“Section 142 of the NI Act prescribes the mode and so also the time within which a complaint for an offence under Section 138 of the NI Act can be filed. A complaint made under Section 138 by the payee or the holder in due course of the cheque has to be in writing and needs to be made within one month from the date on which the cause of action has arisen under clause (c) of the proviso to Section 138. The period of one month under Section 142(b) begins from the date on which the cause of action has arisen under clause (c) of the proviso to Section 138. However, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within the prescribed period of one month, a complaint may be taken by the Court after the prescribed period.
Now, since our answer to question (i) is in the negative, we observe that the payee or the holder in due course of the cheque may file a fresh complaint within one month from the date of decision in the criminal case and, in that event, delay in filing the complaint will be treated as having been condoned under the proviso to clause (b) of Section 142 of the NI Act. This direction shall be deemed to be applicable to all such pending cases where the complaint does not proceed further in view of our answer to question (i).
As we have already held that a complaint filed before the expiry of 15 days from the date of receipt of notice issued under clause (c) of the proviso to Section 138 is not maintainable, the complainant cannot be permitted to present the very same complaint at any later stage. His remedy is only to file a fresh complaint; and if the same could not be filed within the time prescribed under Section 142(b), his recourse is to seek the benefit of the proviso, satisfying the Court of sufficient cause”.REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.605 OF 2012
Yogendra Pratap Singh Vs Savitri Pandey & Anr.
Dated;September 19, 2014.
R.M. LODHA, CJI.
In the order of 03.04.2012, a two-Judge Bench of this Court
granted leave in SLP (Crl.) No.5761 of 2010. The Court formulated the
following two questions for consideration:
(i) Can cognizance of an offence punishable under Section
138 of the Negotiable Instruments Act 1881 be taken on the
basis of a complaint filed before the expiry of the period of
15 days stipulated in the notice required to be served upon
the drawer of the cheque in terms of Section 138 (c) of the
Act aforementioned? And,
(ii) If answer to question No.1 is
complainant be permitted to
again notwithstanding the fact that
stipulated under Section 142 (b)
complaint has expired?
2.
in the negative, can the
present the complaint
the period of one month
for the filing of such a
The two-Judge Bench in that order noticed Section 138 and
Section 142 of the Negotiable Instruments Act, 1881 (“NI Act”) and also
referred to the two decisions of this Court, namely, (1) Narsingh Das
Tapadia1 and (2) Sarav Investment & Financial Consultancy2. The Bench
also noticed the judgments of High Courts of Calcutta, Orissa, Bombay,
Punjab and Haryana, Andhra Pradesh, Allahabad, Gauhati, Rajasthan,
Delhi, Madhya Pradesh, Himachal Pradesh, Madras, Jammu and Kashmir
and Karnataka and observed that judicial opinion on the first question was
split among the High Courts in the country and so also the two decisions of
this Court in Narsingh Das Tapadia1 and Sarav Investment & Financial
Consultancy2. Even amongst the two High Courts, namely, Jammu and
Kashmir and Karnataka, the Bench noticed that the decisions on the first
question were not uniform. It was felt by the two-Judge Bench that the
conflict
in
the
judicial
pronouncements
needed
to
be
resolved
authoritatively and, accordingly, referred the above two questions for
consideration by a three-Judge Bench of this Court.
1
Narsingh Das Tapadia v. Goverdhan Das Partani and Anr.; [(2000) 7 SCC 183]
Sarav Investment & Financial Consultancy Private Limited and Anr. v. Llyods Register of Shipping
Indian Office Staff Provident Fund and Anr.; [(2007) 14 SCC 753]
3. This is how the matter has been placed before us.
4. It is not necessary to narrate the facts in detail. Suffice it to refer to
factual matrix noted in the referral order which is as follows:
The appellant filed a complaint under Section 138 of the
Negotiable Instruments Act against respondent No.1 Smt.
Savitri Pandey in the Court of Additional Civil Judge
(J.D.)/Magistrate, Sonbhadra in the State of Uttar Pradesh.
