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TMI Blog2014 (8) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... marily keeps the Defendant in perspective, the corporation spoken of in the Explanation, obviously refers to the Defendant. A plain reading of Section 20 of the CPC arguably allows the Plaintiff a multitude of choices in regard to where it may institute its lis, suit or action. The marginal note of Section 138 of the NI Act explicitly defines the offence as being the dishonour of cheques for insufficiency, etc., of funds in the account. Of course, the headings, captions or opening words of a piece of legislation are normally not strictly or comprehensively determinative of the sweep of the actual Section itself, but it does presage its intendment - Accordingly, unless the provisions of the Section clearly point to the contrary, the offence is concerned with the dishonour of a cheque; and in the conundrum before us the body of this provision speaks in the same timbre since it refers to a cheque being returned by the bank unpaid . None of the provisions of the IPC have been rendered nugatory by Section 138 of the NI Act and both operate on their own. It is trite that mens rea is the quintessential of every crime. Place, situs or venue of judicial inquiry and trial of the offence must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance pertaining to Court's territorial jurisdiction concerning criminal complaints filed under Chapter XVII of the Negotiable Instruments Act, 1881 (for short, 'the NI Act'). This is amply adumbrated by the Orders dated 3.11.2009 in I.A.No.1 in CC 15974/2009 of the three- Judge Bench presided over by the then Hon'ble the Chief Justice of India, Hon'ble Mr. Justice V.S. Sirpurkar and Hon'ble Mr. Justice P. Sathasivam which SLP is also concerned with the interpretation of Section 138 of the NI Act, and wherein the Bench after issuing notice on the petition directed that it be posted before the three-Judge Bench. PRECEDENTS 2. The earliest and the most often quoted decision of this Court relevant to the present conundrum is K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510 wherein a two-Judge Bench has, inter alia, interpreted Section 138 of the NI Act to indicate that, "the offence under Section 138 can be completed only with the concatenation of a number of acts. Following are the acts which are components of the said offence: (1) Drawing of the cheque, (2) Presentation of the cheque to the bank, (3) Returning the cheque unpaid by the drawee bank, (4) Giving notice in writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplaint is concerned. With the passage of time equities have therefore transferred from one end of the pendulum to the other. It is now not uncommon for the Courts to encounter the issuance of a notice in compliance with clause (b) of the proviso to Section 138 of the NI Act from a situs which bears no connection with the Accused or with any facet of the transaction between the parties, leave aside the place where the dishonour of the cheque has taken place. This is also the position as regards the presentation of the cheque, dishonour of which is then pleaded as the territorial platform of the Complaint under Section 138 of the NI Act. Harman, in fact, duly heeds the absurd and stressful situation, fast becoming common-place where several cheques signed by the same drawer are presented for encashment and requisite notices of demand are also despatched from different places. It appears to us that justifiably so at that time, the conclusion in Bhaskaran was influenced in large measure by curial compassion towards the unpaid payee/holder, whereas with the passage of two decades the manipulative abuse of territorial jurisdiction has become a recurring and piquant factor. The liberal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co-ordinate Bench, in the event that it finds itself unable to agree with an existing ratio, is competent to recommend the precedent for reconsideration by referring the case to the Chief Justice for constitution of a larger Bench. Indubitably, there are a number of decisions by two-Judge Benches on Section 138 of the NI Act, the majority of which apply Bhaskaran without noting or distinguishing on facts Ishar Alloy. In our opinion, it is imperative for the Court to diligently distill and then apply the ratio of a decision; and the view of a larger Bench ought not to be disregarded. Inasmuch as the three-Judge Bench in Ishar Alloy has categorically stated that for criminal liability to be attracted, the subject cheque has to be presented to the bank on which it is drawn within the prescribed period, Bhaskaran has been significantly whittled down if not overruled. Bhaskaran has also been drastically diluted by Harman inasmuch as it has given primacy to the service of a notice on the Accused instead of its mere issuance by the Complainant. 6. In Prem Chand Vijay Kumar v. Yashpal Singh (2005) 4 SCC 417, another two-Judge Bench held that upon a notice under Section 138 of the NI Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action having arisen in West Bengal without adverting at all to Bhaskaran, leave aside the three-Judge Bench decision in Ishar Alloy, the decision may be seen as per incuriam. Moreover, the concept of forum non conveniens has no role to play under Section 138 of the NI Act, and furthermore that it can certainly be contended by the accused-company that it was justifiable/convenient for it to initiate litigation in Ernakulam. If Bhaskaran was followed, Courts in Ernakulam unquestionably possessed territorial jurisdiction. It is, however, important to italicize that there was an unequivocal endorsement of the Bench of a previously expressed view that, "where the territorial jurisdiction is concerned the main factor to be considered is the place where the alleged offence was committed". In similar vein, this Court has opined in Om Hemrajani v. State of U.P. (2005) 1 SCC 617, in the context of Sections 177 to 180 CrPC that "for jurisdiction emphasis is on the place where the offence is committed." 