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TMI Blog1992 (9) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... bed in the section and whether this infirmity is at all curable or whether it is fatal to the prosecution ? (b) What is the correct manner in which the time-frame as is prescribed in sections 138 and 142 of the Negotiable Instruments Act is required to be computed ? (c) Whether it would be open to the complainant, in the course of proceedings under section 482 of the Code of Criminal Procedure, to produce material before the High Court for purposes of effectively amendings statements or the factual position or as has happened in the present case, the material date set out in the complaint or conversely, whether the record of the lower court is sacrosanct and cannot be altered at this stage ? (d) Is section 138 to be afforded restrictive application by confining it to the narrow category of cases where the rejection slip reads insufficiency of funds or was it prescribed as an antidote for the malignant trade practice of indiscriminately issuing cheques that are dishonoured without any compunction, in other words, would dishonour of a cheque attract criminal consequences in the normal course ? 2. The facts that are material for purposes of the decision of this petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat affidavit on the basis of which he has sought to justify the order whereby process was issued. 3. Mr. Manohar, learned counsel appearing on behalf of the petitioner has, in the first instance, assailed the maintainability of the proceeding initiated before the trial court because, it is his case that no offence whatsoever was disclosed on August 9, 1991, when the learned Magistrate took cognizance of the complaint and issued process. In support of this contention, Mr. Manohar has advanced the submission that the provision of section 138 of the Negotiable Instruments Act specifically lay down a requirement that certain conditions are required to be complied with and, according to Mr. Manohar, in the absence of these conditions, no offence can be said to have been complete. He proceeds to state that if as on August 9, 1991, no offence can be said to have been committed by the accused, no complaint could have been presented in respect of such alleged offence and, consequently, the Magistrate was wrong in issuing process. Mr. Manohar's submission is that the proceedings themselves are liable to be quashed on the grounds that they have been made out by him. 4. In support, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in this section shall apply unless, - (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within 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 giving a notice, in writing, to the drawer of the cheque, within fifteen 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. 7. Relying on this definition, Mr. Manohar advanced the submission that section 138 initially proceeds to define the ingredients of the offence and the punishment that would follow in the event of such an offence having been committed. But what is of paramount significance is the fact that the section contains a proviso which makes certain eventualities conditions precedent for the commission of an offence. We are not immediately concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presented to the learned Magistrate, section 142 creates a total legal prohibition on the court from taking cognizance of offences except during the time period prescribed by this section. That time period has been well defined in sub-clause (c) which states that the complaint will have to be made within one month of the date on which the cause of action arise under clause (c) of the provisions of section 138. That provision clearly stipulates that the offence defined in section 138 of the Negotiable Instruments Act shall come into existence in the event of the accused not making the payment within a period of 15 days of the service of he notice on him. Though this is in the negative sense, it effectively means that only when the period of 15 days after service of the notice has elapsed and the accused has still defaulted in making the payment, does he commit the offence. Relying on these provisions, Mr. Manohar concludes that the complaint presented to the trial court on August 9, 1991, i.e., before the 15-day immunity period had elapsed, was still-born, that it was effectively void in law and that the learned Magistrate was in error in having entertained the complaint. Mr. Manoh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot be departed from and, under these circumstances, we are required to proceed on the basis of the original statement contained in the complaint that the service of the notice was effected on the accused on July 29, 1991. If this date were to be accepted, there can be little dispute about the fact that the complaint presented before the trial court was well within the time frame of 15 days as prescribed by section 138(c) of the Negotiable Instruments Act. 12. Mr. Jahagirdar has advanced an ingenuous submission which we need to deal with in so far as he contends that the act that is punishable effectively is the dishonour of the cheque in so far as once a cheque has been issued, it should normally be presumed that the drawer of the cheque had necessary funds for honouring the cheque and would make arrangements for payment. It is for this reason that the Legislature has made the act of dishonour punishable by a criminal court. He, therefore, submits that the period of 15 days as prescribed in section 138(c) must be construed by the court as a grace period within which it is open to the accused person to make amends or in other words, to purge himself of the offence which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogether, we have no hesitation in holding that no offence can be said to have been committed unless and until the period of 15 days as prescribed under sub-clause (c) of section 138 has in fact elapsed. A court would, therefore, be barred in law from taking cognizance of a complaint in respect of such an offence, at any point of time prior to this. It is not permissible to advance a submission that a complaint can be presented earlier to a Magistrate and kept pending for an order or process at a later point of time because the Code is quite specific about the fact that it is at the point of time when a private complaint is presented to the court that the court takes cognizance of it. It is open to the court to defer the subsequent process either to examine the complainant or to sent the complaint for enquiry and report