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2018 DIGILAW 2482 (MAD)

B. Vijalakshmi v. R. Amaravathi

2018-08-10

N.ANAND VENKATESH

body2018
ORDER : The criminal original petition in CRL OP(MD) 5109 of 2008 has been filed to quash the proceedings in STC No. 630 of 2013 pending on the file of the Fast Track Judicial Magistrate No. I, Madurai. 2. Learned Counsel for the petitioner has made following submissions : It is an admitted case that the statutory notice was issued on 30.04.2013 by the respondent/complainant and the said notice was received by the petitioner/accused on 03.05.2013. On the same day, reply notice was sent by the petitioner denying the liability. A compliant was filed on 08.05.2013 and cognizance was taken on 09.05.2013 by the Magistrate Court. Therefore, the learned Counsel submitted that mandatory requirement under Section 138(c) of the Negotiable Instructions Act, was not complied with, since the complaint was filed and cognizance was taken within a period of 15 days, even before the cause of action arose for filing the complaint. The learned Counsel for the petitioner further submitted that no specific averment has been made in the complaint to the effect that the petitioner failed to pay the cheque amount within 15 days from the date of receipt of the notice. This according to the learned Counsel for the petitioner is an essential ingredient, which has to be mentioned in the complaint and in the absence of the same, the complaint is liable to be quashed. 3. The learned Counsel for the petitioner relied upon the following judgments to substantiate his arguments : 1. Ms. Nirmal Ahluvalia Vs. Ms. O.Meenakshi, reported in (2011) 2 MLJ (Crl), 2.Capt.D.Karunakar Vs Lt.Cl.A.C.Viswanathan and two others, reported in 2007-2.L.W(Crl) 806, 3. Y. Banumoorthy Vs. R.Janakiraman, reported in 2006 (1) MWN (Cr) (DCC) 78, 4. Shanku Concretes Pvt. Ltd and others Vs. State of Gujarat and another, reported in 2000 CRI.L.J.1988, 5. Dr.Kanchana Kamalanathan Vs. Nagaraj, reported in 1994-L.W.(Crl) 356, 6. M.Alangaram and Anr Vs. P.V. Selvam @ Selvaraj, reported in 1999(2)MWN (Cr)90, 7. Rakesh Nemkumar Porwal Vs. Narayan Dhondu Joglekar and another, reported in 1993 CRI.L.J.680, 8. Narsingh Das Tapadia Vs. Goverdhan Das Partani and Another, reported in (2000) 7 SCC 183 , 9. Sarav Investment & Financial Consultancy Private Limited and Another Vs. Lyods Register of Shipping Indian Office Staff Provident Fund and Another, reported in (2007) 14 SCC 753 , 10. K.Devaraj Vs. T.K. Koya, reported in 2003 CRI.L.J.520, 11. M/s. Shakti Travel and Tours Vs. Goverdhan Das Partani and Another, reported in (2000) 7 SCC 183 , 9. Sarav Investment & Financial Consultancy Private Limited and Another Vs. Lyods Register of Shipping Indian Office Staff Provident Fund and Another, reported in (2007) 14 SCC 753 , 10. K.Devaraj Vs. T.K. Koya, reported in 2003 CRI.L.J.520, 11. M/s. Shakti Travel and Tours Vs. State of Bihar and Another, reported in 2001(1) CTC 48, 12. S.N. Mukherjee & Another, Vs. NEPC Micon Ltd, reported in 2001(2) MWN (Cr) DCC (Mad) 89 and 13. I.S.P. Solutions India (P) Ltd & others Vs. Kuppuraj, reported in 2006(2) MWN (Cr) (DCC) 18. 4. Per contra, learned Counsel for the respondents made the following submissions : The complaint is in the stage of examination of defence witnesses and already witnesses on the side of the complainant have been examined in chief and have also been cross examined by the petitioner and therefore, at this stage the petition to quash the proceedings should not be entertained. The learned Counsel submitted that on receipt of the statutory notice, three eventualities can happen, which are, a. The drawer of the cheque on receipt of the notice can pay the cheque amount. b. The drawer of the cheque, can receive the notice and maintain silence and in which cases on the expiry of the 15 days from the date of receipt of the notice, the cause of action will arise for filing complaint, and, c. On receipt of such notice, the drawer of the cheque can send a reply denying the liability and refuse to pay the cheque amount and in which case, it is not necessary for the payee to wait for 15 days and thereafter file a complaint and the complaint can be filed immediately after receipt of a reply notice. The learned Counsel further contended that the legislature by enacting provision (c) to Section 138 of the Act only intended to give an opportunity to the drawer of the cheque for 15 days, to pay the cheque amount. If the drawer of the cheque denies the very liability itself and give a reply to that effect, it makes no sense to wait, in case the drawer is not going to pay the cheque amount utilizing the 15 days period. The learned Counsel for the respondent relied upon the following judgment to substantiate his arguments : Sagaya Arokiya Raj Vs. The learned Counsel for the respondent relied upon the following judgment to substantiate his arguments : Sagaya Arokiya Raj Vs. Ganesh Kumar, reported in (2017) 1 MLJ (Crl) 226. 5. The learned Counsel for the petitioner in response to the arguments put forth by the learned Counsel for the respondent, would submit that even in case of denial of liability, the payee has to necessarily wait for 15 days and only thereafter the cause of action will arise to file the complaint. He further submitted that the intention of the legislature must be understood from the very language used in the provision and if the legislature has not specifically provided for contingency, where the drawer has given a reply and denied the liability, this Court cannot read such contingency into the plain language used by the legislature in the said provision. 