8. The territorial jurisdiction conundrum which, candidly is currently in the cauldron owing to varying if not conflicting ratios, has been cogitated upon very recently by a two-Judge Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the so-called second constituent of Section 138 of the NI Act, and it is this postulate that spurs us towards the conclusion that we have arrived at in the present Appeals. There is also a discussion of Harman to reiterate that the offence under Section 138 is complete only when the five factors are present. It is our considered view, which we shall expound upon, that the offence in the contemplation of Section 138 of the NI Act is the dishonour of the cheque alone, and it is the concatenation of the five concomitants of that Section that enable the prosecution of the offence in contradistinction to the completion/commission of the offence. 9. We have also painstakingly perused Escorts Limited which was also decided by the Nishant two-Judge Bench. Previous decisions were considered, eventually leading to the conclusion that since the concerned cheque had been presented for encashment at New Delhi, its Metropolitan Magistrate possessed territorial jurisdiction to entertain and decide the subject Complaint under Section 138 of the NI Act. Importantly, in a subsequent order, in FIL Industries Ltd. v. Imtiyaz Ahmed Bhat passed on 12th August 2013, it was decided that the place f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in several cases and has gone to the extent of laying down that it should be courts endeavour to locate the place where the cause of action has substantially arisen and reject others where it may have incidentally arisen. Patel Roadways Limited, Bombay v. Prasad Trading Company, AIR 1992 SC 1514 = (1991) 4 SCC 270 prescribes that if the Defendant-corporation has a subordinate office in the place where the cause of action arises, litigation must be instituted at that place alone, regardless of the amplitude of options postulated in Section 20 of the CPC. We need not dilate on this point beyond making a reference to ONGC v. Utpal Kumar Basu (1994) 4 SCC 711 and South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd. (1996) 3 SCC 443. 11. We are alive to the possible incongruities that are fraught in extrapolating decisions relating to civil law onto criminal law, which includes importing the civil law concept of "cause of action" to criminal law which essentially envisages the place where a crime has been committed empowers the Court at that place with jurisdiction. In Navinchandra N. Majithia v. State of Maharashtra (2000) 7 SCC 640 this Court had to consider the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the period of its validity, whichever is earlier. (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation. For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability. 142. Cognizance of offences.-Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)- (a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque; (b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138; Provided that the cogni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Minister had also stated that the Court had discretion whether the Drawer would be imprisoned or/and fined. Detractors, however, pointed out that the IPC already envisioned criminal liability for cheque-bouncing where dishonest or fraudulent intention or mens rea on part of the Drawer was evident, namely, cheating, fraud, criminal breach of trust etc. Therefore, there was no justification to make the dishonour of cheques a criminal offence, ignoring factors like illiteracy, indispensable necessities, honest/innocent mistake, bank frauds, bona fide belief, and/or unexpected attachment or freezing of account in any judicial proceedings as it would bring even honest persons within the ambit of Section 138 NI Act. The possibility of abusing the provision as a tool of harassment could also not be ruled out. Critics also decried the punishment for being harsh; that civil liability can never be converted into criminal liability; that singling out cheques out of all other negotiable instruments would be violative of Article 14 of Constitution of India. Critics contended that there was insufficient empirical enquiry into statutes or legislation in foreign jurisdictions criminalizing the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of criminal courts. The word "action" has traditionally been understood to be synonymous to "suit", or as ordinary proceedings in a Court of justice for enforcement or protection of the rights of the initiator of the proceedings. "Action, generally means a litigation in a civil Court for the recovery of individual right or redress of individual wrong, inclusive, in its proper legal sense, of suits by the Crown" - [Bradlaugh v. Clarke 8 Appeal Cases 354 p.361]. Unlike civil actions, where the Plaintiff has the burden of filing and proving its case, the responsibility of investigating a crime, marshalling evidence and witnesses, rests with the State. Therefore, while the convenience of the Defendant in a civil action may be relevant, the convenience of the so called complainant/victim has little or no role to play in criminal prosecution. Keeping in perspective the presence of the word "ordinarily" in Section 177 of CrPC, we hasten to adumbrate that the exceptions to it are contained in the CrPC itself, that is, in the contents of the