The respondent's case was that four cheques issued by the
accused-respondent in his favour were dishonoured, when
presented for encashment. A notice calling upon the
respondent-drawer of the cheque to pay the amount covered
by the cheques was issued and duly served upon the
respondent as required under Section 138 (c) of The
Negotiable Instruments Act, 1881. No payment was,
however, made by the accused till 7th October, 2008 when a
complaint under Section 138 of the Act aforementioned was
filed before the Magistrate. Significantly enough the notice in
question having been served on 23 rd September, 2008, the
complaint presented on 7th October, 2008 was filed before
expiry of the stipulated period of 15 days. The Magistrate all
the same took cognizance of the offence on 14 th October,
2008 and issued summons to the accused, who then
assailed the said order in a petition under Section 482 of the
Cr.P.C. before the High Court of Judicature at Allahabad.
The High Court took the view that since the complaint had
been filed within 15 days of the service of the notice the
same was clearly premature and the order passed by the
Magistrate taking cognizance of the offence on the basis of
such a complaint is legally bad. The High Court accordingly
quashed the complaint and the entire proceedings relating
thereto in terms of its order impugned in the present appeal.
5.
Before we advert to the two decisions of this Court in
Narsingh Das Tapadia1 and Sarav Investment & Financial Consultancy2,
and few decisions of the High Courts, we think it proper to refer to Sections
138 and 142 of the NI Act. Section 138 of the NI Act, as it stands today
after amendment by Act 55 of 2002, defines the ingredients of the offence
3
Page 3
and the punishment that would follow in the event of such an offence
having been committed and the proviso appended thereto makes certain
eventualities/conditions precedent for the commission of offence. It reads
as under:
138. Dishonour of cheque 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 honor 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 provisions of this Act, be punished
with imprisonment for a term which may be extended to two
years, 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 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.
6.
Section 142 deals with cognizance of offences.
The said
provision, after amendment by Act 55 of 2002, is as under:
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 .
7.
It may not be out of place to mention here that entire Chapter
XVII of the NI Act was brought in the statute by Act 66 of 1988 w.e.f.
01.04.1989. This Chapter comprises of Sections 138 to 147.
8.
The other two provisions which deserve mention are Sections
2(d) and 190 of the Code of Criminal Procedure, 1973 (“Code”). Section
2(d) defines complaint in the context of the Code as follows:
2(d)"complaint" means any allegation made orally or in
writing to a Magistrate, with a view to his taking action under
this Code, that some person, whether known or unknown,
has committed an offence, but does not include a police
report.
9.
Chapter XIV of the Code bears the title ‘Conditions Requisite
for Initiation of Proceedings’. This chapter has only one provision namely,
Section 190. Section 190 makes provision for cognizance of offences by
Magistrates. It reads as under:
190. Cognizance of offences by Magistrates. – (1) Subject to the
provisions of this Chapter, any Magistrate of the first class, and any
Magistrate of the second class specially empowered in this behalf
under sub-section (2), may take cognizance of any offence—
(a)
upon receiving a complaint of facts which constitute
such offence;
(b)
upon a police report of such facts;
(c)
upon information received from any person other
than a police officer, or upon his own
knowledge, that
such
offence
has
been
committed.
(2)
The Chief Judicial Magistrate may empower any
Magistrate of the second class to take cognizance under sub-
section (1) of such offences as are within his competence to inquire
into or try.
10.
Before the decision of this Court in Narsingh Das Tapadia1, six
High Courts had occasion to consider the question whether the complaint
under Section 138 of the NI Act was maintainable when the stipulated
period of 15 days of the receipt of the notice as provided in clause (c) of
the proviso appended to Section 138 had not expired. The first of such
decisions, decided as early as on 29.07.1992 is of the Bombay High Court
in Rakesh Nemkumar Porwal3. The Division Bench of the Bombay High
Court held that as the complaint was presented within the period of 15
days of the service of notice effected on the accused, the complaint was
not maintainable for commission of offence under Section 138 of the NI Act
as no offence can be said to have been committed on the date of lodgment
3
Rakesh Nemkumar Porwal v. Narayan Dhondu Joglekar and Anr.; [1993 Cri.L.J. 680]
of the complaint. Reading Section 138(c) and Section 142 (b) together,
the Division Bench of the Bombay High Court held that no offence can be
said to have been committed until and unless the period of 15 days as
prescribed under clause 138(c) has in fact elapsed.
