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2011 DIGILAW 1147 (CAL)

Ram Chandra Singh Chouhan v. Ram Gopal Sharma

2011-08-19

KANCHAN CHAKRABORTY

body2011
JUDGMENT Kanchan Chakraborty, J. 1. The legality, validity and propriety of a concurrent finding of fact has been challenged in this revisional application, mainly, on the following two-fold grounds:-- (a) That in view of explanation to section 138 of the N.I. Act, 'debt or other liability', for the purpose of section 138 of the N.I. Act, should be a legally enforceable debt or liability, which is not in the case in hand because the alleged debt was a time barred one; (b) That the criminal action was initiated by the opposite party against the petitioner under section 138 of the N.I. Act in violation of mandatory provisions of section 142(b) of the Act. The opposite party No. 1 Ram Gopal Sharma lodged a complaint being No. C/226/02 against the petitioner in the Court of the learned Additional Chief Metropolitan Magistrate, Calcutta under section 138 of the Negotiable Instruments Act on 15.02.2002 alleging therein that a cheque of Rs. 50,000/- drawn by the petitioner in favour of the opposite party in discharge of monetary liability arose out of business transaction between them. The cheque was dishonoured on presentation by the banker of the opposite party No. 1 for insufficiency of fund in the account. The information was received by the opposite party No. 1 from the bank on 10.01.2002, Without delay, on 17.01.02, the opposite party No. 1 sent a demand notice to the petitioner which he received on 04.02.2002. The petitioner failed to pay the money as demanded through notice by the opposite party No. 1 within a period of 15 days from the date of the receipt of the notice. The opposite party No. 1 filed the complaint in the Court against the petitioner on 15.02.2002. 2. The learned Trial Court upon consideration of evidence on record, oral and documentary, found the petitioner guilty of offence under section 138 of the N.I. Act and sentenced him to pay a fine of Rs. One lakh, in default, to suffer simple imprisonment for one year. It was also directed that the amount of fine to be paid to the complainant as compensation. The order was appealed against and the Criminal Appeal being No. 58/09 was dismissed by the learned Appellate Court whereby the order of the learned Metropolitan Magistrate was affirmed. 3. One lakh, in default, to suffer simple imprisonment for one year. It was also directed that the amount of fine to be paid to the complainant as compensation. The order was appealed against and the Criminal Appeal being No. 58/09 was dismissed by the learned Appellate Court whereby the order of the learned Metropolitan Magistrate was affirmed. 3. That the petitioner has come up with this revisional application against the judgment and order dated 06.02.2010 passed by the learned Appellate Court on the above-mentioned ground's. 4. The question is whether under the facts and circumstances of the case and evidence on record, the learned Appellate Court made any error of fundamental principles of law resulting in gross miscarriage of justice requiring or necessitating any interference of this Court in exercising its revisional jurisdiction. 5. Mr. Sarkar, learned Advocate appearing on behalf of the petitioner contended that the money due out of the alleged business transaction was Rs. 90,000/- and that transaction took place in the year 1996. The cheque in question i.e. cheque of Rs. 50,000/- dated 15.12.2001 was drawn by the petitioner in favour of the opposite party No. 1 was placed before the bank by the opposite party No. 1. Since the loan transaction had taken place on 20.12.1996, that particular loan became a time barred loan on 15.12.2001 i.e., the date when the cheque was drawn in favour of the opposite party No. 1 by the petitioner. So, being a time barred debt, it was not legally enforceable in view of the explanation to section 138 of the Negotiable Instruments Act. 6. Mr. Sarkar, learned Advocate for the petitioner refers to a decision of Himachal Pradesh High Court in Narinder Kumar vs. Harnam Singh, reported in 2000 Cr. LJ 257 in support of his contention. 7. In that case before the Himachal Pradesh High Court it was found that there was no subsisting debt or other liability was existing which accused was legally bound to discharge. It was also not established in that case that the cheque in question was issued with a view to discharge any such debt/liability. The Himachal Pradesh High Court was pleased to apply the explanation to section 138 of the N.I. Act in that case and came to a conclusion that the accused therein was entitled to be acquitted. It was also not established in that case that the cheque in question was issued with a view to discharge any such debt/liability. The Himachal Pradesh High Court was pleased to apply the explanation to section 138 of the N.I. Act in that case and came to a conclusion that the accused therein was entitled to be acquitted. The factual aspect of the case before the Himachal Pradesh High Court and the case in hand are quite different. The Himachal Pradesh High Court, in fact and in substance, has not laid down any law over this issue. 