succeeding Section 178. The CrPC also contains an explication of "complaint" as any allegation to a Magistrate with a view to his taking action in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Protection Act 1986, Section 11 of the Central Sales Tax Act 1956, Section 279 of the Income Tax Act, Sections 132 and 308, CrPC, Section 137 of the Customs Act etc. It would be idle to contend that the offence comes into existence only on the grant of permission for prosecution, or that this permission constitutes an integral part of the offence itself. It would also be futile to argue that the place where the permission is granted would provide the venue for the trial. If sanction is not granted the offence does not vanish. Equally, if sanction is granted from a place other than where the crime is committed, it is the latter which will remain the place for its prosecution. SECTION 138 NI ACT 15. The marginal note of Section 138 of the NI Act explicitly defines the offence as being the dishonour of cheques for insufficiency, etc., of funds in the account. Of course, the headings, captions or opening words of a piece of legislation are normally not strictly or comprehensively determinative of the sweep of the actual Section itself, but it does presage its intendment. See: Frick India Ltd. v. Union of India (1990) 1 SCC 400 and Forage & Co. v. Municipal Corporation of Greater Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me itself, it modulates or regulates the crime in circumstances where, unless its provisions are complied with, the already committed crime remains impervious to prosecution. The proviso to Section 138 of the NI Act features three factors which are additionally required for prosecution to be successful. In this aspect Section 142 correctly employs the term "cause of action" as compliance with the three factors contained in the proviso are essential for the cognizance of the offence, even though they are not part of the action constituting the crime. To this extent we respectfully concur with Bhaskaran in that the concatenation of all these concomitants, constituents or ingredients of Section 138 NI Act, is essential for the successful initiation or launch of the prosecution. We, however, are of the view that so far as the offence itself the proviso has no role to play. Accordingly a reading of Section 138 NI Act in conjunction with Section 177, CrPC leaves no manner of doubt that the return of the cheque by the drawee bank alone constitutes the commission of the offence and indicates the place where the offence is committed. 17. In this analysis we hold that the place, situs or ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of action, rather than a Complaint under Section 138 of the NI Act. And of course, he can always file a suit for recovery wherever the cause of action arises dependent on his choosing. 19. The interpretation of Section 138 of the NI Act which commends itself to us is that the offence contemplated therein stands committed on the dishonour of the cheque, and accordingly the JMFC at the place where this occurs is ordinarily where the Complaint must be filed, entertained and tried. The cognizance of the crime by the JMFC at that place however, can be taken only when the concomitants or constituents contemplated by the Section concatenate with each other. We clarify that the place of the issuance or delivery of the statutory notice or where the Complainant chooses to present the cheque for encashment by his bank are not relevant for purposes of territorial jurisdiction of the Complaints even though non-compliance thereof will inexorably lead to the dismissal of the complaint. It cannot be contested that considerable confusion prevails on the interpretation of Section 138 in particular and Chapter XVII in general of the NI Act. The vindication of this view is duly manifested by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be deemed to have been filed within the time prescribed by law, unless the initial or prior filing was itself time barred. DISPOSAL OF PRESENT APPEALS Crl. Appeal No.2287 of 2009 21. A learned Single Judge of the High Court of Judicature at Bombay, Nagpur Bench has, pursuant to a threadbare discussion of Bhaskaran concluded that since the concerned cheque was drawn on the Bank of India, Bhandara Branch, Maharashtra where it was dishonoured, the Judicial Magistrate First Class, Digras, District Yavatmal had no jurisdiction to entertain the Complaint. It is pertinent to note that the subject cheque was presented at Digras, District Yavatmal where the Complainant had a bank account although he was a resident of District Washim, Maharashtra. The learned Single Judge, in the impugned judgment, had rightly rejected the argument that the Complaint itself should be dismissed; instead he ordered that it be returned to the complainant for filing in the appropriate Court. The Appeal is accordingly dismissed. Crl. Appeal No. 1593 of 2014 [Arising out of S.L.P.(Crl.)No.2077 of 2009 22. In this Appeal the Respondent-accused, having purchased electronic items from the Appellant-company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties. However, the JMFC, Nagpur acquitted the Respondent No.2-accused on the ground of not having territorial jurisdiction. On appeals being filed before the High Court of Bombay, the judgment of the JMFC, Nagpur was partly set aside so far as the acquittal of the Respondent No.2-accused was concerned and it was ordered that the Complaints be returned for filing before the proper Court. In view of the conclusion arrived at by us above, these Appeals are also dismissed. Crl. Appeal No. 1604 of 2014 [Arising out of S.L.P.