Nellai Steels represented by its Partner Mr. A. Imtiaz Mohideen v. K. R. Jayakumar
1993-12-08
N.ARUMUGHAM
body1993
DigiLaw.ai
Judgment : This revision filed under Sec.401 of the Code of Criminal Procedure, is directed against the order of dismissal passed by the learned VII Metropolitan Magistrate, George Town, Madras, made in C.C.No.6292 of 1989, dated 37. 1989, challenging the propriety and legality of the same. 2. Brief facts, which are necessary to be extracted, for the purpose of this revision, are as follows: The respondent herein, for having purchased the goods from the revision petitioner to the value of Rs.9,610on 211. 1988, drew a cheque for the said amount on 212. 1988 on M/s.Indian Overseas Bank, bearing number 228556 and handed over to" the revision petitioner. The revision petitioner presented the said cheque for encashment, which was returned as "exceeds arrangement" and as such, it was dishonoured on 3. 1989. But, however, it was represented on 4. 1989; 6. 1989; 26. 1989and 26. 1989. But all the times, the said cheque was returned similarly as dishonoured. Therefore, the revision petitioner issued a registered notice to the respondent herein on 7. 1989 as contemplated by law, and whereby demanded the payment of the said sum by the respondent within 15 days. Though the notice was received by the respondent on 6. 1989, he neither paid any amount nor replied the said notice. Alleging thus, that the respondent had committed the offence as provided under Secs.138 and 142 of the Negotiable Instruments Act as amended, on 20.7.1989, a complaint was filed before the learned Magistrate and it was taken on file in C.C.No.6292 of 1989 and consequently, sworn statement of the revision petitioner was recorded. But on considering and perusing the same, the learned Magistrate, on 37. 1989 found that both the drawal of the cheque by the respondent in favour of the petitioner on 212. 1988 and his first attempt to encash the same on 3. 1989 were just prior to the commencement of the relevant provision of law namely 4. 1989 and that, since the revision petitioner failed to issue any notice as provided by law, but however presented the said cheque into the bank, the respondent is clearly out of any criminal liability and that for the said reasoning and for want of further evidence, dismissed the complaint under Sec. 203, Crl.P.C Aggrieved, the petitioner herein, has come up with this revision. 3. I have heard Miss.H.M. Malathy, learned counsel for and on behalf of the revision petitioner.
3. I have heard Miss.H.M. Malathy, learned counsel for and on behalf of the revision petitioner. But none appeared and represented the respondent herein, though the case was listed for disposal on several occasions. Learned counsel for the petitioner challenged the propriety and correctness of the impugned order on the ground that the respondent was perfectly within the ambit of criminal liability and the non-commencement of the provisions of Secs.138 and 142 of the Act, does not affect the criteria but however, the subsequent events unfolded the criminal liability of the respondent, which the learned Magistrate, has totally ignored erroneously. 4. In view of the above position, an interesting question of law with regard to the scope and object of the passing of the amended provisions of the Negotiable Instruments Act, has become necessary for consideration in this case. 5. To appreciate the case in its entirety, it is useful to advert to Secs.138 and 142 of the Negotiable Instruments Act as amended by inserting Chapter 17 by enacting The Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, which came into force on 4. :1989. 2. 138.
5. To appreciate the case in its entirety, it is useful to advert to Secs.138 and 142 of the Negotiable Instruments Act as amended by inserting Chapter 17 by enacting The Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, which came into force on 4. :1989. 2. 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 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 payent of the said amount a 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 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.” 142.Cognizance of offences: Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)- .(a) no court shall take cognizance of any offence punishable under Sec.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 Sec.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 Sec.138.” 6. If one reads the above sections of law in the context of the averments made in the complaint and the sworn statement in the instant case, there cannot be any doubt at all that the present case squarely comes within the ambit of Secs.138 and 142 of the Act. It is seen, that for the amount of Rs.9,610, a cheque bearing number 228556, dated 212. 1988 drawn on the Indian Overseas Bank by the respondent herein, was handed over to the petitioner herein for the value of the goods purchased by him on an earlier occasion. This amount therefore becomes necessarily to be paid by the respondent to the revision petition and is clearly within the explanation provided to Sec.138 of he Act. Since the aforesaid amount has not been paid to the revision petitioner by the respondent, it is made clear that this amount had become a legally enforceable debt and a liability on the part of the respondent herein. At this juncture, Clause (c) of Sec.138 assumes every significance and plays a dominant role. This Sub-clause (c) is subject to the fulfilment of the ingredients provided in sub-clauses (a) and (b) of Sec.138, Accordingly, if it is scrutinized, it is seen that the cheque in question dated 212. 1988 was presented to the Bank For encashment on several occasions within six months by the revision petitioner but however returned as dishonoured. In this context, the exception Clause (a) to the proviso has been fully complied with. Upon the dishonouring of the said cheque on the last occasion, on 7.
