Thursday, 12 November 2015

When one complaint is maintainable in respect of dishonour of ten cheques?

 Negotiable Instruments Act, 1881, Sections 138 – Code of criminal Procedure, 1973 – Section 219 – Joint complaint – 10 cheques issued under same transaction – dishonored – one complaint in respect of all cheques maintainable .
 Perusal of the aforesaid provision leaves no doubt that the required notice had been issued to the drawer of the said cheque. It is not the requirement of law that the said notice must be sent to each of the partners. The drawer was the firm and only one of the partners may act on behalf of it. Once the notice was issued to the drawer, it would be compliance with Section 138 of the Negotiable Instruments Act, 1881.

It was urged vehemently that in each of the complaints more than three cheques are alleged to have been issued while under Section 219 of the Code of Criminal Procedure when a person is accused of more offences than one of the same kind committed within the space of 12 months, he can be charged and tried at one trial for any number of them not exceeding three. To buttress this argument, learned counsel relied on the judgment of the Madras High Court in the case of S. Kiran v. L.C. Corporation [1994] ISJ (Banking) 556.
10. In the case of S. Kiran v. L. C, Corporation [1994] IS) (Banking) 556, certain goods had been sold by the complainant to the accused. After giving credit to various part payments made by the accused, a certain sum was found due. The accused issued five cheques. When the said cheques were presented, they were returned dishonoured. After giving the notice a complaint was filed. It was held that the complainant will have to choose as to which of these five cheques, he will pick up the three regarding which prosecution would be maintainable but proceedings were not quashed. With deep respect it is difficult to subscribe to this view-point. Some help can be taken in this regard from the decision of the Supreme Court in the case of State of Andhra Pradesh v. Kandi-malla Suhbaiah, AIR 1961 SC 1241. The facts were different but it was observed that where alleged offences had been committed in course of the same transaction, the above said limitation will not apply. A similar argument had been advanced before the Delhi High Court in the case of Stalion Shox Co. Pvt. Ltd. v. Auto Tensions (P.) Ltd. [1994] 79 Comp Cas 808 ; [1994] 1 RCR 3. Therein too it was argued that separate complaint should have been filed with respect to each cheque that was dishonoured. The learned single judge of that court negatived the plea by holding that no prejudice is caused to the petitioner by filing of one complaint. However, the accused were permitted to raise these points before the trial court. In fact, for purposes of the present order, one is constrained to observe that as per the allegations a specific amount was due. Certain post-dated cheques were issued. They were numbering 9/10 (already mentioned above in individual complaint). It was, therefore, one transaction and to state that there has to be a separate complaint with respect to each cheque that was dishonoured, will not be correct. Section 219 of the Code of Criminal Procedure, therefore, will not be a bar in the peculiar facts of the case. Therefore, this court has no hesitation in repelling the said arguments.
Punjab-Haryana High Court
Anita vs Anil K. Mehra And Ors. on 17 November, 1995
Equivalent citations: 1998 94 CompCas 584 P H, (1996) 112 PLR 321