11.
The above view taken by the Division Bench of the Bombay
High Court is echoed by the High Courts of Punjab and Haryana (Ashok
Verma)4, Andhra Pradesh (N. Venkata Sivaram Prasad)5, Karnataka
(Ashok Hegde)6, Orissa (Sri Niranjan Sahoo)7 and Jammu and Kashmir
(M/s Harpreet Hosiery Rehari)8.
12.
In the case of Ashok Verma4, the argument of the petitioner
accused before the Punjab and Haryana High Court was that Section 138
of the NI Act envisaged a clear 15 days notice to the drawer of the cheque
and the time was to be computed from the date of the receipt of the notice,
but the impugned complaint had been filed before the expiry of 15 days
and the complaint was liable to be quashed on this ground. Dealing with
the argument, the Punjab and Haryana High Court referred to the decision
of the Bombay High Court in Rakesh Nemkumar Porwal3 and on going
through the provisions of Section 138 held as under:
4
5
6
7
8
Ashok Verma v. Ritesh Agro Pvt. Ltd. and Anr.; [(1995) 1 Bank CLR 103]
N. Venkata Sivaram Prasad v. M/s Rajeswari Constructions; [1996 Cri. L.J. 3409]
Ashok Hegde v. Jathin v. Attawan; [1997 Cril. L.J. 3691]
Sri Niranjan Sahoo v. M/s Utkal Sanitary, BBSR; [1998 (3) Crimes 188]
M/s Harpreet Hosiery Rehari v. Nitu Mahajan; [2000 Cri.L.J. 3625]
A perusal of the above section shows that while the section
defines the necessary ingredients of the offence and
punishment that can be awarded for the commission of the
offence, the proviso to the section lays down the conditions
precedent for the commission of the offence. According to
this proviso the necessary ingredients of the offence are that
the cheque was presented to the bank within a period of six
months from the date on which it was drawn or the period of
its validity, that the cheque is returned unpaid because of
insufficiency of funds or that the amount of the cheque
exceeded the amount arranged to be paid from the bank and
the payee gave a notice to the drawer claiming the amount
within 15 days of the receipt of the information from the bank
regarding the return of the cheque and the drawer failed to
make payment within 15 days of the receipt of the notice.
Under Sub-clause (c) of the proviso a 15 days time is
granted to the drawer of the cheque to make payment and
unless this period elapsed and no payment was made, the
drawer was not liable for any offence under Section 138 of
the Act.
13.
The Division Bench of the Andhra Pradesh High Court in N.
Venkata Sivaram Prasad5 was confronted with the question as to whether
the Magistrate can take cognizance of the complaint given in the case
under consideration and proceed with the trial of the complaint after the
expiry of 15 days as prescribed under Section 138(c) of the NI Act. The
question that fell for consideration before the Andhra Pradesh High Court
involved the aspect whether the offence under Section 138 can be said to
be complete only if the drawer fails to pay the amount within 15 days of the
receipt of the notice as contemplated in proviso (c) to Section 138. The
Division Bench took into consideration the provisions contained in Section
138 and Section 142 of the NI Act and so also Section 2(d), Section 2(n)
and Section 190 of the Code and held that until and unless the criteria laid
down in Section 138 are complied with, it would not constitute an offence.
The Division Bench of the Andhra Pradesh High Court held:
Proviso (c) clearly stipulates that the Section does not apply
unless the drawer of the cheques fails to make the payment
to the payee within 15 days of the receipt of the said notice.
