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TMI Blog2024 (5) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for one year along with payment of compensation amount of Rs. 8,00,000/- to the opposite party No. 2 (hereinafter referred to as the complainant) and in default of payment of compensation further undergo simple imprisonment for one month under section 138 of the N.I. Act. Arguments of the petitioner. 4. The learned counsel for the petitioner submits that the basic ingredient of offence under section 420 of the Indian Penal Code is completely missing in the present case. He has submitted that there were transactions of money in connection with sale and purchase of land and an oral agreement was entered into between the parties and when the sale deed was not registered, the complainant approached the petitioner to get back the money and consequently a cheque was issued for the entire amount of Rs. 4,85,000/- which bounced on account of the account being closed. 5. He submits that so far as the transaction of money regarding sale and purchase of land is concerned, there is no allegation in the entire complaint that the same had any element of cheating. However, the learned courts while convicting the petitioner for the offence under Section 420 IPC have found the petitioner guil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has submitted that a view has been taken that issuance of a cheque with respect to closed account would amount to cheating. 9. So far as the offence under section 138 of the Negotiable Instrument Act is concerned, the learned counsel submits that even if the time line is not as per law, the right to file the complaint has to remain intact and it may be kept open to the complainant to file a fresh complaint with a petition for condonation of delay. Findings of this Court. 10. The factual matrix of the complaint case filed by the complainant was that in the month of January 2014, the petitioner proposed the complainant to sell certain land and on different dates the complainant paid a total amount of Rs. 4,85,000/- as advance for the purchase of land as per the oral agreement regarding sale-purchase of land. It was alleged in the complaint that in-spite of repeated requests the petitioner did not execute the registered deed of sale in favour of the complainant and upon demand to refund the amount, the petitioner gave an account payee cheque of Rs. 4,85,000/- on 09.07.2014 which was deposited on 17.07.2014 but the cheque was dishonored on account of the account being closed. A l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner neither gave land nor returned the money. P.W. 4 is the complainant himself. He has stated in his before charge evidence that the petitioner had taken Rs. 4,85,000/- dishonestly for selling the land but neither returned the money nor sold the land and with dishonest intention had given cheque of a closed account. He has stated that after taking the money a date was fixed for registry of land but the petitioner did not come to the registry office and when the complainant demanded the money, he gave an account payee cheque of Rs. 4,85,000/-. The cheque was deposited on 17.07.2014 but returned on account of bank account closed and thereafter the complainant gave legal notice to the petitioner. In his cross examination he could not say the boundary of the land and no agreement was made with respect to the land. 14. The defence also examined two witnesses stating that petitioner had given ten blank cheques to Manoj Jain and not to the complainant. D.W. 2 stated that the petitioner was the younger brother of his father- in-law and his wife Chandni Jain had filed a case against the petitioner being PCR Case No. 191/15 and in cross examination he has stated that the case was fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 138 of the N.I. Act that the petitioner admitted his signature on the cheque and failed to rebut the presumption in law regarding legally enforceable debt. 18. The arguments of both the parties and finding with respect to conviction under section 420 IPC has been recorded in paragraph 15 and 16 respectively of the appellate court judgment which are quoted as under: - 15. It is further argued by appellant's counsel that it is settled principle that to attract Section 420 IPC there should be intention to cheat from the very beginning of the agreement which is not proved in the given case hence Section 420 IPC is not attracted at all. Whereas other side says that the prosecution witnesses C.W.1 and C.W.4 have stated that accused himself approached the complainant and offered to sale land and after receiving a handsome amount he refused to execute the sale deed itself shows that there was some dishonest intention from very inception of the agreement. More so, the accused has issued a cheque of the account which was already closed also shows a mala fide intention on the part of the accused. This view also finds support from the decision of The Hon'ble Jharkhand High Court in C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finds that no question was put to the petitioner with regard to any element of cheating or regarding his intention to cheat the complainant much less intention to cheat right from the inception of transactions between the parties of sale purchase of land. Rather there was no question that at the time of dealing with the landed properly and taking advance money of Rs. 4,85,000/- for purchase of land, the petitioner had any intention to cheat. Further in connection with issuance of cheque also it was simply stated that the cheque was returned as the bank account of the petitioner was closed but no question was put with regard to any intention to cheat at the time of issuance of cheque. Thus, this court finds that no question whatsoever was put to the petitioner under section 313 with regard to basic ingredient of offence under section 420 IPC i.e. intention to cheat much less any intention to cheat at the very inception of the transaction regarding sale purchase of land or even at the stage of issuance of cheque. 