(Crl.)No.59 of 2013] 25. The cheque in question was drawn by the Respondentaccused on State Bank of Travancore, Delhi. However, it was presented by the Appellant-complainant at Aurangabad. A Complaint was filed before JMFC, Aurangabad who issued process. Respondent-accused filed an application under Section 203 of CrPC seeking dismissal of the Complaint. The application was dismissed on the predication that once process had been initiated, the Complaint could not be dismissed. On a writ petition being filed before the High Court of Bombay, Aurangabad Bench, the order of issuance of process was set aside and the Complaint was ordered to be returned for being pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oing through the draft order proposed by my esteemed brother Vikramajit Sen, J. I entirely agree with the conclusions which my erudite brother has drawn based on a remarkably articulate process of reasoning that illumines the draft judgment authored by him. I would all the same like to add a few lines of my own not because the order as proposed leaves any rough edges to be ironed out but only because the question of law that arises for determination is not only substantial but of considerable interest and importance for the commercial world. The fact that the view being taken by us strikes a discordant note on certain aspects which have for long been considered settled by earlier decisions of this Court being only an additional reason for the modest addition that I propose to make. Of these decisions Bhaskaran's case stands out as the earliest in which this Court examined the vexed question of territorial jurisdiction of the Courts to try offences punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter called "NI Act"). Bhaskaran's case was heard by a two-judge Bench of this Court who took the view that the jurisdiction to try an offence under Section 138 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther words, the complainant can choose any one of those courts having jurisdiction over any one of the local areas within the territorial limits of which any one of those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under Section 138 of the Act." 2. Bhaskaran held the field for two years. The first blow to the view taken by this Court in Bhaskaran's case was dealt by a three-Judge Bench decision in Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. (2001) 3 SCC 609. The question that arose in that case was whether the limitation of six months for presentation of a cheque for encashment was applicable viz-a-viz presentation to the bank of the payee or that of the drawer. High Courts in this country had expressed conflicting opinions on the subject. This Court resolved the cleavage in those pronouncements by holding that the cheque ought to be presented to the drawee bank for its dishonour to provide a basis for prosecution under Section 138. The Court observed: "The use of the words "a bank" and "the bank" in the section are an indicator of the intention of the legislature. "T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion may have taken place. 4. Then came Harman Electronics (P) Ltd. v. National Panasonic India (P) Ltd. (2009) 1 SCC 720. That was a case where the complaint under Section 138 was filed in a Delhi Court, only because the statutory notice required to be issued under the proviso to Section 138 was issued from Delhi. If Bhaskaran was correctly decided, Harman should not have interfered with the exercise of jurisdiction by the Delhi Court for issue of a notice was in terms of Bhaskaran, one of the factors that clothed the Court in Delhi to take cognizance and try the case. Harman did not do so. In Harman's case this Court, emphasized three distinct aspects. Firstly, it said that there was a world of difference between issue of a notice, on the one hand, and receipt, thereof, on the other. Issue of notice did not give rise to a cause of action while receipt did, declared the Court. 5. Secondly, the Court held that the main provision of Section 138 stated what would constitute an offence. The proviso appended thereto simply imposed certain further conditions which must be fulfilled for taking cognizance of the offence. The following passage deals with both these aspects: "It is one th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of jurisdiction to take cognizance was doubted for a unilateral act of the complainant/payee of the cheque could without any further or supporting reason confer jurisdiction on a Court within whose territorial limits nothing except the presentation of the cheque had happened. 8. Three recent decisions need be mentioned at this stage which have followed Bhaskaran and attempted to reconcile the ratio of that case with the subsequent decisions in Ishar Alloy Steels and Harman Electronics. In Nishant Aggarwal v. Kailash Kumar Sharma (2013) 10 SCC 72 this Court was once again dealing with a case where the complaint had been filed in Court at Bhiwani in Haryana within whose territorial jurisdiction the complainant had presented the cheque for encashment, although the cheque was drawn on a bank at Gauhati in Assam. Relying upon the view taken in Bhaskaran this Court held that the Bhiwani Court had jurisdiction to deal with the matter. While saying so, the Court tried to distinguish the three-Judge Bench decision in Ishar Alloy Steels (supra) and that rendered in Harman Electronics case (supra) to hold that the ratio of those decisions did not dilute the principle stated in Bhaskara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque but taking cognizance of the same by any Court is forbidden so long as the complainant does not have the cause of action to file a complaint in terms of clause (c) of the proviso read with Section 142 which runs as under: "Section 142: Cognizance of offences. -Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)- (a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque; (b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138: [Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.] (c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138." 