequently dishonored multiple times despite several attempts to present it.
The trial court convicted Dhillan, sentencing him to six months of rigorous imprisonment and ordering him to pay ?3.50 lacs as compensation. Dhillan's appeal was dismissed by the Additional Sessions Judge, upholding the trial court’s judgment.
The High Court, in its ruling, referred to previous judgments and observed that within six months, the cheque may be presented several times, and hence the cause of action cannot be considered to have already arisen on the initial presentation date. Additionally, it noted that when a notice is duly directed and sent by post, any miscarriage of the notice does not render it invalid due to statutory presumption of deemed service.
The High Court also referred to the case of Damodar S. Prabhu v. Sayed Bablal, highlighting that the punishment in cheque dishonor cases primarily aims to ensure payment of money rather than seeking retribution. As the amount in question had already been deposited, the jail sentence imposed by the lower court was set aside.
Consequently, the High Court allowed the revision in favor of Dhillan in this case.
Case Title: Manjeet Singh Dhillan v. Baljinder Singh Rajpal
Bench: Justice Goutam Bhaduri
Case No.: CRIMINAL REVISION NO. 873 OF 2015
Counsel for the applicant: K.K. Singh
Counsel for the respondent: Neeraj Mehta
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