1990 (3) TMI 373 - HC - Indian Laws

Summary

Issues Involved:

1. Jurisdiction of the proceedings under the amended Negotiable Instruments Act, 1881.
2. Retrospective application of the Amendment Act of 1988.
3. Interpretation of Section 138 and Section 141 of the Negotiable Instruments Act, 1881.

Detailed Analysis:

1. Jurisdiction of the Proceedings:

The petitioners challenged the jurisdiction of the proceedings initiated under Section 138, read with Section 141, of the Negotiable Instruments Act, 1881. They argued that the proceedings were without jurisdiction as the Amendment Act of 1988, which introduced these sections, came into force on April 1, 1989, whereas the alleged offence (issuance and dishonour of cheques) occurred before this date. The cheques were issued on January 28, 1989, and February 10, 1989, and were dishonoured on March 13, 1989, and again on April 13, 1989, after being re-presented. The complainant issued a notice on April 27, 1989, demanding payment within fifteen days, which was not met by the petitioners.

2. Retrospective Application of the Amendment Act of 1988:

The court examined whether the Amendment Act of 1988 had retrospective operation. The general principle is that unless a contrary intention appears, an enactment is presumed not to have retrospective operation. Article 20(1) of the Constitution prohibits convicting a person for an act that was not an offence at the time it was committed. The court referred to the European Convention of Human Rights and various judicial precedents, which support the principle that an act or omission is not criminal unless forbidden by law at the time it was done. The court concluded that the Amendment Act of 1988, which created a new offence, does not have retrospective operation. Therefore, the accused cannot be prosecuted under Sections 138 and 141 for acts committed before April 1, 1989.

3. Interpretation of Section 138 and Section 141 of the Negotiable Instruments Act, 1881:

Section 138 stipulates that dishonour of a cheque for insufficiency of funds constitutes an offence, provided certain conditions are met, including the cheque being presented within six months, notice being given to the drawer within fifteen days of dishonour, and failure to make payment within fifteen days of receiving the notice. Section 141 relates to offences by companies. The court noted that all ingredients of the offence must occur after the Amendment Act came into force. Since the cheques were issued and initially dishonoured before April 1, 1989, the provisions of the Amendment Act could not be applied retrospectively to prosecute the petitioners. The court emphasized that the substantive law creating the offence must be in force at the time the acts complained of were committed.

Conclusion:

The court allowed the application, quashing the impugned proceedings. It held that the provisions of Sections 138 and 141 of the Negotiable Instruments Act, 1881, as amended by the Amendment Act of 1988, could not be applied retrospectively to acts committed before April 1, 1989. The judgment also applied to another application being Criminal Revision No. 2277 of 1989.