2020 (1) TMI 1074 - HC - Indian Laws

Dishonor of Cheque - when the offence is complete- offence punishable under section 138 of NI Act - scope of Section 143A of the N.I. Act - retrospective or prospective amendment - HELD THAT - Section 143A of the N.I. Act came in the statute book on 01.9.2018. Admittedly, the cheques in question were issued on different dates ranging from 27.4.2018 to 12.6.2018 i.e. prior to amendment. Even the return memo given by the banker of the petitioner intimating that the cheques issued by the petitioner cannot be honoured, is dated 06.7.2018. The statutory notice is given by the respondent on 26.7.2018 and it was received by the petitioner on 27.7.2018. The petitioner was to pay the amount as per the notice on or before 11.8.2018. Till 11.8.2018 it cannot be said that the offence is completed. The offence will be completed only after 11.8.2018. Thus, the offence is committed on 11.8.2018. The amendment is brought in the Statute book on 01.9.2019 i.e. subsequent to commitment of the offence. In view of this factual position, the learned Magistrate has committed a mistake in law in allowing the application. Therefore, the writ petition deserves to be allowed. Petition allowed.

Summary

Issues:
Challenge to order directing deposit of 20% of cheque amount as compensation.

Analysis:
The judgment involves a challenge to an order passed by a Judicial Magistrate directing the petitioner to deposit 20% of the cheque amount as compensation in a Summary Criminal Case. The complainant alleged that the petitioner issued nine cheques for various amounts, which were returned by the banker with an "Exceed Arrangement" endorsement. The complainant sent a statutory notice, and upon non-payment by the petitioner, lodged a complaint under Section 138 of the Negotiable Instruments Act, 1881.

The respondent initially moved an application under Section 143A of the N.I. Act, seeking direction for the petitioner to deposit 20% of the cheque amount. This application was rejected due to the petitioner's plea not being recorded. Subsequently, another application (Exh.24) was filed after recording the plea, which was contested by the petitioner. However, the Magistrate allowed the application on the grounds of the amendment to the N.I. Act, leading to the writ petition challenging this decision.

The petitioner argued that Section 143A of the N.I. Act is prospective and cannot be applied retrospectively to offences committed before its introduction. Citing the case of G.J. Raja v. Tejraj Surana, the petitioner contended that the amendment could not be invoked for offences committed prior to its enactment. The Supreme Court in the mentioned case held that Section 143A is prospective and can only be applied to offences committed after its introduction, leading to the conclusion that the Magistrate erred in allowing the application (Exh.24).

Considering the timeline of events where the cheques were issued before the amendment, the offence was completed after the statutory notice deadline, and the amendment came into effect post the offence date, the Court found that the Magistrate's decision was a mistake in law. Consequently, the writ petition was allowed, the Magistrate's order was quashed, the application (Exh.24) was rejected, and directions were given to expedite the trial. The judgment emphasizes the prospective nature of Section 143A and its application to offences committed post its enactment.