2021 (6) TMI 519 - HC - Indian Laws

Dishonor of Cheque - Restoration of case - Presumption in favour of holder - Section 139 of NI Act - HELD THAT - The purpose of introducing Section 138 of the N.I. Act was to bring sanctity in commercial transactions. The negotiable instruments like cheques started losing their creditability in not being honoured on presentment. The legislature found that an action in civil court for collection of the negotiable proceeds like a cheque was defeating the very purpose of recognizing the negotiable instruments as speedy vehicle of commerce - It is now well settled that even if the cheque gets dishonoured with endorsement Payment stopped by drawer and there were insufficient funds on the date when the cheque was presented it amounts to an offence under Section 138 of the N.I. Act. When no prejudice has been caused to the petitioners herein by restoring the complaint to its original number it does not lie in the mouth of the petitioners to raise objections/pleadings that there was a delay on behalf of the complainant in filing a petition under Section 397 Cr.P.C for restoration of complaint which has been dismissed on non-appearance of the complainant at a pre-evidence stage. The present petition is completely bereft of bonafides and merits. It is apparent that the petitioners do not want to contest the case on merits - The petitioners herein had yet not been summoned and as held by the Division Bench, no prejudice will be caused to the petitioners herein if the complaint is restored. The complaint is yet to be heard on merits. The petition is dismissed along with the pending application.

Summary

Issues:
1. Dismissal of complaint for non-appearance
2. Filing of revision petition under Section 397 Cr.P.C
3. Delay in filing the revision petition
4. Application for condonation of delay
5. Legal provisions under Negotiable Instruments Act

Issue 1: Dismissal of complaint for non-appearance
The respondent filed a complaint against a dishonored cheque, leading to a legal notice and subsequent complaint filing. Due to non-appearance of the respondent, the complaint was dismissed on various dates. The respondent later filed a revision petition seeking restoration of the complaint, citing reasons for non-appearance, including being in custody and lockdown due to the COVID-19 pandemic.

Issue 2: Filing of revision petition under Section 397 Cr.P.C
The respondent filed a revision petition under Section 397 Cr.P.C to set aside the order of dismissal and restore the complaint. The revision petition was accompanied by an application for condonation of delay, explaining the reasons for non-appearance during the proceedings.

Issue 3: Delay in filing the revision petition
The petitioners argued that there was an unexplained delay of 485 days in filing the revision petition under Section 397 Cr.P.C. They questioned why the petition was not filed during the period between the dismissal of the complaint and the respondent's arrest. The court considered the reasons provided by the respondent for the delay, including being in custody and the subsequent lockdown due to the pandemic.

Issue 4: Application for condonation of delay
The respondent's application for condonation of delay was considered by the court, which took into account the reasons provided for the delay, including the respondent's arrest and subsequent release, along with the impact of the COVID-19 lockdown. The court found the reasons satisfactory and allowed the revision petition on payment of costs.

Issue 5: Legal provisions under Negotiable Instruments Act
The court referred to Section 139 of the Negotiable Instruments Act, which presumes that a holder received a cheque for the discharge of a debt. The court highlighted the purpose of Section 138 of the Act to ensure the credibility of negotiable instruments like cheques and penalize dishonored cheques. The court emphasized that even if a cheque is dishonored with insufficient funds, it constitutes an offense under Section 138.

In conclusion, the court dismissed the petition challenging the order allowing the revision petition, citing that no prejudice was caused to the petitioners by restoring the complaint. The court upheld the decision of the Principal District & Sessions Judge, emphasizing that the complaint was yet to be heard on merits and directing the respondent to conclude pre-summoning evidence without unnecessary adjournments.