6. This Court has carefully considered the submission made by either side and also the judgments that have been cited on either side in order to substantiate their arguments. 7. In this case, there is no dispute with regard to the facts that has been enumerated herein above with regard to the issuance of notice, reply given for the said notice, complaint filed and cognizance taken by the Court below. The important point that arises for consideration in this petition is whether in a case where, the drawer of the cheque denies the liability and refuses to pay the cheque amount and issues a reply notice categorically making his stand clear to that effect, even then, should the payee wait for the expiry of 15 days and only thereafter file a complaint as provided in proviso (c) to Section 138 of the Negotiable Instruments Act? 8. What must be remembered is that the dishonour of a cheque can be best described as a regulatory offence that has been created to serve the public interest in ensuring the reliability of those involved in commercial transactions. It is quite evident that the legislative intent was to provide a strong criminal remedy in order to deter the worryingly high incidence of dishonour of cheques. While the possibility of imprisonment up to two years provides a remedy of punitive nature, the provision for imposing a 'fine which may extend to twice the amount of the cheque' serves a compensatory purpose. While the possibility of imprisonment up to two years provides a remedy of punitive nature, the provision for imposing a 'fine which may extend to twice the amount of the cheque' serves a compensatory purpose. The object is to enhance the acceptability of cheques in settlement of liabilities by making the drawer liable for the penalties in case of bouncing of cheques due to insufficient arrangements made by the drawer, with adequate safeguards to prevent harassment of honest drawers. 9. It is true that proviso (c) to Section 138 of the Act, is mandatory and the same is clear from the line of judgments that have been cited by the learned Counsel for the petitioner. There are no two opinions on the ratio laid down in all these judgments. 10. The scheme of giving opportunity to the drawer of the cheque is to pay the cheque amount before permitting his prosecution, no matter whether offence is complete, is unique to Section 138 of the Act. It gives chance even to the dishonest drawer to make, amend and escape prosecution. 11. When the notice is given by the complainant demanding payment, the accused must make payment within a period of 15 days of the receipt of such notice. The words “the drawer of such cheque fails to make the payment” are ostensibly different from saying “the drawer refuses to make payment”. The legislature has thoughtfully used the word “fails” instead of other expressions, as failure can be due to variety of reasons including disability to pay. Therefore, the offence would be complete, when the drawer “fails” to make payment within the stipulated time, whatever be the cause for such failure. 12. The first 12 judgments that have been cited by the learned Counsel for the petitioner, does not deal with the case, where the accused denied the liability and refuses to pay the cheque amount. In all the cases, the complaint has been filed within a period of 15 days provided under Section 138 (c) of the Act, without allowing the statutory period of 15 days provided for the accused to pay the cheque amount. On those facts, the Courts have held that the complaint is not maintainable by virtue of non compliance of Section 138(c) of the Act, since cause of action for filing the complaint has not arisen. There is no quarrel with the proposition of law. 13. On those facts, the Courts have held that the complaint is not maintainable by virtue of non compliance of Section 138(c) of the Act, since cause of action for filing the complaint has not arisen. There is no quarrel with the proposition of law. 13. However, in the present case, the factual scenario is different and here is a case, where the drawer of the cheque has denied the liability in her reply notice. The question is, whether on such denial, cause of action arose to file a complaint for the offence under Section 138 of the Negotiable instruments Act, dehors, the proviso (c) to Section 138. 14. This Court had an occasion to consider the same issue, in the case of Sagaya Arokiya Raj Vs. Ganesh Kumar, reported in (2017) 1 MLJ (Crl) 226. The relevant portions of the judgment are extracted hereunder as follows : “5. Thus, this section gives an opportunity not only to the honest drawer, but also to a dishonest drawer to make amends and to escape from prosecution. So far as this case is concerned, the alleged dishonest drawer did not want to make payment, but has chosen to say “No Payment”. Therefore, there is no purpose in waiting for the completion of 15 days. 6. The contention of the learned counsel for the respondent is that the period of 15 days prescribed is only to enable the petitioner/accused for making the payment and when the object and aim of the particular provision is to give sufficient time for the petitioner/ accused to arrange for repayment of the borrowed amount and when the petitioner has chosen to deny his liability itself, the respondent need not wait for the expiry of 15 days and the cause of action arises from the date on which the petitioner/accused failed to make the payment. In other words, it is contended that the payee need not wait for the completion of 15 days period to lapse when the petitioner/accused did not make any payment and when he denied his liability itself. 