11. The following would constitute 'cause of action' referred to in sub clause (b) above: (a) The complainant has presented the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the main provision. The proviso appended thereto however imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken." If the Parliament intended to make the conditions stipulated in the proviso, also as ingredients of the offence, the provision would have read differently. It would then have specifically added the words "and the drawer has despite receipt of a notice demanding the payment of the amount, failed to pay the same within a period of fifteen days from the date of such demand made in writing by a notice". That, however, is not how the enacting provision of Section 138 reads. The legislature has, it is obvious, made a clear distinction between what would constitute an offence and what would give to the complainant the cause of action to file a complaint for the court competent to take cognizance. That a proviso is an exception to the general rule is well settled. A proviso is added to an enactment to qualify or create an exception to what is contained in the enactment. It does not by itself state a general rule. It simply qualifies the generality of the main enactment, a portion which but for the proviso would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be launched as entertainment house was covered under the definition of 'accommodation' as defined in Section 2 (1) (d) of Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947. The proviso provided for some exception for factories and business carried in a building. It was held that sometimes draftsmen include proviso by way of over caution to remove any doubts and accommodation would include this cinema hall: "18. A proviso must be limited to the subject-matter of the enacting clause. It is a settled rule of construction that a proviso must prima facie be read and considered in relation to the principal matter to which it is a proviso. It is not a separate or independent enactment. 'Words are dependent on the principal enacting words, to which they are tacked as a proviso. They cannot be read as divorced from their context' 1912 A.C. 544. If the rule of construction is that prima facie a proviso should be limited in its operation to the subject-matter of the enacting clause, the stand we have taken is sound. To expand the enacting clause, inflated by the proviso, sins against the fundamental rule of construction that a proviso must be considered in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have been within the rule. It has to operate in the same field and if the language of the main enactment is clear, the proviso cannot be torn apart from the main enactment nor can it be used to nullify by implication what the enactment clearly says nor set at naught the real object of the main enactment, unless the words of the proviso are such that it is its necessary effect." (emphasis supplied) 21. The same line of reasoning was followed in A.N. Sehgal and Ors. v. Raje Ram Sheoram and Ors. 1992 Supp (1) SCC 304 while interpreting a proviso in the Haryana Service of Engineers Rules, 1960 where the Court held that the proviso to Rule 5(2)(a) cannot be applied to confer the benefit of regular appointment on every promotee appointed in excess of 50% quota. This Court harmoniously read the main provision and the proviso and gave effect to the rule. 22. In Kerala State Housing Board and Ors. v. Ramapriya Hotels (P) Ltd. and Ors. 1994 (5) SCC 672 this Court was examining whether the period of 4 years envisaged in proviso to Section 16(i) under Kerala Land Acquisition Act, 1961 could be reckoned from date when agreement was executed or from date of publication of notification und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction which would make the exceptions carved out by the proviso necessary and a construction which would make the exceptions unnecessary and redundant should be avoided (See: Justice G. P. Singh's "Principles of Statutory Interpretation" Seventh Edition 1999, p-163). This principle has been deduced from the decision of the Privy Council in Govt. of the Province of Bombay v. Hormusji Manekji (AIR 1947 PC 200) as also the decision of this Court in Durga Dutt Sharma v.Navaratna Pharmaceutical Laboratories (AIR 1965 SC 980)." 24. To the same effect are the decisions of this Court in Ali M.K. and Ors. v. State of Kerala and Ors. (2003) 11 SCC 632, Nagar Palika (supra) and in Steel Authority of India Ltd. v. S.U.T.N.I Sangam & Ors. (2009) 16 SCC 1. 25. In conclusion, we may refer to Maxwell, "Interpretation of Statutes" Edn. 12, 1969, on P. 189-190 which states that it is a general finding and practice "that inconsistencies can be avoided by applying the general rule that the words of a proviso are not to be taken "absolutely in their strict literal sense" [R v. Dimbdin (1910)] but that a proviso is "of necessity ... limited in its operation to the ambit of the section w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence of cheating and dishonestly inducing delivery of property then in terms of Section 182 (1) read with Sections 184 and 220 of the Cr.P.C. such offence may be tried either at the place where the inducement took place or where the cheque forming part of the same transaction was dishonoured or at the place where the property which the person cheated was dishonestly induced to deliver or at the place where the accused received such property. These provisions make it clear that in the commercial world a party who is cheated and induced to deliver property on the basis of a cheque which is dishonoured has the remedy of instituting prosecution not only at the place where the cheque was dishonoured which at times may be a place other than the place where the inducement or cheating takes place but also at the place where the offence of cheating was committed. To that extent the provisions of Chapter XIII of the Code will bear relevance and help determine the place where the offences can be tried. 