2007 (12) TMI 528 - SC - Indian Laws

Dishonour of cheque - insufficiency of funds - Cognizance of offences - HELD THAT - All laws that affect substantive rights generally operate prospectively and there is a presumption against their retrospectivity if they affect vested rights and obligations, unless the legislative intent is clear and compulsive. Such retrospective effect may be given where there are express words giving retrospective effect or where the language used necessarily implies that such retrospective operation is intended. There is nothing in the amendment made to Section 142(b) by the Act 55 of 2002 that the same was intended to operate retrospectively. In fact that was not even the stand of the respondent. Obviously, when the complaint was filed on 28.11.1998, the respondent could not have foreseen that in future any amendment providing for extending the period of limitation on sufficient cause being shown would be enacted. That being so the High Court's view is clearly unacceptable. The impugned order of the High Court is set aside. The proceeding pursuant to respondent's complaint i.e. Complaint in the Court of JMIC, Chandigarh, is quashed. The appeal is allowed.

Summary

Issues:
The judgment deals with the application filed under Section 482 of the Code of Criminal Procedure, 1973 challenging the order passed by a Single Judge of the Punjab and Haryana High Court dismissing the petition for quashing a complaint filed under Section 138 of the Negotiable Instruments Act, 1881.

Section 138 of the Negotiable Instruments Act:
The complaint alleged that a cheque issued by the appellant was dishonored twice, and notices were duly served. The appellant filed an application for discharge under Section 245 of the Cr.P.C., which was dismissed by the Judicial Magistrate. The High Court dismissed the Section 482 application, stating that the proviso of Section 142(b) empowered the court to extend the limitation period. The appellant argued that the amendment by Act 55 of 2002 did not apply to the case as events occurred before 2002, and the respondent did not claim the case was covered by the amendment.

Proviso of Section 138 and Section 142 of the Act:
The proviso of Section 138 sets conditions for dishonor of cheques, and Section 142 deals with cognizance of offenses under Section 138. The proviso did not restrict the payee from presenting a dishonored cheque successively during its validity. The General Clauses Act, 1897, was referred to, highlighting that laws affecting substantive rights usually operate prospectively, unless clear language implies retrospective effect.

Retrospective Effect of Amendments:
The judgment emphasized that there was no intention for the amendment to Section 142(b) by Act 55 of 2002 to operate retrospectively. The respondent did not claim such retrospective application. As the complaint was filed before the amendment, the High Court's view that the proviso empowered the court to extend the limitation period was deemed unacceptable.

Decision:
The Supreme Court set aside the High Court's order, quashing the proceeding based on the respondent's complaint. The appeal was allowed in favor of the appellant.