Thus, the payee has been given liberty to make the payment
within 15 days of the receipt of the notice even though the
cheque was returned by the Bank unpaid. Hence, the
reading of Proviso (c) to Section 138 clearly denotes that it
would not be an offence if the drawer pays the amount within
a period of 15 days as a specified therein. In such
circumstances, there could not have been any complaint
alleging the violation of Section 138. The pre-offence period
granted to the payee should be construed strictly, otherwise
the very purpose of Section 138(c) of the Negotiable
Instruments Act would be frustrated. The complainant should
be able to point out to the offence under Section 138 when
the complaint was filed. When the complaint is filed even
before the offence is completed, it cannot be said that the
offence is made out and, therefore, such complaint is invalid
in the eye of law. As already noticed, under Section 142 of
the Act, no Court shall take cognizance of any offence
punishable under Section 138, except upon a complaint in
writing made by the payee. Therefore, the necessary
ingredient enabling the Magistrate to take cognizance of the
offence is that there should be a complaint in writing by the
payee and the said complaint should disclose an offence
under Section 138. In the complaint made by the respondent
before the Magistrate, no offence could have been disclosed
as the time prescribed under Section 138, Proviso (c) was
not exhausted by the time the complaint was presented to
the Magistrate. Even by the date of service of summons,
there was no further complaint in writing to the effect that
even after the expiry of 15 days period as mentioned in
proviso (c), the drawer failed to pay the amount.
14.
The Andhra Pradesh High Court in N. Venkata Sivaram
Prasad5 also considered the question in light of Section 190 of the Code
and held as under:
The matter may also be viewed from the provisions of
Section 190, Cr.P.C., where the Magistrate is empowered to
take cognizance of any offence upon receiving a complaint
of facts which constitute such an offence. We have already
referred to the definition of the 'complaint' in Cr.P.C.
Therefore, for taking cognizance of the offence, there should
have been a complaint containing the facts which constitute
an offence. Unless the offence is ex facie disclosed in the
complaint, the Magistrate cannot have any competence to
take cognizance of the offence and proceed further. In the
present case, on the facts stated in the complaint, there
could not be any offence. As the complaint on the basis of
which the Magistrate proceeded to take cognizance is not a
complaint at all in the eye of law, the question of proceeding
with the case on the basis of such complaint does not arise.
In the instant case, the Magistrate had no means of knowing
whether the offence was completed subsequent to the date
of the complaint because, as already stated, there was no
further written complaint as required by Section 142(a). The
subsequent events on completion of the offence can only
come to the knowledge of the Court by way of complaint in
writing. Apart from the original complaint which does not
disclose any offence, there is no further complaint. As rightly
pointed out by the learned Additional Public Prosecutor,
when the special law specifies not only the ingredients of the
offence but also the procedure, the requirements have to be
strictly complied with. Hence, we are of the opinion that the
Court cannot proceed with the case even after the lapse of
time as prescribed by Section 138(c) of Negotiate
Instruments Act.
It was, thus, held by the Andhra Pradesh High Court that the Magistrate
should not have acted upon a premature complaint which was not a
complaint at all in the eye of law.
15.
In Ashok Hegde6, the single Judge of the Karnataka High
Court while dealing with the contention raised by the petitioner therein that
the complainant has not given 15 days’ time to the petitioner as
contemplated under Section 138(b) of the NI Act and the complaint was
premature and should not have been entertained, the single Judge held,
“..... from the above, it is clear that he received the notice back on
21.09.1989.
Even accepting that the petitioner refused the notice on
20.09.1989, the respondent ought to have filed this complaint after the
expiry of 15 days from the date of receipt of the notice.
issuance of notice cannot be taken into account........
The date of
Therefore, the
cause of action had not arisen to file the complaint against the petitioner
and the complaint was premature.......”
16.
The Orissa High Court in Sri Niranjan Sahoo7 also took the
view that if the complaint case is filed before expiry of 15 days as provided
in clause (c) to the proviso of Section 138, then cognizance of the offence
cannot be taken in view of the provision in clause (b) of Section 142 and
consequentially the complaint was liable to be quashed.
17.
The view of Jammu and Kashmir High Court in M/s. Harpreet
Hosiery Rehari8 is to the effect that under the law drawer has got 15 days
to make the payment from the receipt of notice of dishonour of the cheque.
It is only thereafter that an action under Section 138 of the NI Act can be
initiated against the defaulting party.
18.
