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2013 DIGILAW 1190 (RAJ)

Parmeshwar Lal v. Mohan Singh

2013-07-05

SANDEEP MEHTA

body2013
JUDGMENT 1. - The instant appeal has been preferred on behalf of the appellant complainant challenging the judgment dated 15.12.2010 passed by the learned Judicial Magistrate, First Class, Churu in Criminal Case No. 440 of 2007 (367A/2010), whereby the complaint filed by the appellant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the NI Act) was rejected and the respondent No. 1 Mohan singh was acquitted from the charge under Section 138 of the NI Act. 2. Learned counsel for the appellant submitted that a very short controversy has been raised in this case for the consideration of this Court. Learned counsel urged that the learned Magistrate acquitted the respondent No. 1 Mohan Singh from the charge under Section 138 of the NI Act on the soie ground that the complaint in this case was filed on the basis of a second demand notice issued by the complainant. Learned counsel submitted that the view taken by the learned Trial Court was based on a decision of the Hon'ble Apex Court rendered in the case of Tameshwar Vaishnav v. Ramvishal Gupta, reported in (2010) 2 SCC 329 : 2010 (1) NIJ 83 (SC) . Learned counsel submitted that the view expressed by the Division Bench of the Hon'ble Apex Court in Tameshwar Vaishnav's case (supra) was considered and overruled by a three Judges Bench of the Hon'ble Apex Court in the case of MSR Leathers v J.S. Palaniappan & Anr., reported in 2012 (2) NIJ 338 (SC) : (2013) 1 SCC 177 . Learned counsel urged that in the aforesaid case, the Hon'ble Apex Court has unequivocally held that there is no illegality in a prosecution based upon second or successive dishonour of the cheque as long as the prosecution satisfies the requirements stipulated in proviso to Section 138 of the NI Act. Learned counsel submitted that the Hon'ble three Judges Bench of the Hon'ble Apex Court answered a reference in the aforesaid decision and held that the view taken by the two Judges Bench of the Hon'ble Apex Courts in the case of Sadanandan Bhadran v. Madhava Sunil Kumar, (1998) 6 SCC 514 : 2009 (1) NIJ 61 (SC)[NOC] , that a prosecution basedon a second default or a second notice was illegal and did not lay down a good law. Learned counsel urged that the decision of the Hon'ble Apex Court in the case of Tameshwar Vaishnav's (supra) was also based on the view expressed in Sadanandan Bhadran's case (supra) and thus, the same also stands impliedly overruled by the decision of the Hon'ble Apex Court in the case of MSR Leathers (supra) while answering the reference. Learned counsel thus prayed that the instant appeal be accepted and the matter be remanded back to the learned Trial Court for fresh consideration on merits. 3. Per contra, learned counsel appearing on behalf of the respondent No. 1 vehemently opposed the submissions advanced by learned counsel for the appellant and contended that the learned Trial Court did not commit any illegality or irregularity in acquitting the respondent No. 1 from the charge under Section 138 of the NI Act. Learned counsel for the respondent No. 1 contended that when the Trial Court was deciding the matter, the law prevalent at that point of item was the law propounded by the Hon'ble Apex Court in Sadanandan Bhadran's and Tameshwar Vaishnav's cases (supra), as such, the judgment of the learned Trial Court acquitting the respondent No. 1 from the charge under Section 138 of the NI Act does not call for any interference by this Court. 4. Heard learned counsel for the parties and perused the judgment impugned. 5. On a perusal of the impugned judgment, it is manifest that the learned trial Judge proceeded to acquit the respondent No. 1 on the solitary ground that the complaint was based on a second dishonour of the cheque pursuant to second demand notice and that the complainant did not take any action after the first notice had been served on the accused and thus the prosecution was barred by limitation. The decision of the learned Trial Court was based on the decision of the Hon'ble Apex Court in the case of Tameshwar Vaishnav's (supra) as has been observed above. The view taken by the Hon'ble Apex Court in thecases of Sadanandan Bhadran and Tameshwar Vaishnav (supra), stands overruled by a Larger Bench's decision rendered by the Hon'ble Apex Court whilst answering a reference in the case of MSR Leathers (supra). In the said decision, the Hon'ble Apex Court observed as below: 6. The view taken by the Hon'ble Apex Court in thecases of Sadanandan Bhadran and Tameshwar Vaishnav (supra), stands overruled by a Larger Bench's decision rendered by the Hon'ble Apex Court whilst answering a reference in the case of MSR Leathers (supra). In the said decision, the Hon'ble Apex Court observed as below: 6. When the present appeal first came up for hearing before a bench comprising Markandey Katju and B. Sudershan Reddy, JJ., reliance on behalf of respondents was placed upon the decision of this Court in Sadanandan Bhadran's case (supra) to argue that the complaint in the instant case had also been filed on the basis of the second dishonour of a cheque after the payee of the cheque had issued a notice to the drawer under clause (b) of the proviso to Section 138 of the Act based on an earlier dishonour. On the ratio of Sadanandan Bhadran's case (supra) such a complaint was not maintainable, argued the respondents. The Court, however, expressed its reservation about the correctness of the viewtaken in Sadanandan Bhadran's case (supra) especially in para 9 thereof and accordingly referred the matter to a larger Bench. That is precisely how the present appeal has come up for hearing before us. It is, therefore, evident that this Court has repeatedly followed the view taken in Sadanandan Bhadran's case (supra). But a careful reading of these decisions reveals that in these subsequent decisions there had been no addition to the ratio underlying the conclusion in Sadanandan Bhadran's case (supra). With utmost respect to the Judges who decided Sadanandan Bhadran's case (supra) we regret our inability to fall in line with the above line of reasoning to hold that