8. In the instant case, it has never been agitated by the petitioner that the cheque he issued which was the subject-matter before the learned Trial Court as well as the learned Appellate Court, was not for discharging any debt or liability arose out of loan transaction dated 20.12.1996. He has taken the plea that although there was a debt or liability he was to discharge, that became time barred and by issuance of cheque by whom on 15.12.2001 that time barred debt has not revived and become legally enforceable debt. 9. Mr. Ayan Bhattacharya, learned Advocate appearing on behalf of the opposite party No. 1 contended that when a person draws a cheque, in discharge of money due, he acknowledges his debt/liability and thereby binds himself to the obligation to make payment if his cheque is dishonoured. The provisions of section 25(3) of the Contract Act apply squarely in that case together with sections 118 and 139 of the Act. He refers to the following decisions in support of his contention:-- (a) A.V. Murthy vs. B.S. Nagabasavanna, reported in AIR 2002 SC 985 ; (b) Ramakrishnan vs. Parthasaradhy, reported in 2003 (2) DCR 192 ; (c) P.N. Gopinathan vs. Sivadasan Kunju & Anr., reported in 2007 Cr. LJ 2776; (d) Ramakrishnan vs. Gangadharan Nair & Anr., reported in 2007 Cr. LJ 1486; (e) H. Narasimha Rao vs. Venkataram R., reported in 2007 Cr. LJ 583; (f) A.R.M. Nizmathuallah vs. Vaduganathan, reported in 2008 Cr. LJ 880; (g) Shyamsundar Babu Naik Dessai vs. Baban Anant Baik & Anr., reported in 2009 (1) DCR 599. 10. The word 'debt' has to be given a wider meaning in N.I. Act. LJ 1486; (e) H. Narasimha Rao vs. Venkataram R., reported in 2007 Cr. LJ 583; (f) A.R.M. Nizmathuallah vs. Vaduganathan, reported in 2008 Cr. LJ 880; (g) Shyamsundar Babu Naik Dessai vs. Baban Anant Baik & Anr., reported in 2009 (1) DCR 599. 10. The word 'debt' has to be given a wider meaning in N.I. Act. In U.O.I. vs. Raman Iron Foundry, reported in AIR 1974 SC 1265 , the Hon'ble Apex Court observed:-- It would be profitable in this connection to refer to the concept of a 'debt', for a sum due is the same thing as a debt due. The classical definition of 'debt' is to be found in Webb vs. Stenton, where Lindley, LJ, said: ....a debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation. There must be debitum in prasenti; solvendrum may be in praesenti or in futuro that is immaterial. There must be an existing obligation to pay a sum of money now or in future. The following passage from the judgment of the Supreme Court of California in People vs. Arguello, which was approved by this Court in Kesoram Industries vs. Commr. of Wealth Tax, clearly brings out the essential characteristics of a debt. It goes like below-- Standing alone, the word 'debt' is as applicable to a sum of money which has been promised at a future day as to a sum now due and payable. If we wish to distinguish between the two, we say of the former and it is a debt owing, and of the latter that it is a debt due. 11. The concept adopted by the English Courts regarding the effect of an acknowledgement or a part payment has been recognized by Indian Courts also at a subsequent stage. The idea behind this is summarized below:-- A doctrine on the matter was gradually evolved by the Courts. This judge-made rule was that any acknowledgement which amounted to an express or to an implied promise to pay took the case out of the statute and made time begin afresh. The existence of this doctrine, once it had been judicially established, was recognized by statutes. Time which has started to run against the creditor may be stopped and made to start afresh of an acknowledgement of liability or by a part payment by the debtor. The existence of this doctrine, once it had been judicially established, was recognized by statutes. Time which has started to run against the creditor may be stopped and made to start afresh of an acknowledgement of liability or by a part payment by the debtor. This is so even though the acknowledgement or payment is not given until after the expiration of the full statutory period. The Privy Council has suggested that the acknowledgement is not effective unless it is an admission of a present debt subsisting at the date of signature and that it is not enough to admit that the debt existed in the past. More recently, however, this suggestion was rejected and it was accepted by the Courts that if the present existence of debt is admitted, the