2022 (12) TMI 1180 - HC - Indian Laws

Dishonor of Cheque - legally enforceable debt - insufficiency of funds - condonation of delay to file a complaint beyond time by the complainant - HELD THAT - The provision of Section 142 (b) of Negotiable Instruments Act, 1881 cannot be considered to be effective with retrospective effect. Therefore, learned trial court has wrongly passed the order for condontion of delay in filing the complaint by the complainant and, moreover, when the objection was raised before the revisional court, it did not consider it and has rejected the objection. Learned revisional also ignored the provision as contained under section 142(b) of the Negotiable Instruments Act, 1881 and did not give the benefit of the provision to the respondent. Therefore, it is observed that the complaint filed by the revisionist barred by limitation. That so far as the nature of transaction is concerned, learned revisional court on the basis of evidence produced by the revisionist observed that cheque was given by the respondent to the revisionist for collateral security not as discharge to any of debt or other liability. Revisional Court after appreciating the material available on record rightly observed that the cheque was given as collateral security to the amount given by the revisionist to the respondents. There is no illegality in observation and conclusion drawn by the learned trial Court. The criminal revision is dismissed.

Summary

Issues:
1. Appeal against judgment under section 138 of Negotiable Instruments Act, 1881.
2. Allegation of dishonored cheque and non-payment of debt.
3. Conviction and sentencing of respondent.
4. Appeal allowed, setting aside of judgment and sentence.
5. Filing of criminal revision against the impugned order.
6. Jurisdictional error in passing the impugned order.
7. Dispute over nature of the cheque - collateral security or debt discharge.
8. Delay condonation application and rejection by trial court.
9. Application to recall delay condonation order.
10. Interpretation of Section 142(b) of the Negotiable Instruments Act, 1881.
11. Effectiveness of Section 142(b) with retrospective effect.
12. Observations from Subodh S. Salaskar Versus Jay Prakash M. Shah case.
13. Conclusion on the nature of the transaction and validity of the complaint.

Analysis:
1. The case involved an appeal against a judgment under section 138 of the Negotiable Instruments Act, 1881, where the respondent was convicted and sentenced for dishonoring a cheque issued for a debt. The appeal was allowed, setting aside the judgment and sentence, leading to the filing of a criminal revision against the impugned order.
2. The revisionist alleged that the cheque issued by the respondent was dishonored due to insufficient funds, and despite a notice to repay the debt, no payment was made, leading to the complaint under Section 138 of the Act.
3. The trial court convicted the respondent, but the revisional court set aside the judgment, leading to the current criminal revision.
4. The revisionist argued that the revisional court committed a jurisdictional error and that the cheque was not given as collateral but for debt discharge, justifying the complaint.
5. The dispute also involved the delay condonation application, rejection of the application to recall the order, and the interpretation of Section 142(b) of the Act, granting relief for delay condonation.
6. The court examined the retrospective effect of Section 142(b) and cited the Subodh S. Salaskar case to establish that the provision cannot be applied retrospectively.
7. Ultimately, the court concluded that the complaint was time-barred, the cheque was for collateral security, and the revision lacked merit, leading to its dismissal.