1988 was presented to the Bank For encashment on several occasions within six months by the revision petitioner but however returned as dishonoured. In this context, the exception Clause (a) to the proviso has been fully complied with. Upon the dishonouring of the said cheque on the last occasion, on 7. 1989, a legal notice was given to the respondent immediately within a week and he was demanded to pay the said amount within 15 days of the receipt of the said notice, complying with the condition (b) of Sec.138. Though the respondent received the same on 7. 1989, he neither paid the amount within 15 days after 7. 1989 nor replied. Therefore, within the stipulated time the complaint has been filed by the revision petitioner under Sec.142 of the Act. Therefore, it is seen that Sec.138 of the Act has been fully attracted in this case. If this is the position and the written complaint preferred by the revision petitioner has been taken cognizance of by the learned Magistrate, since filed within the time, then the one and the only criterion, which assumes every significance in this case to be taken into consideration is, at what time the cause of action for this action arise? Simply because the cheque in question was drawn much earlier and it was presented into the bank on several occasions but dishonoured every time but prior to the commencement of Act, as observed by the learned Magistrate, in the impugned order, is not offence and not the criteria to be decided in this case. 7. Sec.2(n) of the Code of Criminal Procedure defines “offence” as any act or omission male punishable by any law for the time being in force and includes any act in respect of which a complaint may be made under Sec.20 of the Cattle Trespass Act, 1971; Therefore, the non-payment of the amount, by the respondent herein, after having been given an opportunity to pay the amount alone, gives the cause of action in cases of this nature as contemplated under Sec.142(b) of the Act.
An analysis of the definition for the word offence as aforesaid combined with the cause of action clause provided in Sec.142(b), makes it abundantly clear that the mere drawing of the cheque or the deposit of the same into the Bank for encashment or any return on dishonour of the same for any reason does not give any cause of action, which cannot be taken cognizance of by a Court of law. Under the Code of Criminal Procedure by virtue of Sec.142 of the Negotiable Instruments Act as amended, only the non-payment by the drawer of the cheque after the legal notice and within the time stipulated by law, alone gives cause of action amounting to an offence, which alone can be taken as cause of action by a court of law as an offence under the above Section of law. 8. A learned single Judge of this Court in V.S. Krishnan v. V.S. Narayanan, (1990) 1 M.W.N. (Crl.) 75, has held as follows: “Though the penal provision was non-existent when the cheque was issued by the respondent, the court is bound to look into general scope and purview of the statute, and the remedies sought to be applied. Laws made justly and for the benefit of individuals and for the community as a whole may relate to time antecedent to their commencement. Drawing cheque is not the act by which the offence is deemed to have been committed, it is when it is returned by the banker unpaid oh the twin grounds contemplated in the section, and when the drawer fails to make the payment within the period specified in Clause (c) of the provisions to Sec.139 the offence is completed.” 9. In I.V. Iyer, Proprietor, Reapwel Consultancy Services v. Chitra and Company 1990. M.W.N. (Crl.) 47, this Court while considering the scope of dishonouring cheque and the cause of action under the Negotiable Instruments Act has observed as follows: “Presentation of a cheque for the second time at the request of the accused-It cannot be stated that the cheque dishonoured when presented for the II time will not give rise to a cause of action to prefer a complaint which has been filed within the statutory period from the date of cause of action namely the date on which the. cheque was presented for the II time.” 10.
cheque was presented for the II time.” 10. In Prithviraj Kukkillaya v. Mathew Koshy and another, 1991 Crl.L.J. 1771, a division bench of the Kerala High Court has observed as follows: “Penalty provided under Sec.138 of the Act is attracted even if cheque was issued prior to the commencement or the Act, but the failure to pay the amount on demand after dishonour of cheque was subsequent to the commencement of the Act. It is omission to pay the amount on demand by issue of notice contemplated in Clause (b) of Sec.138 that is made an offence. If that event was after coming into force of Sec.138, the bar contemplated in Art. 20(1) of the Constitution is not applicable and the complaint would be maintainable. The date on which the cheque was issued or the date on which it was dishonoured by the Bank cannot be considered as the date of commission of offence under Sec.138, Clause (b) of Sec. 142 of the Act itself prescribes that no Court shall take cognizance of the offence unless complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to Sec.138. The act of issuing a cheque cannot be considered as starting point of commission of offence, nor does the dishonour of cheque by itself give rise to a cause of action, because payment can be made on receipt of notice of demand contemplated in clause (b) of Sec.138 and in that event, there is no offence, nor any attempt to commit the offence, nor even a preparation to commit the offence. Failure to pay the amount within fifteen days of receipt of notice alone is the cause of action.” 11. It is thus, the settled principle of law that the drawing of the cheque, handing over the same followed by the presentation and dishonouring by the bank do not amount to or give rise to the cause of action amounting to an offence but however, the noncompliance of the demand to pay the amount due, namely debt, within the time stipulated, clearly amounts to the omission mulcted with the criminal liability, as enunciated in Secs.138 and 142 of the Act. 12.
12. In this case, though there is no evidence let in by and on behalf of the revision petitioner as to why he had deposited the cheque in question on more than four occasions prior to the issuance of notice, however, it is a matter to be ascertained after issuing process to the witnesses by the court below but unfortunately, the above settled principle of law has been totally missing in this case and the learned Magistrate has thoroughly overlooked the said view and proceeded to reject the complaint on the basis of mere conjecture and superficialities, which clearly is erroneous and not correct and hence the impugned order is liable to be set aside. The learned Magistrate ought not to have dismissed the complaint under Sec.203, Crl.P.C for the reasonings given above. In the light of my finding given above since a patent error of law has been committed by the learned Magistrate, the proper course to render justice is to set aside the impugned order but however, direct the learned Magistrate again to take the complaint to file and on the basis of the sworn statement recorded already, issue process to the witnesses by giving opportunity to adduce evidence and to dispose of the same in accordance with law. In the light of the above position, I fully agree with the grievance exposed on behalf of the revision petitioner. 13. In the result, the revision succeeds and accordingly stands allowed and the impugned order is set aside. The court below is directed to take the complaint to file and to proceed in accordance with law as directed above and dispose of the case as expeditiously as possible.