precise amount what is due need not be stated. It is sufficient that if this is ascertainable by extrinsic evidence. The effect of an acknowledgement or a part payment by one of a number of persons liable for a liquidated debt is determined by the statute. An acknowledgement binds the person acknowledging and his successors only, not his co-debtors; but a part payment binds all the co-debtors unless it is made after the expiration of the statutory period. A part payment operates for the benefit of all the co-debtors, and it is only fair that if they take the advantage they should also take the disadvantage; but a payment made after the statutory period has run its full course can scarcely be an advantage to those who are already free from liability. If the statutory period expires before action brought, the plaintiffs right is not extinguished. He is merely deprived of his two remedies of action and set off. The statute is procedural not substantive. A statute-barred debt is still payable despite the fact that its payment cannot be enforced by action, and if there is any other method by which the creditor can obtain satisfaction it is at his disposal. Thus if a debtor pays money on account of debts, some of which are statute-barred and some not, and does not expressly indicate that the payment is made in respect of those which are still actionable, the creditor may appropriate the money to those that are statute-barred. Thus if a debtor pays money on account of debts, some of which are statute-barred and some not, and does not expressly indicate that the payment is made in respect of those which are still actionable, the creditor may appropriate the money to those that are statute-barred. Again if a party is entitled to a lien on goods for a general balance, and he gets possession of the goods of his debtor, he may hold them until his whole demand is satisfied notwithstanding that it is barred by the Limitation Act. 12. For the proper appreciation of the matter, it would be expedient to look at the relevant provisions of the Act. 13. Section 118 of the N.I. Act is reproduced below:-- S. 118. Presumptions as to negotiable instruments.--Until the contrary is proved, the following presumptions shall be made:-- (a) of consideration--that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; (b) as to date--that every negotiable instrument bearing a date was made or drawn on such date; (c) as to time of acceptance--that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; (d) as to time of transfer--that every transfer of a negotiable instrument was made before its maturity; (e) as to order of indorsements--that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; (f) as to stamp--that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course--that the holder of a negotiable instrument is a holder in due course: Provided 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. 14. Section 139 of the N.I. Act says:-- S. 139. 14. Section 139 of the N.I. Act says:-- S. 139. Presumption in favour of holder--It shall be presumed, 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, of any debt or other liability. 15. Section 25 and sub-section (3) of section 25 of the Contract Act reads as follows:-- 25. Agreement without consideration, void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law--An agreement made without consideration is void, unless-- (1) It is expressed in writing and registered under the law for the time being in force for the registration of [documents], and is made on account of natural love and affection between parties standing in a near relation to each other; or unless; (2) It is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless; (3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these case, such an agreement is a contract. Explanation 1.--Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made. Explanation 2.--An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given. Illustrations (a) to (d) .... (e) A owes B Rs. 1000/-, but the debt is barred by the Limitation Act. A signs a written promise to pay B Rs. 500 on account of the debt. This is a contract. 16. In A.V. Murthy (supra) the cheque in question was drawn against he payment advanced by the complainant 4 years back. Illustrations (a) to (d) .... (e) A owes B Rs. 1000/-, but the debt is barred by the Limitation Act. A signs a written promise to pay B Rs. 500 on account of the debt. This is a contract. 