It was after the above decisions of the various High Courts
that the decision of this Court in Narsingh Das Tapadia1 came. In Narsingh
Das Tapadia1, which was decided on 06.09.2000, the two-Judge Bench of
this Court noted the facts as follows:
...... that the respondent borrowed a sum of Rs.2,30,000
from the appellant and issued a post-dated cheque in his
favour. When the cheque was presented for demand on
3-10-1994, the same was dishonoured by the bank on 6-10-
1994 due to “insufficient funds”. The appellant demanded the
accused to repay the amount vide his telegrams sent on
7-10-1994 and 17-10-1994. A notice was also issued to the
respondent on 19-10-1994 demanding to repay the amount.
Despite receipt of the notice on 26-10-1994 the respondent
neither paid the amount nor gave any reply. To prove his
case, the appellant-complainant examined three witnesses
and proved documents, Exhibits P-1 to P-6. In his statement
under Section 313 CrPC the respondent denied the
allegations but refused to lead any defence evidence. On
analysis of the evidence and after hearing the counsel for
the parties, the trial court concluded as under:
“The complainant established that the accused
borrowed Rs.2,30,000 from him and the accused
issued Ext. P-3, cheque and the cheque was returned
due to insufficiency of funds and the accused did not
repay the amount in spite of receipt of notice from the
complainant and hence the accused is liable for
punishment under Section 138 of the NI Act.”
As noticed earlier, the appeal filed by the respondent was
dismissed on 19-4-1997. The High Court found that as the
notice intimating the dishonourment of cheque was served
upon the accused on 26-10-1994, the appellant-complainant
could not file the complaint unless the expiry of 15 days’
period. It was found on facts that the complaint filed on 8-11-
1994 was returned after finding some defect in it. However,
when refiled, the Court took the cognizance on 17-11-1994.
The High Court held that the original complaint having been
filed on 8-11-1994 was premature and liable to be
dismissed.
19.
This Court in Narsingh Das Tapadia1 considered the
provisions contained in clause (c) of the proviso to Section 138 and
Section 142 of the NI Act and also considered the expression “taking
cognizance of an offence” and held that mere presentation of the complaint
on 08.11.1994 when it was returned to the complainant on the ground
that the verification was not signed by the counsel, could not be termed to
be an action of the Magistrate taking cognizance within the meaning of
Section 142 of the NI Act. The two-Judge Bench did not approve the view
of the High Court and held that the High Court erroneously held the
complaint as premature. Consequently, the judgment of the High Court
was set aside and the conviction of the respondent under Section 138 of
the NI Act was upheld.
20.
After the decision of this Court in Narsingh Das Tapadia1, the
Karnataka High Court in Arun Hegde9 did not accept the contention of the
accused that the complaint filed under Section 138 on 15th day of service of
notice of demand was premature and as such not maintainable. Relying
upon Narsingh Das Tapadia1, the single Judge of the Karnataka High
Court in Arun Hegde9 held that if the complaint was found to be premature,
it can await maturity or be returned to the complainant for filing later and its
mere presentation at an earlier date need not necessarily render the
complaint liable to be dismissed or confer any right upon the accused to
absolve himself from the criminal liability for the offence committed.
9
Arun Hegde and Anr. v. M.J. Shetty; [ILR 2001 Kar. 3295]
21.
In Hem Lata Gupta10, the Allahabad High Court while dealing
with the complaint filed before expiry of 15 days, after relying upon the
decision of this Court in Narsingh Das Tapadia1 held that the bar of expiry
of 15 days from the date of service of notice is for taking cognizance and
not for filing complaint.
22.
In Mahendra Agarwal11, the Rajasthan High Court adopted the
reasoning that was made by this Court in Narsingh Das Tapadia1 and held
that mere presentation of the complaint in the court cannot be held to
mean, that its cognizance had been taken by the Magistrate.
If the
complaint is found to be premature, it can await maturity or be returned to
the complainant for filing later and its mere presentation at an earlier date
need not necessarily render the complaint liable to be dismissed or confer
any right upon the accused to absolve himself from the criminal liability for
the offence committed.
23.
