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TMI Blog2021 (5) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... ination of the complainant and his witness present, if any on oath. The preliminary statement of the complainant and his witness in attendance is recorded only with a view to decide taking further steps in the complaint, like issuance of process for securing the presence of the accused. There is no denying the proposition that in a case involving the dispute purely of a civil nature, the criminal law cannot be set in motion but, it is equally well settled that certain offences like the offences of cheating, criminal breach of trust, criminal misappropriation and offence under section 138 of the NI Act do arise out of the civil transactions and if the ingredients of offence/offences are made out, criminal law too can be set in motion alongside the civil remedy for resolution of the dispute - Generally, in the criminal law, mens rea is an essential component of crime but dishonour of cheque is a criminal offence where there is no need to prove a mens rea. The offence under Section 138 would be made out only if the dishonoured cheque is drawn by the drawer in favour of the drawee for discharge of legally enforceable debt or liability. Essentially, there is element of civil liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the respondent could present the cheques for encashment to the bank, he was requested by the petitioner not to present cheque bearing No. 119942 dated 10.05.2020 for an amount of ₹ 10 lacs for encashment with a promise that petitioner would make the payment of the entire amount once the lockdown imposed by the Government due to COVID-19 was lifted. The petitioner did not keep his promise and, accordingly, the respondent presented the remaining three cheques for amount of ₹ 22 lacs for encashment in his account maintained in the name of M/S New Lark with J K Bank Branch, Ompora, Budgam. All the three cheques were dishonoured for the reason of insufficient balance in the account of the petitioner maintained with J K Bank, Branch Old Airport Road, Rangrate. Faced with the dishonour of cheques, the respondent informed the petitioner about the dishonour of cheques and requested him for payment of the entire amount of ₹ 42 lacs, including the amount of dishonoured cheques but the petitioner avoided the same. Resultantly the respondent served a demand notice dated 05.10.2020, upon the petitioner through registered post on 07.10.2020. Despite having received the dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted by three cheques, has also raised a demand of additional amount of ₹ 20 lacs, totalling ₹ 42 lacs, therefore, the demand notice is not a valid notice in terms of Section 138 NI Act and the very basis of the complaint is thus an invalid notice which renders the complaint filed by the respondent unsustainable in law. (iv) That the petitioner has paid more than what was received by him from the respondent and, therefore, the dishonoured cheques are without any consideration and, therefore, cannot be claimed to be issued for discharging any lawful debt. 5. Mr. Qayoom, with a view to lend support to the grounds of challenge urged by him would rely upon the judgments of Hon ble Supreme Court in the cases of Satishchandra Rattanlal Shah v. State of Gujarat, AIR 2019 SC 1538 and Krishna Lal Chawla v. State of U.P, AIR 2021 SC 1381. 6. Heard learned counsel for the petitioner and perused the documents on record. 7. It is not the case of the petitioner that the ingredients of Section 138 of the N.I. Act are not made out and, therefore, the impugned order is bad in law and the complaint itself not maintainable. Though Section 138 NI Act penalizes the dishonour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its order dated 17.11.2020 issued process for securing presence of the petitioner (accused). It is also true that order dated 17.11.2020 was set aside by the Court of Sessions Judge, Budgam in a revision petition filed by the petitioner. The Revisional Court found that the impugned order was bereft of satisfaction recorded by the Magistrate before issuing the process and that there was defect in taking cognizance as per law. While accepting the revision petition and setting aside the order dated 17.11.2020 the revisional Court relegated both the parties to the learned Magistrate, who was called upon to re-consider the matter afresh after hearing both the parties. 10. It is worthwhile to notice, neither at the time of taking cognizance of the complaint nor at the time of issuance of process the accused in required to be heard in the matter. The accused comes into picture only after the process for his appearance in the criminal complaint is issued and he appears before the Magistrate. 11. Be that as it is, in compliance to the directions of the revisional Court, the trial Court heard both the parties and passed the impugned order. 12. Before proceeding further and to bette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore whom the complaint of facts constituting offences are presented, mix up the cognizance and the issuance of process . Generally, the learned Magistrates are of the view that the cognizance of offences is taken not on presentation of the complaint but after recording the preliminary statement of the complainant and his witness, in attendance. This is not the correct position of law. The cognizance in such matters is taken under Section 190 Cr.P.C and it is only after the Magistrates takes cognizance under Section 190 Cr.P.C, he proceeds to record the preliminary statement of the complainant and his witness, if any present, so as to find out whether the allegation in the complaint, which constitutes an offence, are substantiated. Sometimes the Magistrates, not being satisfied even after recording the preliminary statement of the complainant and his witness, postpones the issue of process and resort to inquiry under Section 202 of the Cr.P.C. It thus needs to be understood that stage of cognizance is over once the Magistrate decides and directs recording of the statement of complainant and his witness with a view to take next step in the matter. It could be issuance of proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where a complaint of facts constituting alleged offences though made in writing is not supported by any documentary evidence. In the instant case, the averments made in the complaint are duly substantiated and fully corroborated by the documentary evidence appended with the complaint viz. three dishonoured original cheques, memo by the bank showing the reasons for dishonour of cheques, demand notice and proof of service of that notice, etc etc. 19. It is interesting to note that the petitioner, who was yet to be put on notice by the trial court, was also heard in the matter in compliance to the order dated 18.02.2021 passed by the revisional court. From the order impugned, it clearly transpires that the complaint was resisted by the petitioner on many grounds but it was not the case of the petitioner before the trial court that the preliminary statement of the complainant and his witness were not substantiating the case set up by the complainant in the complaint. Otherwise also in the matter of complaint under Section 138 NI Act, in which the ingredients of offence are clearly pleaded and made out with the support of documentary evidence, the omission to discuss the preliminary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section as a whole and applying commonsense, from the words, as stated above, it is clear that the legislature intended that in notice under clause (b) to the proviso, the demand has to be made for the cheque amount. According to Dr. Dhawan, the notice of demand should not contain anything more or less than what is due under the cheque. 8. It is well settled principle of law that the notice has to he read as a whole. In the notice, demand has to be made for the said amount i.e. cheque amount. If no such demand is made the notice no doubt would fall .short of its legal requirement Where in addition to said amount there is also a claim by way of interest, cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving the break up of the claim the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would he severable- and will not invalidate the notice. If, however, in the notice an ommbus demand is made without specifying what was due under the dishonored cheque, notice might well fail to meet the legal requirement and may be rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in the matter of dishonour of cheques on the grounds of insufficiency of funds in the account maintained by a person with the banker and that it exceeds the amount arranged to be paid. Generally, in the criminal law, mens rea is an essential component of crime but dishonour of cheque is a criminal offence where there is no need to prove a mens rea. The offence under Section 138 would be made out only if the dishonoured cheque is drawn by the drawer in favour of the drawee for discharge of legally enforceable debt or liability. Essentially, there is element of civil liability between the drawer and drawee of the cheque but if the ingredients of Section 138 are made out, it is a criminal offence to be tried in the manner provided under Section 142 of the NI Act. 27. Similarly the judgment in the case of Krishnalal Chawla (supra) relied upon by the learned counsel by the petitioner lays down the parameters for exercise of jurisdiction by the Magistrate to issue process and summons under Section 202 read with Section 204 of the Code of Criminal Procedure. The Supreme Court in the aforesaid judgment has clearly delineated the role of the Magistrate upon receiving of a private co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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