6.1. Learned counsel for the respondent relied upon a decision in the case of Rajendran vs. Danapal Pillai (Crl.RC.No.662 of 1994) decided on 17.06.1999; “15. 6.1. Learned counsel for the respondent relied upon a decision in the case of Rajendran vs. Danapal Pillai (Crl.RC.No.662 of 1994) decided on 17.06.1999; “15. In my opinion, the cause of action arises from the date of the denial made even on the receipt of the notice issued under proviso (b) to Section 138 of the Negotiable Instruments Act, because the period of fifteen days is given after receipt of the statutory notice only for the purpose of making the payment, but not for denying the payment and to make the payee wait further till fifteen days lapse from the date of receipt of the said statutory notice. Therefore, once the drawer denies the payment, in spite of the said statutory notice, the payee need not wait for completion of fifteen days to lapse from the date of receipt of the notice or for the mercy of change of mind of the drawer to make payment. If the drawer, in case, changes his mind and makes the payment within the said fifteen days time in spite of his earlier denial, the complaint filed after the denial would become infructuous, but such surmise or assumption or presumption cannot invalidate the cause of action itself, that arises out of the denial of payment by the drawer, even after the receipt of the statutory notice issued under proviso (b) to Section 138 of the Negotiable Instruments Act. Hence, the complaint filed after the denial by the drawer before the expiry of the 15 days from the date of receipt of the statutory notice cannot be stated as premature and, therefore, the order dated August 25, 1994, in Crl. M.P. No. 2077 of 1994 holding the complaint in C.C. No. 2210 of 1993 as premature is hereby set aside.” 7. The decisions relied on by the learned counsel for the petitioner, if understood in the context of the facts of this case, cannot be said that there is no cause of action on the date of filing of the complaint. Hence, the contention that the complaint is not maintainable has to be rejected.” 15. It is also relevant to take not of the judgment in the case of I.S.P. Solutions India (P) Ltd & others Vs. Kuppuraj, reported in 2006 (2) MWN (Cr) (DCC) 18. The facts in the said judgment are captured at paragraph 4 and 6, which are extracted hereunder : “4. It is also relevant to take not of the judgment in the case of I.S.P. Solutions India (P) Ltd & others Vs. Kuppuraj, reported in 2006 (2) MWN (Cr) (DCC) 18. The facts in the said judgment are captured at paragraph 4 and 6, which are extracted hereunder : “4. It is further submitted in the complaint that the cheque, when presented on 17.3.2005 for collection, was returned dishonoured for the reason "Funds Insufficient" on 19.3.2005. Statutory notice was issued on 28.3.2005, calling upon the petitioners/accused to pay the cheque amount of Rs. 2,15,000/- within 15 days from the date of receipt of the legal notice. The Page 671 accused failed to settle the amount, despite the fact that the first accused received the notice on 29.3.2005 and the accused 2 and 3 returned it unclaimed. The accused sent a false reply through their counsel on 11.4.2005. 6. The petitioners/accused have alleged in the quash petition that the first accused was served with statutory notice only on 29.3.2005 and the 15 days time to settle the amount as contemplated under Section 138(c) of the Negotiable Instruments Act, expires only on 13.4.2005”. 16. The ratio in the said judgment is found at paragraph 17, which is extracted hereunder : “17. Here in this case, the complaint was preferred three days short of the time to be availed by the accused to settle the dues, but the learned District Munsif-cum-Judicial Magistrate, Mettupalayam, has taken cognizance of the complaint presented by the complainant well after the expiry of the 15 days time granted under the statutory notice to settle the amount due to the Page 673 complainant. So it is found that the cognizance of the complaint has been taken only after the expiry of 15 days time granted to the drawer.” 17. This judgment relied upon by the petitioner is also distinguishable on facts since in the said judgment, the learned Magistrate had taken cognizance after expiry of 15 days. However, in the present case, the learned Magistrate has taken cognizance of the complaint, within 15 days. Therefore, the ratio in the above said judgment will also be of no use while deciding the case on hand. 18. This Court after thorough search was able to lay its hands on the judgment in V.Suresh Kumar Vs. However, in the present case, the learned Magistrate has taken cognizance of the complaint, within 15 days. Therefore, the ratio in the above said judgment will also be of no use while deciding the case on hand. 18. This Court after thorough search was able to lay its hands on the judgment in V.Suresh Kumar Vs. C.sreekrishnan, reported in 1995 (83) Comp Cas 103 (Mad), wherein this Court had an occasion to deal with the case where the factual scenario is more akin to the present case. The facts of the case are captured in paragraph 3 as follows : “3. ... ... ... he re-presented the cheque on February 17, 1993, but it was returned on February 22, 1993, with an endorsement "insufficient balance". The petitioner sent a notice on March 6, 1993, to the respondent, in which the respondent was given 15 days' time to repay the amount. The respondent has received the notice on March 8, 1993, and sent a reply on March 11, 1993, containing false averments. Even after the expiry of 15 days from the date of receipt of the notice, the respondent did not pay the amount. Thus, he has committed an offence under section 138 of the Negotiable Instruments Act and hence the complaint.” 