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2021 DIGILAW 69 (JHR)

M. Narsingh Rao v. State of Jharkhand

2021-01-15

SHREE CHANDRASHEKHAR

body2021
ORDER : 1. At the instance of the petitioner, Complaint Case bearing No. C/1-2673 of 2010 (T.R. No. 926 of 2013) was instituted against opposite party no. 2 under Section 138 of the Negotiable Instruments Act for failing to discharge the debt of Rs. 92,000/- which he had availed of from the petitioner on 01.05.2010, by way of friendly loan. On 02.08.2010, opposite party no. 2 issued a cheque bearing no. 611592 in favour of the petitioner drawn on Canara Bank which on presentation was dishonored with the endorsement due to “insufficient funds” vide endorsement dated 05.08.2010. The petitioner sent a legal notice by registered post on 18.08.2010 requiring opposite party no. 2 to make payment of the cheque amount. The legal notice issued by the petitioner was received by opposite party no. 2 on 19.08.2010, however, he did not make payment to the petitioner and therefore, he has instituted the complaint case on 03.09.2010. In the trial, he has examined himself as CW-1 and on closure of his evidence the statement of opposite party no. 2 was recorded by the Court on 01.03.2013. In defence, the accused/O.P. No. 2 has examined himself and denied his liability of any legally payable debt to the petitioner. He has produced in evidence deposit-slip of loan account bearing No. 0995741002135 dated 16.08.2011 for Rs. 30,000/-. The petitioner-complainant has also led in evidence original cheque dated 02.08.2010, cheque return memo, legal notice dated 18.08.2010 and the postal receipt with acknowledgment card. 2. The learned trial Judge has found the opposite party no. 2 guilty and sentenced him to R.I. for one year under Section 138 of the Negotiable Instruments Act and further directed him to make payment of compensation amount of Rs. 92,000/- with a default stipulation to undergo S.I. for six months, vide judgment dated 16.09.2013 passed in T.R. No. 926 of 2013. The learned Appellate Court has however interfered with the judgment passed in T.R. No. 926 of 2013 on the ground that the complaint case was instituted before the statutory time for making payment of any debt or other liability by the drawer of the cheque. 3. In Criminal Appeal No. 270 of 2013, the Appellate Court has appreciated the evidence and materials on record in the following manner: 10. 3. In Criminal Appeal No. 270 of 2013, the Appellate Court has appreciated the evidence and materials on record in the following manner: 10. The facts revealing the essential ingredients of maintaining the case u/s 138 N.I. Act can be seen at a glance: Date of issuance of cheque in question Date of receiving of information about dishonour of cheque Date of sending legal notice Date of receiving registered post containing legal notice Date of Filing case 02.08.2010 05.08.2010 18.08.2010 19.08.2010 03.09.2010 Ext-1 Ext-2/2 Ext-4 Ext-5 11. It is apparent from above chart that the instant case was filed on 03.09.2010 after service of notice on 19.08.2010. It means 12 days in August +3 days in September i.e. it was filed just on 15th days only, meaning thereby the time gap between filing of case from service of notice is => (03.09.2010) - (19.08.2010) = 14 days. Thus, without giving complete 15 days to accused-appellant for making payment of the cheque amount, this case was filed on just 15th day from date of service of notice. In other words, cause of action had not come into existence at the time of filing case because complete 15 days [till 12 night of 3rd September 2010] had to be given to accused-appellant to make the payment and on his failure to make payment within stipulated time, the offence can only be said to have been committed. Had the case been filed on 04.09.2010, it would surely have been maintainable. 12. The settled law on this issue by the Hon'ble Supreme Court be as follows: In a case reported in JLJR 2014 (SC) 163 the Hon'ble Supreme Court have pleased to observe. “After the sending of the notice, 15 days time is to be given to the notice from the date of receipt of the said notice to make the payment, if notice fails to make the payment, the offence can be said to have been committed and in that event cause of action for filing the complaint would accrue to the complainant.” 