by the police or for that matter, if no case is made out, to dismiss the complaint. The point of time at which cognizance is taken however, is when the complaint is presented to the learned Magistrate and applying this test, there can be no dispute about the fact than on August 9, 1991, when the complaint was presented to the learned Magistrate, no offence can be sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions contemplated by all the provisions is a condition precedent. Mr. Manohar also referred to the decision in the case of Rajiv Kumar v. State of Uttar Pradesh [1991] Crl. LJ 3010; [1993] 78 Comp Cas 507 (All), wherein the learned single judge of the Allahabad High Court, while construing the requirements of sub-clause (b) of section 138 held that in the absence of a notice as contemplated by that sub-clause, no cognizance can be taken under section 142. Reliance was also placed on a Division Bench decision of the Kerala High Court in the case of Manoj K. Seth v. R. J. Fernandez [1991] Crl. LJ 3253; [1992] 73 Comp Cas 441 (Ker), wherein the court was concerned with the provision of sub-clause (a) of section 138 and the court took the view that in the case of a post-dated cheque, if it is not presented within the period of six months as prescribed in this sub-clause, no offence can be said to have been committed. Learned counsel also drew our attention to the decision, in the case of Ess Bee Food Specialities v. Kapoor Bros. [1992] Crl. LJ 739; [1993] 78 Comp Cas 570 (P H), wherein a leaned single judge of the Punjab and Haryana High Court has reiterated the aforesaid position in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the local court. The anatomy of section 138 comprise certain necessary components before the offence can be said to be complete, the last of them being the act of non-payment in spite of 15 days having elapsed after receipt of the final notice. It is true that the cheques may have been issued by the accused at his place of residence or business, the bank on which it is drawn being often located at a second spot and inevitably the complainant or the payee has his place of residence or business at yet another location. It was for this reason that the Kerala High Court in the case of P. K. Muraleedharan v. C. K. Pareed [1992] Crl. LJ 1965; [1993] 76 Comp Cas 615, took the view that any of the three courts could exercise jurisdiction. In our considered view, where undoubtedly each of the components constitutes a stage in the commission of the offence, the final nonpayment being the ultimate one, section 178 of the Criminal Procedure Code, would clearly apply to an offence of this type. It would be perfectly valid and reasonable to hold, therefore, that the aggrieved party, viz., the complainant is fully justified in approaching the local court having jurisdiction over the area ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stifiable, then, the Legislature would have set these out in the section as exceptions not constituting an offence. No such intention can be read into section 138, as none exists. The solitary exception made by the Legislature is with regard to the drawer being offered a final opportunity of paying up the amount within 15 days from the receipt of notice which, in other-words, provides a last opportunity to prove one's bona fides. It is obvious, that having regard to the widespread practice of issuing cheques which are dishonoured and the many ingenious methods of avoiding payment that are practiced, the Legislature has opted for a non-nonsense situation. The possibility has not been overlooked whereby an account any inadvertently be overdrawn or a dishonour may be for technical reasons or where a genuine mistake has occurred and the grace period provided for by the Legislature after service of notice on the drawer is in order to afford an opportunity to the drawer to rectify these. Undoubtedly, even when the dishonour has taken place due to the dishonesty of the depositor, the drawer is still given a last chance to act otherwise. Consequently, the reasons for dishonour even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds, giving rise to an action under section 138. In the case of Sekhar Gupta v. Subhas Chandra Mondal [1992] 73 Comp Cas 590 (Cal), an interesting question arose as to whether an action is maintainable under section 138 in the case of a cheque that is presented for payment more than once. A division Bench of the Kerala High Court in the case of N. C. Kumaresan v. Ameerappa [1992] 74 Comp Cas 848 (Ker), has taken the view that more than one cause of action on the same cheque is not envisaged and that a complaint is maintainable only on the strength of the first cause of action when the cheque was returned for the first time. The Division Bench has proceeded on the reasoning that the Legislature never intended multiplication of the offences in relation to the number of times that the same cheque was dishonoured. In contrast to this view, the Calcutta High Court in the decision referred to supra, and in our considered view very correctly, held that the fresh cause of action accrues every time the cheque is dishonoured but that the period for sending the notice demanding payment is to be reckoned for the date of receipt of intimation of dishonour on the last presentation and that, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned single judge had construed a complaint under section 138 as being misconceived in a case where a cheque was returned on the ground that the account had been closed. Relying on the qualifying provisions in section 138 which uses the phrase insufficiency of funds or exceeding arrangement , it was held that the ground of dishonour not being insufficiency of funds, no offence was disclosed. 28. This, to our mind, is too narrow a construction of the section and fails to take into account the objects and reasons behind the amendment. The wording and the endorsement from the bank or the circumstances under which a cheque is returned are not the guiding criterion but the fact that on presentation of the cheque, the payment was not made. There could be a host of reasons for this but the bottom line of the situation is that the payment could not be made by the banker and the mechanics of the reasons apart, the irresistible conclusion that, had the funds been available, the payment would have been made leads back to the position that dishonour, therefore, implies insufficiency of funds. We are reinforced in this view by the definition of a cheque as appears in section 6 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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