16. In A.V. Murthy (supra) the cheque in question was drawn against he payment advanced by the complainant 4 years back. The Hon'ble Apex Court was pleased to disapprove, dismissal of a complaint at a threshold on ground that as amount was advanced 4 years prior to cause of action here was no legally enforceable debt. The Apex Court considered the revisions of sections 118 and 139 of the Act and opined that it was not a case where cheque was drawn in respect of a debt or liability which was completely barred from being enforced under the law. 17. In Ramakrishnan vs. Parthasaradhy (supra), the Division Bench of Kerala High Court while taking into consideration their view taken by the Single Bench decision of this Court in Joseph v. Devassia, came to a findings that the promise can be made even in a case where limitation for recovery of amount has already expired if such a promise is made in writing and that when a cheque is delivered to payee and is dishonoured, the liability under section 138 would arise. 18. In P.N. Gopinathan vs. Sivadasan Kunju & Anr. (supra), it was held by the Hon'ble Single Judge that the cheques issued for discharge of time-barred debt--come within sweep of Section 138 of the Act. 19. In V. Satyanarayana Raju vs. G.B. Gangadhara Reddy & Anr. (supra), the Hon'ble Single Judge of the Andhra Pradesh High Court also opined that issuance of cheque would re-validate the debt and consequent liability on the part of the drawer of the cheque. 20. In Ramakrishnan vs. Gangadharan Nair & Anr. (supra) it was also opined that the cheque issued for discharge of time barred debt falls within the purview of section 138 in view of section 25(3) of the Contract Act and section 46 of the N.I. Act. 21. Another Single Judge of Karnataka High Court in H. Narasimha Rao vs. Venkataram R. (supra) has taken a similar view. 22. In Parameswar Sarappa & Anr. vs. S. Sudappa, reported in 2007 Cr. 21. Another Single Judge of Karnataka High Court in H. Narasimha Rao vs. Venkataram R. (supra) has taken a similar view. 22. In Parameswar Sarappa & Anr. vs. S. Sudappa, reported in 2007 Cr. LJ 586, another Single Judge of Karnataka High Court opined that once cheque is issued, accused cannot contend that it is not in respect of any unenforceable debt. 23. In A.R.M. Nizmathuallah vs. Vaduganathan (supra) it was held by the Single Judge of Madras High Court (Madurai Bench) that when a debt was barred by limitation but, the accused had entered into a agreement, he has given acknowledgement thereby promising to pay debts. In view of illustration (e) to section 25(3) of the Contract Act, cheque becomes a promise made in writing to pay furnishing fresh cause of action and proceedings against the accused cannot be quashed on that ground alone. 24. It has gone a step further by observing that even in case based on reasons otherwise, it is for the Trial Court to decide whether the cheque was actually given voluntarily by the accused to the complainant after the period of limitation. 25. In Shyamsundar Babu Naik Dessai vs. Baban Anant Naik and Another (supra), the Hon'ble Single Judge of Bombay High Court also taken the similar view and held that a cheque is a promise to pay an amount and hence gives rise to a fresh contract and fresh set of obligation to pay the amount. 26. I have already discussed the concept behind giving effect to and acknowledgement of a time barred debt or part payment as a fresh promise and gives rise to a fresh cause of action. The principle initially adopted by the English Courts have been recognized by the Indian Courts also which is evident from the sets of decisions referred to above. 27. In fact and in substance, Limitation Act only bars the remedy but does not destroy the right, which the remedy relates to. The right to debt continues to exist notwithstanding the remedy is barred by limitation. 28. Therefore, when the cheque is issued in favour of the payee, the drawer acknowledges his debt and that obviously gives rise to a fresh cause of action. Besides that section 118 as well as section 139 of the Act enable a Court to presume that a cheque is issued for discharge of legal debt or liability. 29. 28. Therefore, when the cheque is issued in favour of the payee, the drawer acknowledges his debt and that obviously gives rise to a fresh cause of action. Besides that section 118 as well as section 139 of the Act enable a Court to presume that a cheque is issued for discharge of legal debt or liability. 29. Admittedly, in the instant case, the petitioner issued the cheque in question for loan he had taken from the opposite party No. 1. Two cheques were issued by him amounting to Rs. 40,000/- and Rs. 50,000/-, respectively, in order to repay total loan amount of Rs. 90,000/-. There was no dispute as to the cheque amounting to Rs. 40,000/-. The proceeding under section 138 of the N.I. Act was initiated by the opposite party No. 1 in respect of the cheque amounting to Rs. 50,000/- issued 5 years after the loan transaction. It was not the case of the petitioner in the Trial Court that the cheque was not drawn by him for repayment of loan. He had taken the plea that it was a time barred debt. That plea is not tenable in view of the discussion above. So, I do not find any force in the contention of Mr. Sarkar, learned Advocate appearing on behalf of the petitioner. 