13. Hence, it is unequivocally clear that appellant was not given the complete statutory period of 15 days since receipt of legal demand notice for the payment of cheque amount and hence the case at hand was not maintainable ab initio [since very beginning] as the important ingredient, which is essentially required to make/convert this type of cases of civil nature into the penal offence or takes the shape of penal offence, punishable u/s 138 N.I. Act, was not fulfilled in the case at hand. Thus no cause of action had come into existence for penal offence u/s 138 N.I. Act till filing of the case at hand. 14. Considering the facts and circumstances, I am of the considered view that the view taken by learned lower court is not a plausible view for passing the order of conviction. In the light of mandatory statutory provision of law interference with the order of conviction passed by learned lower court is warranted accordingly the judgment of conviction is hereby set aside and appellant is hereby acquitted and discharged from the liability of his bail bond. Sureties are also discharged. 4. Mr. Jitendra Nath Upadhyay, the learned counsel for the petitioner has pressed hard upon the Court to submit that the Appellate Court while calculating the period of 15 days has excluded the date of receipt of the legal notice and perhaps miscalculated the total number of days in the month of August which shall be 31 days and if counted the total number of days after receipt of the legal notice by opposite party no. 2 the complaint was filed as prescribed under the Negotiable Instruments Act. The learned counsel for the petitioner has relied on the following judgments to buttress his contention that the complaint case was maintainable and not filed prematurely: (i) Bajrang Factory Ltd. vs. University of Calcutta, (2007) 7 SCC 183 (ii) Subodh S. Salaskar vs. Jayprakash M. Shah, (2008) 13 SCC 689 5. Per contra, Mr. Samir Kumar Lall, the learned counsel for opposite party no. 2 has relied on the judgment in Sarav Investment and Financial Consultancy (P) Ltd. vs. Llyods, Register of Shipping, Indian Office, Staff Provident Fund, (2007) 14 SCC 753 wherein the Hon'ble Supreme Court has held as under: “16. Section 138 of the Act contains a penal provision. It is a special statute. It creates a vicarious liability. 2 has relied on the judgment in Sarav Investment and Financial Consultancy (P) Ltd. vs. Llyods, Register of Shipping, Indian Office, Staff Provident Fund, (2007) 14 SCC 753 wherein the Hon'ble Supreme Court has held as under: “16. Section 138 of the Act contains a penal provision. It is a special statute. It creates a vicarious liability. Even the burden of proof to some extent is on the accused. Having regard to the purport of the said provision as also in view of the fact that it provides for a severe penalty, the provision warrants a strict construction. Proviso appended to Section 138 contains a non-obstante clause. It provides that nothing contained in the main provision shall apply unless the requirements prescribed therein are complied with. Service of notice is one of the statutory requirements for initiation of a criminal proceeding. Such notice is required to be given within 30 days of the receipt of the information by the complainant from the bank regarding the cheque as unpaid. Clause (c) provides that the holder of the cheque must be given an opportunity to pay the amount in question within 15 days of the receipt of the said notice. Complaint petition, thus, can be filed for commission of an offence by a drawee of a cheque only 15 days after service of the notice. What are the requirements of service of a notice is no longer res integra in view of the recent decision of this Court in C.C. Alavi Haji vs. Palapetty Muhammed, (2007) 6 SCC 555 .” 6. The judgment in Subodh S. Salaskar vs. Jayprakash M. Shah and Another, (2008) 13 SCC 689 relied upon by Mr. Jitendra Nath Upadhyay, the learned counsel for the petitioner is on the issue whether amendment inserted by way of proviso in Section 142(b) of the Negotiable Instruments Act is retrospective in nature - an issue not involved in the present case. The requirement of giving of notice to the drawer of the cheque is a clear departure from the rule of criminal law which does not require a notice to the proposed accused before filing a complaint [Refer: C.C. Alavi Haji vs. Palapetty Muhammed, (2007) 6 SCC 555 ]. The requirement of giving of notice to the drawer of the cheque is a clear departure from the rule of criminal law which does not require a notice to the proposed accused before filing a complaint [Refer: C.C. Alavi Haji vs. Palapetty Muhammed, (2007) 6 SCC 555 ]. In view of section 12(1) of the Limitation Act, the date on which cause of action has accrued has to be excluded for reckoning the period of limitation for filing a complaint under Section 138 of N.I. Act [Refer: Saketh India Ltd. vs. India Securities Ltd. (1999) 3 SCC 1 ]. 7. Section 138 of Negotiable Instruments Act reads as under: “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 2[two] years 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 payment of the said amount of money by giving a notice in writing, to the drawer of the cheque 3[within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid. (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.” 