Bench: V Aggarwal


1. Since common questions are involved, therefore, all the three criminal revisions can be disposed of together.
2. The relevant facts are that the petitioner, Ms. Anita, filed a complaint against the respondents asserting that the respondent, Anil K. Mehra, as partner of the firm, Mehra Enterprises, of which respondents Nos. 2 and 3 are also partners, issued ten cheques for Rs. 2,066.66 each in her favour. They had been drawn on the Central Bank of India, Sector 22-C, Chandigarh, to discharge the debt of Rs. 20,666.60 on account of the loan advanced. The details of the cheques and their numbers had been given in the complaint. The cheques had been presented for encashment and were received back with the remarks "exceeds arrangements". A notice was issued to the firm calling upon it to pay the amount of cheques within 15 days. It was received on April 22, 1989, but the payment was not made. Instead a reply was sent. The learned Judicial Magistrate summoned the respondents as accused persons.
3. On identical facts, the petitioner, Santosh Kumari, preferred another criminal complaint with respect to the offence under Section 138 of the Negotiable Instruments Act. Herein nine cheques of Rs. 2,066.66 had been issued by the respondent, Anil K. Mehra, of the same concern which have been dishonoured in a similar manner.
4. The third complaint was filed by Ms. Sangita against the respondents asserting that the respondent, Anil K. Mehra, partner of the same firm issued ten cheques for Rs. 1,550 each and in a similar manner the same were dishonoured with the remarks "exceeds arrangement". The learned judicial magistrate had summoned the respondents as the deceased.
5. The respondents had preferred criminal revisions in the Court of Sessions. The learned Additional Sessions Judge, Chandigarh, vide the impugned judgment dated July 15, 1993, relying on the decision of this court in the case of Gulshan Rai v. Anil Kumar Sawhney [1992] ISJ (Banking) 208 ; [1993] 76 Comp Cas 685 (P & H) accepted the revisions and quashed the impugned complaints. The respondents were discharged.
6. Aggrieved by the said judgments of the learned Additional Sessions Judge, Chandigarh, the present revision petitions have been filed.
7. It is not the subject-matter of any controversy that the decision of this court referred to above in the case of Gulshan Rai v. Anil Kumar Sawhney [1992] ISJ (Banking) 208 ; [1993] 76 Comp Cas 685 (P & H) which was relied on by the learned Additional Sessions Judge has since been set aside by the Supreme Court of India in the case titled Anil Kumar Sawhney v. Gulshan Rai [1994] 79 Comp Cas 150 ; [1994] 1 RCR 150. The Supreme Court settled the controversy by holding that a post-dated cheque shall be deemed to have been drawn on the date it bears and the period of six months has to be reckoned from the date mentioned on the face of the cheque.
8. That being the position, the reasoning of the learned Additional Sessions Judge in this regard cannot be sustained. However, the respondents' learned counsel took up certain other contentions so as to support the fact that the proceedings had to be quashed and the revision petitions must fail.
9. It was urged vehemently that in each of the complaints more than three cheques are alleged to have been issued while under Section 219 of the Code of Criminal Procedure when a person is accused of more offences than one of the same kind committed within the space of 12 months, he can be charged and tried at one trial for any number of them not exceeding three. To buttress this argument, learned counsel relied on the judgment of the Madras High Court in the case of S. Kiran v. L.C. Corporation [1994] ISJ (Banking) 556.
10. In the case of S. Kiran v. L. C, Corporation [1994] IS) (Banking) 556, certain goods had been sold by the complainant to the accused. After giving credit to various part payments made by the accused, a certain sum was found due. The accused issued five cheques. When the said cheques were presented, they were returned dishonoured. After giving the notice a complaint was filed. It was held that the complainant will have to choose as to which of these five cheques, he will pick up the three regarding which prosecution would be maintainable but proceedings were not quashed. With deep respect it is difficult to subscribe to this view-point. Some help can be taken in this regard from the decision of the Supreme Court in the case of State of Andhra Pradesh v. Kandi-malla Suhbaiah, AIR 1961 SC 1241. The facts were different but it was observed that where alleged offences had been committed in course of the same transaction, the above said limitation will not apply. A similar argument had been advanced before the Delhi High Court in the case of Stalion Shox Co. Pvt. Ltd. v. Auto Tensions (P.) Ltd. [1994] 79 Comp Cas 808 ; [1994] 1 RCR 3. Therein too it was argued that separate complaint should have been filed with respect to each cheque that was dishonoured. The learned single judge of that court negatived the plea by holding that no prejudice is caused to the petitioner by filing of one complaint. However, the accused were permitted to raise these points before the trial court. In fact, for purposes of the present order, one is constrained to observe that as per the allegations a specific amount was due. Certain post-dated cheques were issued. They were numbering 9/10 (already mentioned above in individual complaint). It was, therefore, one transaction and to state that there has to be a separate complaint with respect to each cheque that was dishonoured, will not be correct. Section 219 of the Code of Criminal Procedure, therefore, will not be a bar in the peculiar facts of the case. Therefore, this court has no hesitation in repelling the said arguments.
11. In that event respondents learned counsel urged that no notice had been served on the respondents. The said notice had simply been issued to the firm of which the respondents are alleged to be the partners. In his view, therefore, the notice was invalid and the complaint cannot proceed. Section 138 of the Negotiable Instruments Act, 1881 (as amended) reads :
"138. Dishonour of cheques for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both :
Provided that nothing contained 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 by 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.
Explanation.--For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other liability."
12. Perusal of the aforesaid provision leaves no doubt that the required notice had been issued to the drawer of the said cheque. It is not the requirement of law that the said notice must be sent to each of the partners. The drawer was the firm and only one of the partners may act on behalf of it. Once the notice was issued to the drawer, it would be compliance with Section 138 of the Negotiable Instruments Act, 1881.
13. The last submission in this regard was that there was no allegation made in the complaint that the respondents were responsible for the conduct of the business of the firm and consequently they cannot be held liable. Section 141 of the Negotiable Instruments Act, 1881, holds the key to this controversy. It is being reproduced below for the sake of facility :
"141. Offences by companies.--(1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in Sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation-- For the purpose of this section--(a) 'company' means any body corporate and includes a firm or other association of individuals ; and
(b) 'director', in relation to a firm, means a partner in the firm." The relevant provisions reveal that for purposes of Section 141 of the Negotiable Instruments Act, 1881, the expression "company" also includes a firm or other association of individuals. Therefore, the partnership firm would be included therein. The decision of this court in the case of Manju Podar v. Ashwani Kumar [1994] 1 RCR 639 ; [1996] 86 Comp Cas 631 is of no avail because in the cited case, there was a specific allegation in the complaint that the alleged accused were directors of the company. They were in charge of and responsible to the company for conduct of business,
14. Attention was drawn towards the decision of this court in the case of Sushil Singla v. Haripal Singh [1994] 1 RCR 621 ; [1998] 94 Comp Cas 580. A complaint in the cited case was filed under the Negotiable Instruments Act. 1881. There was no averment that the directors were in charge of and responsible to the company for the conduct of the business. The complaint qua these directors was quashed, The same view prevailed in the case of Amrit Rani v. Malhotra Industrial Corporation [1992] ISJ (Banking) 129.
15. What is the position in the present case ? The complaint does not make any assertion so far as respondents Nos. 2 and 3 are concerned that at the time when the offence was committed, they were in charge of and responsible to the company for the conduct of business of the said firm. There is no averment that the offence had been committed with the consent or connivance or is attributable to any neglect on the part of these two partners. Consequently, as against these two respondents the revisions must fail because the complaint could not proceed for lack of necessary particulars. The position as against Anil K. Mehra is different. The answer against him is obvious, He is not alleged to be the person responsible for conduct of the business of the firm. But the gap is filled up from the fact that it is he who had issued the cheques in favour of each of the petitioners separately. He may show and try to bring his case within the known exceptions of law but as for the present he can be stated to be in charge of and responsible to the firm for conduct of business. At this initial stage, therefore, the complaint as against him can certainly proceed.


16. For these reasons given above, the revision petitions as against respondents Nos. 2 and 3 fail and are dismissed. However, as against respondent No. 1, the judgment of the learned additional judge is set aside. As against him, the complaint will proceed in the court of learned Judicial Magistrate.
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