30. Mr. Sarkar, learned Advocate appearing for the petitioner has taken another ground to the effect that the prosecution was initiated against his client in violation of mandatory provisions of sub-section (1) of section 142 of the N.I. Act. 31. Section 142 of the N.I. Act is set out below:-- S. 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 section 138 expect upon a complaint, in writing, made by the payee, or, as the case maybe, 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 section 138. [Provided that he cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfied the Court that he had sufficient cause for not making a complaint within such period;] (c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138. 32. Section 142 is to be read with clause (c) of the proviso to section 138 of the N.I. Act. It relates to arising of cause of action. Section 142(b) requires that the complaint is to be made within one month from the date on which cause of action arises under clause (c) of the proviso to section 138 of the N.I. Act. 33. It is also worth mentioning that proviso to section 142, which has been incorporated by Act of 2002, authorizes the Court to take cognizance at a belated complaint if the complainant satisfies the Court that he has sufficient cause for not making a complaint within such period. 34. Section 142 of the Act prescribes a period within which the complaint can be filed from the date of cause of action but no period is prescribed before which the complaint cannot be filed also. If the statute is read minutely it can well be understood that cause of action under section 138 arises only in case the drawer of the cheque fails to pay money demanded on dishonour of a cheque issued by him within 15 days from the date of receiving of the notice. Such complaint is to be made within one month from the date the period of 15 days from the date of receipt of the notice expires. There is no ambiguity in the language used in the statute itself in this regard. 35. In Tameeshwar Vaishnau vs. Ramvishal Gupta, reported in 2010 C Cr LR (SC) 671, it was held by the Apex Court that the complaint has to be filed within one month if the drawer of the cheque fails to make payment within 15 days. 36. The decision in C. Kalegouda vs. Sadashivappa, reported in 1998 Cr. LJ 3539 referred to by Mr. Sarkar was passed long before the amendment of 2002 when there was no proviso to clause (b) of section 142 of the Act. The decision in Narinder Kumar vs. Harnam Singh, reported in 2000 Cr. 36. The decision in C. Kalegouda vs. Sadashivappa, reported in 1998 Cr. LJ 3539 referred to by Mr. Sarkar was passed long before the amendment of 2002 when there was no proviso to clause (b) of section 142 of the Act. The decision in Narinder Kumar vs. Harnam Singh, reported in 2000 Cr. LJ 257 referred to by Mr. Sarkar is not acceptable in view of the fact that the factual aspect of the case before the High Court at Himachal Pradesh is different from than that of the present case in hand. 37. In that case, however, the Hon'ble Single Judge of Himachal Pradesh High Court has taken a view that limitation of one month for filing complaint starts running on expiry of period of 15 days stipulated under sub-clause (c) of section 138 in event of non-payment of amount of cheque. 38. The decision in M/s. Poornasree Agencies vs. M/s. Universal Enterprises & Anr., reported in 1995 Cr. LJ 1858 referred to by Mr. Sarkar does not come in aid of his client in any manner. It should not be lost sight of that the petitioner herein has come up with the application challenging the legality, validity and propriety of a concurrent findings of fact. The judgment passed by the learned Trial Court against the petitioner whereby convicting him under section 138 of the N.I. act was appealed against and the learned Appellate Court upon consideration together with facts and circumstances of the cases was pleased to dismiss the appeal and affirm the judgment passed by the learned Trial Court. 39. There is not manifest illegality or error in the fundamental principles of law either by the learned Trial Court or by the learned Appellate Court necessitating any interference into the concurrent findings of fact by this Court exercising its revisional jurisdiction. The questions of law raised by Mr. Sarkar in this revisional application cannot be answered in his favour in view of the discussion above. 40. Accordingly, I dismissed the revisional application. The order impugned is not required to be upset. The revisional application is, thus, disposed of. Criminal section is directed to supply urgent photostat certified copy of this order, if applied for, to the parties after usual undertaking.