23. This court finds that the specific case of the complainant as per the complaint was that there was an oral agreement between the parties that the petitioner would sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd thereby dishonestly induces the person deceived- (a) to deliver any property to any person, or (b) to consent that any person shall retain any property, or (c) to make, alter or destroy the whole or any part of a valuable security, or (d) to make, alter or destroy anything which is signed or sealed and which is capable of being converted into a valuable security. shall be punished with imprisonment of either description for a term which may extend to seven years and shall also be liable to fine. 25. Thus the required ingredient to constitute an offence under section 420 of I.P.C, that is, dishonest intention prior to entering into monetary transaction is completely missing when the act to return money by issuing cheque of a closed account is seen in isolation. However, such a fact can certainly be a relevant when seen in the light of the nature of money transaction involved in a particular case. In a case where the initial money transaction is coupled with an allegation of a dishonest intention right at its inception, the act of refund of money by issuance of cheque of a closed account would be a circumstance to be taken into account to come to a finding of dishonest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawn on a closed account and a FIR was instituted for offence under section 420 I.P.C. The magistrate held the accused guilty and the appellate court acquitted him of the charges and the de-facto complainant was the petitioner before the high court challenging the order of acquittal. In the said background an issue was framed for consideration- 'whether the offence of cheating punishable under 417 or under section 420 IPC is attracted if a person, after voluntarily closing the account, issues a cheque towards discharge of pecuniary liability, leading to the inevitable consequence of its dishonor on the ground 'account closed'? From the perusal of the judgment, it is apparent that the case was instituted under section 420 IPC and was sent for investigation and thereafter the accused was tried under section 420 of IPC. In the said case, the money was sought to be returned by issuance of cheque of a closed account and the Hon'ble High court convicted the petitioner under section 417 of IPC and not under section 420 IPC. The Hon'ble High court considered the act of the accused who received an amount of Rs. 50,000/- from the petitioner upon the unfulfilled promise of arranging j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to have been served only upon expiry of 30 days and thereafter 15 days is also available to pay the cheque amount and then only the cause of action to file the complaint case could arise. Accordingly, the complaint, so far as it relates to offence under section 138 of N.I. Act is concerned, is premature. 34. In the judgment passed by the Hon'ble Supreme Court reported in (2014) 10 SCC 713 (Yogendra Pratap Singh vs. Savitri Pandey and Another) it has been held by the Hon'ble Supreme Court at Paragraphs- 30, 31, 36, 37 to 38 which reads as under: "30. Section 138 of the NI Act comprises of the main provision which defines the ingredients of the offence and the punishment that would follow in the event of such an offence having been committed. Appended to this section is also a proviso which has three clauses viz. (a), (b) and (c). The offence under Section 138 is made effective only on fulfilment of the eventualities contained in clauses (a), (b) and (c) of the proviso. For completion of an offence under Section 138 of the NI Act not only the satisfaction of the ingredients of offence set out in the main part of the provision is necessary but it is also imperative that all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is barred in law from taking cognizance of such complaint. It is not open to the court to take cognizance of such a complaint merely because on the date of consideration or taking cognizance thereof a period of 15 days from the date on which the notice has been served on the drawer/accused has elapsed. We have no doubt that all the five essential features of Section 138 of the NI Act, as noted in the judgment of this Court in Kusum Ingots & Alloys Ltd. and which we have approved, must be satisfied for a complaint to be filed under Section 138. If the period prescribed in clause (c) of the proviso to Section 138 has not expired, there is no commission of an offence nor accrual of cause of action for filing of complaint under Section 138 of the NI Act. 37. We, therefore, do not approve the view taken by this Court in Narsingh Das Tapadia and so also the judgments of various High Courts following Narsingh Das Tapadia that if the complaint under Section 138 is filed before expiry of 15 days from the date on which notice has been served on the drawer/accused, the same is premature and if on the date of taking cognizance, a period of 15 days from the date of service of notice on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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