19. The discussion and the ratio in the said judgment are found at paragraphs 5 and 6, which are extracted hereunder : “5. There is apparent conflict of views in the judgment 5. In para 7 of the complaint, it is stated that the cheque was re-presented on February 17, 1993, and it was returned on February 22, 1993, with an endorsement of "insufficient of balance". The respondent had issued a notice on March 6, 1993. It was received by the petitioner on March 8, 1993. He sent a reply on March 11, 1993, containing false averments. His complaint was filed on April 22, 1993. On the above facts, Mr. P. Kulandaivelu would submit that so far as the accused is concerned, the offence was committed on March 11, 1993, when he sent a reply denying the allegations. He would further submit that when there is a specific denial by the accused, from the point of the accused, the cause of action would arise on the very same date of denial and not the expiry of 15 days provided under section 138(c) of the Negotiable Instruments Act. He would further submit that when there is a specific denial by the accused, from the point of the accused, the cause of action would arise on the very same date of denial and not the expiry of 15 days provided under section 138(c) of the Negotiable Instruments Act. To consider the submission, section 138(c) needs extraction and it reads as follows : "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 - ...... (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 receipt of the said notice." Section 142(b) also needs extraction for the purpose of considering his submission and it reads as follows : "142. Cognizance of offences. - Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),.....(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." As per section 142(b) such complaint should be filed within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138. As per clause (c) to proviso to section 138, nothing contained in this section shall apply unless 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. So, the cause of action would arise only after the expiry of fifteen days of the receipt of the notice. It does not say that it would arise if there was a denial earlier, on the date of such denial. Moreover, even after sending notice, denying liability to pay the amount, within 15 days of receipt of the notice, the accused, can at any time change his mind and make payment and avoid prosecution. So, unless and until the period expires, the cause of action does not arise, for laying the complaint. Taking that view of the Matter, I am unable to accept the submission made by Mr. P. Kulandaivelu that the cause of action would arise from the very date of denial of the accused. 6. Mr. P. Kulandaivelu would refer to section 469(a) which reads as follows : "469. Commencement of the period of limitation. - (1) The period of limitation, in relation to an offender, shall commence, (a) on the date of the offence; or. . ." and that in the instant case, the offence would be deemed to have been committed on the date of the denial itself. I am unable to accept this submission because of the clear language of clause (c) of the proviso to section 138 and clause (b) of the proviso to section 142, which I have extracted above.” 20. There is apparent conflict of views in the judgment referred supra and reported in 2017 (1) MLJ (Crl) 226 and judgment referred herein above, reported in 1995 (83) Comp Cas 103 (Mad). 21. One more important issue that needs to be answered in cases of this nature is that what happens if the drawer of the cheque initially denies the liability and issues a reply notice and thereafter changes his mind to pay the cheque amount within a period of 15 days provided under Section 138 (c) of Negotiable Instruments Act? 22. 21. One more important issue that needs to be answered in cases of this nature is that what happens if the drawer of the cheque initially denies the liability and issues a reply notice and thereafter changes his mind to pay the cheque amount within a period of 15 days provided under Section 138 (c) of Negotiable Instruments Act? 22. Yet another question that needs to be answered is, where a legislature specifically provides for awaiting period of 15 days for the cause of action to arise to file a criminal complaint under Section 138 of the Act, in a plain and simple language, whether the Court can read something into it and cut short the 15 days period, more particularly, when the penal statute always requires strict interpretation. 23. In view of conflicting decisions of two learned single Judges of this Court on the same issue and in view of the importance of resolving the important question of law that has arisen for consideration, this Court deems it fit to place the matter before a Division Bench in order to resolve the conflict and to come out with an authoritative pronouncement. 24. For the reasons stated above, this Court directs the Registry to place this matter before the Hon’ble Administrative Judge, so as to enable the Hon’ble Administrative Judge to consider constituting a Bench in order to hear the issue and to resolve the conflict and make an authoritative pronouncement on the issue.