2024 (10) TMI 1536 - HC - Indian Laws

Dishonour of Cheque - discharge of legal liability or not - rebuttal of presumption under Section 139 of the N.I. Act - corroboration of statements - Jurisdiction and scope of revisional court under Section 397 of the Cr.P.C. - HELD THAT - It was laid down by the Hon ble Supreme Court in MALKEET SINGH GILL VERSUS THE STATE OF CHHATTISGARH 2022 (7) TMI 1455 - SUPREME COURT that the revisional court does not exercise an appellate jurisdiction and it can only rectify the patent defect, errors of jurisdiction or the law - The present revision has to be decided as per the parameters laid down by the Hon ble Supreme Court. The cheque was dishonoured by the bank of the accused on 23.01.2018. The cheque was issued on 21.10.2017 and was to be presented before the drawee bank within three months excluding the date of drawing of the cheque. The cheque was to be presented before the drawee bank on or before 21.01.2018 but it was presented on 23.01.2018 after the lapse of the statutory period of validity of the cheque. Thus, it was rightly dishonoured with an endorsement outdated/state cheque. In the present case, the learned Trial Court noticed the date of presentation of the cheque before the bank of the complainant but failed to notice that presentation of the cheque before the bank of the complainant was not material and the presentation before the bank of the accused was necessary within three months to confer a cause of action upon the complainant. The learned Trial Court also failed to appreciate the significance of the memo of dishonour, in which the reason for dishonour was mentioned as out dated/state and the fact that such a memo does not confer a cause of action to file complaint under Section 138 of the N.I.Act. The learned Appellate Court failed to notice both these aspects. Hence, the judgments and order passed by the learned Courts below are not sustainable. The present appeal is allowed and the judgments and order passed by the learned Courts below are ordered to be set aside. The complaint is dismissed not maintainable. The accused is acquitted for the commission of an offence punishable under Section 138 of N.I. Act. The fine/compensation amount be refunded to the petitioner/accused after the expiry the period of appeal - Appeal allowed.

Summary

Issues Involved:
1. Validity of cheque presentation under Section 138 of the Negotiable Instruments Act.
2. Presumption of consideration under Section 139 of the N.I. Act.
3. Jurisdiction and scope of revisional court under Section 397 of the Cr.P.C.
4. Requirement for serving notice to the accused.

Issue-wise Detailed Analysis:

1. Validity of Cheque Presentation:
The primary issue was whether the cheque was presented within the valid period as required under Section 138 of the Negotiable Instruments Act (N.I. Act). The cheque, issued on 21.10.2017, was dishonoured on 23.01.2018 due to being outdated/stale. According to the law, the cheque must be presented to the drawee bank within three months from the date of issuance. In this case, the cheque was presented beyond the validity period, rendering it invalid for prosecution under Section 138. The court relied on precedents, including the Supreme Court's decision in Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd., which mandates presentation at the drawee bank within the specified period to hold the drawer criminally liable. The court concluded that the presentation to the complainant's bank did not suffice, as the cheque was not presented to the drawee bank within the required timeframe.

2. Presumption of Consideration:
The trial court initially presumed consideration under Section 139 of the N.I. Act, which the accused failed to rebut. However, the revisional court found that the cheque's dishonour due to being outdated/stale negated the presumption of consideration. The cheque's invalidity meant that the presumption could not be applied, as the statutory requirements for a valid cheque under Section 138 were not met.

3. Jurisdiction and Scope of Revisional Court:
The court examined the scope of revisional jurisdiction under Section 397 of the Cr.P.C., which allows intervention only to correct patent defects, errors of jurisdiction, or law. The court cited the Supreme Court's guidance in Malkeet Singh Gill v. State of Chhattisgarh and State of Gujarat v. Dilipsinh Kishorsinh Rao, emphasizing that revisional courts should not act as appellate courts and should only rectify well-founded errors. The revisional court determined that the lower courts' failure to recognize the cheque's invalidity constituted a jurisdictional error, as the dishonour reason fell outside Section 138's purview.

4. Requirement for Serving Notice:
The accused contended that the notice was not served, impacting the proceedings. However, the court focused on the cheque's invalidity, which obviated the need to address the notice service issue in detail. The cheque's presentation beyond its validity period was a decisive factor, rendering the notice service issue secondary to the cheque's legal status.

Conclusion:
The revisional court allowed the appeal, setting aside the judgments of the lower courts due to the cheque's invalidity for prosecution under Section 138 of the N.I. Act. The accused was acquitted, and the fine/compensation was ordered to be refunded. The court directed the petitioner to furnish bonds under Section 437-A of the Cr.P.C., ensuring compliance in case of further appeals. The decision underscores the importance of adhering to statutory cheque presentation timelines and clarifies the revisional court's limited scope in addressing jurisdictional errors.