In Bapulal B. Kacchi12, the Madhya Pradesh High Court
considered the matter against the order passed by the Sessions Judge
setting aside the order passed by the Chief Judicial Magistrate, Shajapur
whereby he refused to register the complaint under Section 138 of the NI
Act against the accused as it was found to be premature since 15 days
from the date of receipt of the notice by the accused had not elapsed. The
10
Smt. Hem Lata Gupta v. State of U.P. and Anr.; [2002 Cri. L.J. 1522]
Mahendra Agarwal v. Gopi Ram Mahajan; [RLW 2003 (1) Raj. 673]
12
Bapulal B. Kacchi v. Krupachand Jain; [2004 Cri. L.J. 1140]
Sessions Judge set aside the order of the Chief Judicial Magistrate dealing
with criminal revision filed by the accused. Madhya Pradesh High Court
followed the decision of this Court in Narsingh Das Tapadia1 and held that
the order of the Chief Judicial Magistrate in dismissing the complaint was
wrong and that order was rightly set aside by the revisional court.
24.
The Gauhati High Court in Yunus Khan13 relying upon
Narsingh Das Tapadia1 took the view that mere presentation of a complaint
in the Court of Judicial Magistrate does not mean that Magistrate has
taken cognizance of the same.
Though the complaint was filed under
Section 138 of the NI Act in the Court of Judicial Magistrate when only 13
days had elapsed from the date of receipt of the notice and the requisite
period of 15 days was not yet completed but when the Magistrate took
cognizance, 15 days had elapsed from the date of the receipt of the notice
and thus the complaint already stood validly instituted and the prosecution
launched against the accused on the basis of such a complaint could not
be held bad in law.
25.
A single Judge of Delhi High Court in Zenith Fashion Makers14
was concerned with the case arising from the following facts:
The complaint under Section 138 of Negotiable Instrument
Act was filed by the respondent for dishonour of two
cheques No. 615385 dated 20.7.2003 of Rs. 8,00,000/- and
13
14
Yunus Khan v. Mazhar Khan; [2004 (1) GLT 652]
Zenith Fashion Makers (P) Ltd. v. Ultimate Fashion Makers Ltd. and Anr.; [121 (2005) DLT 297]
No.615387 dated 20.9.2003 of Rs.3,00,000/-. Both the
cheques were dishonoured on account of insufficiency of
funds. The return memo of the bank is dated 20.9.2003. The
legal notice under Section 138 of Negotiable Instruments Act
was issued on 15.10.2003 through Regd. Post as well as
through speed post. The postal acknowledgment card shows
service on 18.10.2003. The complainant pleaded that the
notices were duly received but no payment in respect of the
dishonoured cheques was made within 15 days of the notice
as was required by the law as well as by the notice. The
complaint is presented on 31.10.2003. The Magistrate took
cognizance on 31.10.2003 itself and directed issue of
process on the same day. What is contended in this petition
under Section 482 Cr.P.C. is that the notice of demand being
of 15.10.2003, dispatched on 17.10.2003 and received on
18.10.2003, the complaint was filed within 15 days after
service of notice and hence was pre-mature as the cause of
action could accrue only after 15 days of the notice, i.e., on
3.11.2003.
Despite the fact that the complaint was presented before the expiry of 15
days of service of notice and the Magistrate took cognizance also before
the expiry of 15 days, the High Court strangely held that a premature
complaint under Section 138 of the NI Act cannot be quashed on the
ground of pre-maturity since there was no plea on the side of the accused
that he would have paid the cheque amount had the complainant given it
the required time. The Delhi High Court while doing so relied upon the
decision of this Court in Narsingh Das Tapadia1 and also invoked the
maxim ‘Actus curiae neminem gravabit’, an act of the Court shall prejudice
no man.
26.
The Allahabad High Court in Ganga Ram Singh15 took the
view that if the complaint was filed under Section 138 of the NI Act before
expiry of 15 days of statutory notice, the concerned court should have
waited and allowed the complainant to establish its case or cognizance
should have been taken after the expiry of the stipulated period instead of
dismissing the complaint outright as premature.
27.