while a cheque is presented afresh the right to prosecute the drawer, if the cheque is dishonoured, is forfeited only because the previous dishonour had not resulted in immediate prosecution of the offender even when a notice under clause (b) of proviso to Section 138 had been served upon the drawer. We are conscious of the fact that Sadanandan Bhadran's case (supra) has been followed in several subsequent decisions of this Court such as in 5/7 Import, USA v. Exim Aides Silk Exporters, Bangalore, (1999) 4 SCC 567 : 2009 (1) NIJ 84 (SC)[NOC] , Uniplas India Ltd. & Ors. We are conscious of the fact that Sadanandan Bhadran's case (supra) has been followed in several subsequent decisions of this Court such as in 5/7 Import, USA v. Exim Aides Silk Exporters, Bangalore, (1999) 4 SCC 567 : 2009 (1) NIJ 84 (SC)[NOC] , Uniplas India Ltd. & Ors. v. State (Govt, of NCT Delhi) & Anr., (2001) 6 SCC 8 : 2009 (1) NIJ 39 [NOC](SC) , Dalmia Cement (Bharat) Ltd. v. Galaxy Traders Agencies Ltd. & Anr., (2001) 6 SCC 463 : 2009 (1) NIJ 70 (SC)[NOC] , Prem Chand Vijay Kumar v. Yashpal Singh & Anr., (2005) 4 SCC 417 : 2006 (1) NIJ 121 (SC) , S.L. Constructions & Anr. v. Alapati Srinivasa Rao & Anr., (2009) 1 SCC 500 : 2009 (1) NIJ 261 (SC) , Tameshwar Vaishnav v. Ramvishal Gupta, (2010) 2 SCC 329 : 2010 (1) NIJ 83 (SC) . 17. All these decisions have without disturbing or making any addition to the rationale behind the decision in Sadanandan Bhadran's case (supra) followed the conclusion drawn in the same. We, therefore, propose to deal with the three dimensions that have been highlighted in that case while holding that successive causes of action are not within the comprehension of Secs. 138 and 142 of the Act. Applying the above rule of interpretation and the provisions of Section 138, we have no hesitation in holding 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 a statutory notice and a failure to pay had not been launched. If the entire purpose underlying Section 138 of the Negotiable Instruments Act is to compel the drawers to honour their commitments made in the course of their business or other affairs, there is no reason why a person who has issued a cheque which is dishonoured and who fails to make payment despite statutory notice served upon him should be immune to prosecution simply because the holder of the cheque has not rushed to the court with a complaint based on such default or simply because the drawer has made the holder defer prosecution promising to make arrangements for funds or for any other similar reason. There is in our opinion 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. 32. The controversy, in our opinion, can be seen from another angle also. If the decision in Sadanandan Bhadran's case (supra) is correct, there is no option for the holder to defer institution of judicial proceedings even when he may like to do so for so simple and innocuous a reason as to extend certain accommodation to the drawer to arrange the payment of the amount. Apart from the fact that an interpretation which curtails the right of the parties to negotiate a possible settlement without prejudice to the right of holder to institute proceedings within the outer period of limitation stipulated by law should be avoided we see no reason why parties should, by a process of interpretation, be forced to launch complaints where they can or may like to defer such action for good and valid reasons. After all, neither the courts nor the parties stand to gain by institution of proceedings which may become unnecessary if cheque amount is paid by the drawer. The magistracy in this country is over-burdened by an avalanche of cases under Section 138 of Negotiable Instruments Act. If the first default itself must in terms of the decision in Sadanandan Bhadran's case (supra) result in filing of prosecution, avoidable litigation would become an inevitable bane of the legislation that was intended only to bring solemnity to cheques without forcing parties to resort to proceedings in the courts of law. While there is no empirical data to suggest that the problems of overburdened magistracy and judicial system at the district level is entirely because of the compulsions arising out of the decisions in Sadanandan Bhadran's case (supra), it is difficult to say that the law declared in that decision has not added to court congestion. 33. In the result, we override the decision in Sadanandan Bhadran's case (supra) and hold that prosecution based upon second or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements stipulated in the proviso to Section 138 of the Negotiable Instruments Act. The reference is answered accordingly. 33. In the result, we override the decision in Sadanandan Bhadran's case (supra) and hold that prosecution based upon second or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements stipulated in the proviso to Section 138 of the Negotiable Instruments Act. The reference is answered accordingly. The appeals shall now be listed before the regular Bench for hearing and disposal in light of the observations made above." 6. Since, the very basis of the decision in Tameshwar Vaishnav's case (supra) was the earlier view taken by the Hon'ble Apex Court in the case of Sadanandan Bhadran's (supra) and as the said view taken by the Hon'ble Apex Court stands overruled by a Larger Bench in a decision which has been referred to above, it necessarily follows as a corollary that the judgment passed by the Hon'ble Apex Court in the case of Tameshwar Vaishnav's (supra) also stands overruled. 7. As a result of the aforesaid discussion, the judgment dated 15.12.2010 passed by the learned Judicial Magistrate, First Class, Churu acquitting the respondents No. 1 Mohan Singh from the charge under Section 138 of the NI Act cannot be sustained and is hereby set aside. The matter be remanded back to the learned trial Judge, who shall hear the parties afresh and then pass a fresh reasoned judgment in accordance with law. It goes without saying that none of the observations made by this Court in this order shall effect the rights and defences available to either of the parties.Accordingly, the appeal is disposed of.Appeal disposed of. *******