28. We may at this stage refer to two other decisions of this Court which bear some relevance to the question that falls for our determination. In Sadanandan Bhadran v. Madhavan Sunil Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, it is seen that its main part creates an offence when a cheque is returned by the bank unpaid for any of the reasons mentioned therein. The significant fact, however, is that the proviso lays down three conditions precedent to the applicability of the above section and, for that matter, creation of such offence and the conditions are: (i) the cheque should have been presented to the bank within six months of its issue or within the period of its validity, whichever is earlier; (ii) the payee should have made a demand for payment by registered notice after the cheque is returned unpaid; and (iii) that the drawer should have failed to pay the amount within 15 days of the receipt of the notice. It is only when all the above three conditions are satisfied that a prosecution can be launched for the offence under Section 138. So far as the first condition is concerned, clause (a) of the proviso to Section 138 does not put any embargo upon the payee to successively present a dishonoured cheque during the period of its validity. This apart, in the course of business transactions it is not uncommon for a cheque being returned due to insufficient funds or similar such reasons and being p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n permeates the pronouncements of this Court in Sadanandan Bhadran and MSR Leathers. High Court of Kerala has, in our view, correctly interpreted Section 138 of the Act in Kairali Marketing & Processing Cooperative Society Ltd. V. Pullengadi Service Cooperative Ltd. (2007) 1 KLT 287 when it said: "It is evident from the language of Section 138 of the N.I. Act that the drawer is deemed to have committed the offence when a cheque issued by him of the variety contemplated under Section 138 is dishonoured for the reasons contemplated in the Section. The crucial words are "is returned by the bank unpaid". When that happens, such person shall be deemed to have committed the offence. With the deeming in the body of Section 138, the offence is already committed or deemed to have been committed. A careful reading of the body of Section 138 cannot lead to any other conclusion. Proviso to Section138 according to me only insists on certain conditions precedent which have to be satisfied if the person who is deemed to have committed the offence were to be prosecuted successfully. The offence is already committed when the cheque is returned by the bank. But the cause of action for pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the amount exceeds the arrangement made with the bank. (ii) Cognizance of any such offence is however forbidden under Section 142 of the Act except upon a complaint in writing made by the payee or holder of the cheque in due course within a period of one month from the date the cause of action accrues to such payee or holder under clause (c) of proviso to Section 138. (iii) The cause of action to file a complaint accrues to a complainant/payee/holder of a cheque in due course if (a) the dishonoured cheque is presented to the drawee bank within a period of six months from the date of its issue. (b) If the complainant has demanded payment of cheque amount within thirty days of receipt of information by him from the bank regarding the dishonour of the cheque and (c) If the drawer has failed to pay the cheque amount within fifteen days of receipt of such notice. (iv) The facts constituting cause of action do not constitute the ingredients of the offence under Section 138 of the Act. (v) The proviso to Section 138 simply postpones/defers institution of criminal proceedings and taking of cognizance by the Court till such time cause of action in terms of clause (c) of provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n not intended to use such oppressive litigation to achieve the collateral purpose of extracting money from the accused by denying him a fair opportunity to contest the claim by dragging him to a distant place. Bhaskaran's case could never have intended to give to the complainant/payee of the cheque such an advantage. Even so, experience has shown that the view taken in Bhaskaran's case permitting prosecution at any one of the five different places indicated therein has failed not only to meet the approval of other benches dealing with the question but also resulted in hardship, harassment and inconvenience to the accused persons. While anyone issuing a cheque is and ought to be made responsible if the same is dishonoured despite compliance with the provisions stipulated in the proviso, the Court ought to avoid an interpretation that can be used as an instrument of oppression by one of the parties. The unilateral acts of a complainant in presenting a cheque at a place of his choice or issuing a notice for payment of the dishonoured amount cannot in our view arm the complainant with the power to choose the place of trial. Suffice it to say, that not only on the Principles of Interpr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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