A single Judge of the Madras High Court, following Narsingh
Das Tapadia1 held that though the complaint was preferred three days
short of the time to be availed by the accused to settle the dues but since
the Magistrate had taken cognizance of the complaint presented by the
complainant after the 15 days time granted under the statutory notice to
settle the amount due to complainant, the complaint cannot be quashed on
the ground that it was filed prematurely.
28.
In S. Janak Singh16, the Jammu and Kashmir High Court took
the view with regard to presentation of complaint before the accrual of
cause of action that though the complaint under Section 138 of the NI Act
having been filed before the accrual of cause of action, the same could not
be legally entertained by the trial court.
Relying upon Narsingh Das
Tapadia1, it was held that if the complaint was found to be premature, it
can await maturity or be returned to the complainant for filing later and its
15
16
Ganga Ram Singh v. State of U.P. and Ors.; [2005 Cri. L.J. 3681]
S. Janak Singh v. Pritpal Singh; [2007 (2) JKJ 91]
mere presentation at an earlier date need not necessarily render the
complaint liable to be dismissed or confer any right upon accused to
absolve himself from the criminal liability for the offence committed. The
view of the single Judge of the Jammu and Kashmir High Court is founded
on the decision of this Court in Narsingh Das Tapadia1.
29.
For about 7 years since the decision was given by this Court
in Narsingh Das Tapadia1, the various High Courts, as indicated above,
continued to take the view that presentation of a complaint under Section
138 of the NI Act before the accrual of the cause of action does not render
it not maintainable if cognizance had been taken by the Magistrate after
expiry of 15 days of the period of notice. In such matters, no illegality or
impropriety found to have been committed by the Magistrate in taking
cognizance upon such complaint. This legal position, however, was not
accepted by a two-Judge Bench decision of this Court in Sarav Investment
& Financial Consultancy2. Dealing with the provision under Section 138 of
the NI Act, this Court held that Section 138 contained a penal provision; it
was a special statute. Having regard to the purport of the said provision as
also in view of the fact that it provides for a severe penalty, the provision
warrant a strict construction. This Court emphasized that clause (c) of the
proviso to Section 138 provides that the holder of the cheque must be
given an opportunity to pay the amount within 15 days of the receipt of the
notice.
Complaint, thus, can be filed for commission of an offence by
drawee of the cheque only 15 days after service of the notice. In Sarav
Investment & Financial Consultancy2, this Court, thus, held that service of
notice in terms of Section 138 proviso (b) of the NI Act was a part of cause
of action for lodging the complaint and communication to the accused
about the fact of dishonouring of the cheques and calling upon him to pay
the amount within 15 days was imperative in character. It is true that in
Sarav Investment & Financial Consultancy 2, there is no reference of the
decision of this Court in Narsingh Das Tapadia1.
30.
Sarav Investment & Financial Consultancy2 led to the view
being taken by the High Courts that a complaint under Section 138 of the
NI Act filed before expiry of 15 days of service of notice was premature
and such complaint could not be treated as complaint in the eye of law and
criminal proceedings initiated are liable to be quashed. This is seen from
the view of the Calcutta High Court in Sandip Guha17 and the judgment of
the Himachal Pradesh High Court in Rattan Chand18.
31.
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 fulfillment of
17
18
Sandip Guha v. Saktipada Ghosh and Anr.; [2008 (3) CHN 214]
Rattan Chand v. Kanwar Ram Kripal and Anr.; [2010 Cri. L.J. 706]
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 the three
eventualities mentioned in clauses (a), (b) and (c) of the proviso are
satisfied. Mere issuance of a cheque and dishonour thereof would not
constitute an offence by itself under Section 138.
32.
Section 138 of the NI Act has been analysed by this Court in
Kusum Ingots & Alloys Ltd. 19 wherein this Court said that the following
ingredients are required to be satisfied for making out a case under
Section 138 of the NI Act:
(i) a person must have drawn a cheque on an account
maintained by him in a bank for payment of a certain amount
of money to another person from out of that account for the
discharge of any debt or other liability;
(ii) that 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;
(iii) that cheque is returned by the bank unpaid, either
because the amount of money standing to the credit of the
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 the bank;
(iv) the payee or the holder in due course of the cheque
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 15 days of the receipt of information by him
from the bank regarding the return of the cheque as unpaid;
19
M/s. Kusum Ingots & Alloys Ltd. v. M/s. Pennar Peterson Securities Ltd. and ors. etc. etc.; [AIR 2000
SC 954 : (2000) 2 SCC 745]
(v) the drawer of such cheque fails to make payment of the
said amount of money to the payee or the holder in due
course of the cheque within 15 days of the receipt of the said
notice.
