2013 (9) TMI 1188 - SC - Indian Laws

Cheque dishonoured u/s-138 Negotiable Instruments Act 1881 - Instruction of stop payment by the Managing Director - respondents offered to make cheque payment - Refusal by Appellant to accept the payment - Quashing of complaint by the High Court - failure to appear without sufficient cause on date - Refusal of High Court to recall that order - appeal against rejection of the recall application - HELD THAT - these appeals are directed against the order of the High Court wherein it refused to recall the order by which the complaint had been quashed. The appellant could not furnish any sufficient cause for their non-appearance on the date of quashing of complaint and by taking a technical view of the matter these appeals could have been rejected even on the ground of non-sufficiency of material furnished by the appellant in the High Court against refusal to recall the order. But considering the fact that the appellant would be deprived of their due amount of dishonoured cheque Court considered just and appropriate to direct the respondents to make the payment for the sake of substantial justice to the complainant-appellant as also in view of the analogous appeal whereby the High Court had allowed the petition filed by the respondents herein under Section 482 of the Code of Criminal Procedure 1973 and was pleased to quash the proceedings against them. Therefore Court thought it appropriate to direct the respondents to make the payment towards the cheque in which stop payment instructions had been issued. Besides this the appeal is time barred by 359 days for which also there is no justification. On the one hand the appellant has sought to impress upon this Court to take a technical view of the matter by urging that the respondents had not made the payment during the 15 days notice period even though that had been offered at a later stage but expecting Court to condone the huge delay of 359 days in filing the appeal which is rejected outright. The decision on this case NK. WAHI VERSUS SHEKHAR SINGH ORS 2007 (3) TMI 671 - SUPREME COURT followed. In the result appeal stands dismissed on merit and another appeal for recall of application is dismissed on the ground of delay as also on merits subject to the direction of payment to the appellant by the respondents.

Summary

Issues:
Challenge to High Court order quashing complaint under Section 138 of Negotiable Instruments Act, 1881; Recall of ex-parte order by High Court; Justification for pursuing complaint despite offer of payment by accused; Interpretation of primary object of Negotiable Instruments Act, 1881; Equitable relief for appellant; Time-barred appeal.

Analysis:
1. Challenge to High Court Order: The appellant challenged the High Court's order quashing the complaint under Section 138 of the Negotiable Instruments Act, 1881. The accused had issued a cheque that was dishonored due to 'stop payment' instructions by the Managing Director, leading to the complaint by the appellant. The respondents filed a petition under Section 482 of the Cr.P.C. for quashing the complaint, offering to pay the cheque amount of Rs. 2,50,000, which was accepted by the High Court.

2. Recall of Ex-parte Order: The High Court's order quashing the complaint was passed ex-parte, leading the appellant to file an application for recall. However, the High Court dismissed the recall application citing non-compliance with the legal test set by the Supreme Court in a previous case. The appellant challenged this order in the Supreme Court, seeking a recall of the order quashing the complaint.

3. Justification for Pursuing Complaint: The respondents offered to pay Rs. 2,50,000 to the appellant, but the appellant refused, insisting on pursuing the complaint under the Negotiable Instruments Act, 1881. The appellant argued that the Act aims to ensure the efficiency and value of negotiable instruments by making the accused honor the instrument, emphasizing the penal nature of the Act.

4. Equitable Relief: The Supreme Court, while acknowledging the appellant's right to pursue the complaint, directed the respondents to pay Rs. 5 lakhs to the appellant as a lump sum amount, including interest and compensation. This decision was based on principles of equity, justice, and fair play, ensuring substantial justice to the appellant despite the technicalities of the case.

5. Time-barred Appeal: The Supreme Court noted that the appeal was time-barred by 359 days, highlighting the appellant's request for a technical view regarding the respondents' payment offer. Despite the delay, the Court dismissed the appeal on merit, emphasizing the importance of timely legal actions and rejecting the appeal outright.

In conclusion, the Supreme Court dismissed the appeals challenging the High Court's order on merit and due to delay, while directing the respondents to pay Rs. 5 lakhs to the appellant for the dishonored cheque. The judgment balanced legal principles with equitable considerations, ensuring justice for the appellant while upholding procedural requirements.