8. In K. Bhaskaran vs. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 , the Hon'ble Supreme Court has observed on the importance of service of notice upon drawer of cheque, thus: “21. In Maxwell's Interpretation of Statutes, the learned author has emphasised that “provisions relating to giving of notice often receive liberal interpretation” (vide p. 99 of the 12th Edn.). The context envisaged in Section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the legislature. The words in clause (b) of the proviso to Section 138 of the Act show that the payee has the statutory obligation to “make a demand” by giving notice. The thrust in the clause is on the need to “make a demand.” It is only the mode for making such demand which the legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is despatched his part is over and the next depends on what the sendee does.” 9. In yet another judgment in Kamlesh Kumar vs. State of Bihar, (2014) 2 SCC 424 the Hon'ble Supreme Court has referred to the following observations in MSR Leathers vs. S. Palaniappan, (2013) 1 SCC 177 on the requirements in law which must be fulfilled before a proceeding under Section 138 is initiated: 10. In MSR Leathers this Court analysed the provisions of Sections 138 and 142 of the N.I. Act in the following manner: “12. The proviso to Section 138, however, is all-important and stipulates three distinct conditions precedent, which must be satisfied before the dishonour of a cheque can constitute an offence and become punishable. In MSR Leathers this Court analysed the provisions of Sections 138 and 142 of the N.I. Act in the following manner: “12. The proviso to Section 138, however, is all-important and stipulates three distinct conditions precedent, which must be satisfied before the dishonour of a cheque can constitute an offence and become punishable. The first condition is that the cheque ought to have 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. The second condition is that the payee or the holder in due course of the cheque, as the case may be ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. The third condition is that the drawer of such a cheque should have failed to make 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. It is only upon the satisfaction of all the three conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and (c) thereof that an offence under Section 138 can be said to have been committed by the person issuing the cheque. 13. Section 142 of the Negotiable Instruments Act governs taking of cognizance of the offence and starts with a non-obstante clause. It provides that no court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or as the case may be, by the holder in due course and such complaint is mode within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138. In terms of clause (c) to Section 142, no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class is competent to try any offence punishable under Section 138. 14. In terms of clause (c) to Section 142, no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class is competent to try any offence punishable under Section 138. 14. A careful reading of the above provisions makes it manifest that a complaint under Section 138 can be filed only after cause of action to do so has accrued in terms of clause (c) of the proviso to Section 138 which, as noticed earlier happens no sooner than when the drawer of the cheque fails to make the payment of the cheque amount to the payee or the holder of the cheque within 15 days of the receipt of the notice required to be sent in terms of clause (b) of the proviso to Section 138 of the Act.” (Emphasis supplied) 10. In Kamlesh Kumar the Hon'ble Supreme Court has clarified that the period of limitation is not to be counted from the date when the cheque in question was presented or the legal notice is issued to the drawer of the cheque. 11. From the aforesaid judgments of the Hon'ble Supreme Court, one can gather that the date when legal notice was received by the drawer of the cheque has to be excluded while counting 15 days' period which must be clearly available to the drawer of the cheque for making payment of the cheque amount. In the present case, the legal notice was received by opposite party no. 2 on 19.08.2010 and the complaint case was instituted on 03.09.2010. Apparently, on the fifteenth day itself after the receipt of legal notice by opposite party no. 2 the petitioner has instituted the complaint case. In the aforesaid facts, I find that the Appellate Court was quite right in holding that the complaint case was filed prematurely. 12. In view of the aforesaid discussions, I find no reason to interfere in the matter and accordingly, Criminal Revision No. 62 of 2015 is dismissed. Revision dismissed.