2016 (12) TMI 1883 - HC - Indian Laws

Dishonor of Cheque - insufficiency of fund - discharge of existing liability or not - time limitation - part payment of cheque is enough to defeat the entire cause of action or not? - bar under Section 29 of the Criminal Procedure Code - Whether the demand notice was defective as because a part payment to the tune of Rs. 1,00,000/- was accepted and that is the departure from the cause of action itself? - HELD THAT - This Court is of the considered view that simply because Rs. 1 lakh was received by the complainant after issuance of statutory notice is enough to deviate from the cause of action - this Court is satisfied that simply because of Rs. 1 lakh was paid by the accused/revisionist after issuance of the statutory notice that is not enough to take away the right of the holder of the cheque to enforce the cause of action regarding non-payment of the residue amount. Whether the complaint is barred by limitation? - HELD THAT - In the instant case before this Court the payment of Rs. 1 lakh was made on 11.03.2000 and according to this court it is the starting time of the period of limitation. The complaint was filed within three days of that that is on 14.03.2000 and as such the complaint was filed perfectly within time. This court reiterates that the complaint is not hit by the period of limitation as prescribed under Sections 138 and 142 of the Act of 1881 - It may not be out of place to mention that it is the admitted position that the relationship between the parties was that of client and advocate and naturally such relationship was fiduciary one and there was nothing wrong on the part of the complainant when he advanced Rs. 2,85,000/-. Whether the cheque was issued in discharge of existing liability? - HELD THAT - Regarding the applicability of Section 8 and Section 13 of the West Bengal Moneylenders Act, this Court is of the view that the said act has not barred money lending but it has only regulated the money lending. Thus, even if one person who has no money lending licence cannot be debarred from granting any accommodation loan to his friend or other person on him he has confidence. The opposite party took the accommodation loan and he now cannot take the shelter of the West Bengal money lenders' act to defraud the person who accommodated him - this issue is answered in favour of the appellant. Whether the part payment of cheque is enough to defeat the entire cause of action? - HELD THAT - This court has already answered the issue that part payment cannot defeat the entire cause of action. Thus, this point is answered in favour of the appellant. Whether the learned Trial Court had authority to impose the fine amount to the tune of Rs. 2,85,000/- in view of the bar under Section 29 of the Criminal Procedure Code? - HELD THAT - It is true that as per Section 29 of the Code of Criminal Procedure, 1993 no Judicial Magistrate of the first class can impose any fine exceeding Rs. 10,000/- but in the instant case before this court the learned Judicial Magistrate imposed fine amount to the tune of Rs. 2,85,000/- and according to this court the learned trial court exceeded its jurisdiction to that extent. The question now is whether the entire finding of the trial court is to be set aside for such careless approach. This superior court has inherent power under Section 482 of the Act of 1973 to cure any irregularity to prevent abuse of process of any court or to secure the ends of justice - It is true that as an advocate who has great esteem in the society that the said accused/opposite party would not have troubled his client who accommodated him during his hard days for as many as 17 long years (from 30.12.1999 till this date) and this court prefers to reduce the substantive sentence to make it simple imprisonment for ten days but at the same time the fine amount is being converted to compensation under Section 357 (3) of the Code of 1973 and the amount is enhanced from Rs. 2,85,000/- to 3,70,000/- in default of such payment the accused/opposite party will suffer simple imprisonment for further one year. The substantive sentence is reduced from 4 months Simple Imprisonment to 10 days. The fine is converted as compensation but the amount is increased to Rs. 3,70,000/- being double of the amount of Rs. 1,85,000/-. If this amount is not paid then this opposite party accused will have to suffer further Simple Imprisonment for one year more - Such payment of Rs. 3,70,000/- (three lakhs seventy thousand) is to be deposited by the opposite party before the learned trial court by way of demand draft in the name of the complainant appellant within one month from this day. The opposite party/accused must surrender before the learned trial court to serve out the sentence within one month from this day. Failure to comply with this order will entitle the learned trial court to issue warrant of arrest against this accused/opposite party. This criminal revisional application succeeds in part.

Summary

Issues Involved:
1. Whether the demand notice was defective due to part payment of Rs. 1,00,000/-.
2. Whether the complaint is barred by limitation.
3. Whether the cheque was issued in discharge of existing liability.
4. Whether the part payment of cheque is enough to defeat the entire cause of action.
5. Whether the learned Trial Court had authority to impose the fine amount of Rs. 2,85,000/- under Section 29 of the Criminal Procedure Code.

Issue-wise Detailed Analysis:

1. Defective Demand Notice:
The court examined whether the acceptance of Rs. 1,00,000/- after issuing the statutory notice deviated from the cause of action. It was concluded that part payment after the issuance of the statutory notice does not absolve the accused from the legal enforceable liability. The court relied on precedents from other High Courts and determined that the right to enforce the cause of action regarding non-payment of the remaining amount remains intact.

2. Limitation Period:
The court referred to the decision of the Apex Court in Tameeshwar Vaishnav, which clarified the calculation of the limitation period under Sections 138 and 142 of the Negotiable Instruments Act. The complaint was filed within three days of the part payment on 11.03.2000, thus within the prescribed period. Therefore, the complaint was not barred by limitation.

3. Existing Liability:
The court emphasized the presumption under Section 139 of the Negotiable Instruments Act that the cheque was issued in discharge of existing liability. The burden to disprove this presumption lies on the drawer of the cheque. The part payment of Rs. 1,00,000/- by the accused after receiving the notice indicated an acknowledgment of the existing liability. The court found no convincing evidence to counter the claim that the cheque was issued in discharge of an existing liability.

4. Part Payment and Cause of Action:
The court reiterated that part payment does not defeat the entire cause of action. The decision from the Kerala High Court in Shiju K. was not accepted, and the court maintained that the right to enforce the cause of action remains even after part payment.

5. Authority to Impose Fine:
The court acknowledged that under Section 29 of the Criminal Procedure Code, a Judicial Magistrate of the first class cannot impose a fine exceeding Rs. 10,000/-. However, the trial court had imposed a fine of Rs. 2,85,000/-. The court used its inherent powers under Section 482 of the Criminal Procedure Code to correct this irregularity. The substantive sentence was reduced to simple imprisonment for ten days, and the fine was converted to compensation, increased to Rs. 3,70,000/-.

Conclusion:
The criminal revisional application succeeded in part. The finding of guilt was reaffirmed, the substantive sentence was reduced, and the fine was converted to compensation, increased to Rs. 3,70,000/-. The accused was directed to deposit this amount within one month and surrender to serve the sentence, failing which a warrant of arrest would be issued. The lower court records were to be transmitted for necessary action.