33. We are in agreement with the above analysis.
34. In K.R. Indira20, a two-Judge Bench of this Court observed that
the offence under Section 138 of the NI Act could be completed if all the
above components are satisfied.
35.
Insofar as the present reference is concerned, the debate
broadly centers around clause (c) of the proviso to Section 138 of the NI
Act. The requirement of clause (c) of the proviso is that the drawer of the
cheque must have failed to make the payment of the cheque amount to the
payee within 15 days of the receipt of the notice. Clause (c) of the proviso
offers a total period of 15 days to the drawer from the date of receipt of the
notice to make payment of the cheque amount on its dishonour.
36.
Can an offence under Section 138 of the NI Act be said to
have been committed when the period provided in clause (c) of the proviso
has not expired? Section 2(d) of the Code defines ‘complaint’. According
to this definition, complaint means any allegation made orally or in writing
to a Magistrate with a view to taking his action against a person who has
committed an offence. Commission of an offence is a sine qua non for
filing a complaint and for taking cognizance of such offence.
20
A bare
K.R. Indira v. Dr. G. Adinarayana; [AIR 2003 SC 4789 : (2003) 8 SCC 300)]
reading of the provision contained in clause (c) of the proviso makes it
clear that no complaint can be filed for an offence under Section 138 of the
NI Act unless the period of 15 days has elapsed. Any complaint before the
expiry of 15 days from the date on which the notice has been served on
the drawer/accused is no complaint at all in the eye of law. It is not the
question of prematurity of the complaint where it is filed before expiry of
15 days from the date on which notice has been served on him, it is no
complaint at all under law. As a matter of fact, Section 142 of the NI Act,
inter alia, creates a legal bar on the Court from taking cognizance of an
offence under Section 138 except upon a written complaint. Since a
complaint filed under Section 138 of the NI Act before the expiry of 15 days
from the date on which the notice has been served on the drawer/accused
is no complaint in the eye of law, obviously, no cognizance of an offence
can be taken on the basis of such complaint. Merely because at the time
of taking cognizance by the Court, the period of 15 days has expired from
the date on which notice has been served on the drawer/accused, the
Court is not clothed with the jurisdiction to take cognizance of an offence
under Section 138 on a complaint filed before the expiry of 15 days from
the date of receipt of notice by the drawer of the cheque.
37.
A complaint filed before expiry of 15 days from the date on
which notice has been served on drawer/accused cannot be said to
disclose the cause of action in terms of clause (c) of the proviso to Section
2
Page 22
138 and upon such complaint which does not disclose the cause of action
the Court is not competent to take cognizance.
A conjoint reading of
Section 138, which defines as to when and under what circumstances an
offence can be said to have been committed, with Section 142(b) of the NI
Act, that reiterates the position of the point of time when the cause of
action has arisen, leaves no manner of doubt that no offence can be said
to have been committed unless and until the period of 15 days, as
prescribed under clause (c) of the proviso to Section 138, has, in fact,
elapsed. Therefore, a Court 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.19 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.
38.
We, therefore, do not approve the view taken by this Court in
Narsingh Das Tapadia1 and so also the judgments of various High Courts
following Narsingh Das Tapadia1 that if the complaint under Section 138 is
2
Page 23
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 drawer/accused has expired, such complaint was legally maintainable
and, hence, the same is overruled.
39.
Rather, the view taken by this Court in Sarav Investment &
Financial Consultancy2 wherein this Court held that service of notice in
terms of Section 138 proviso (b) of the NI Act was a part of the cause of
action for lodging the complaint and communication to the accused about
the fact of dishonouring of the cheque and calling upon to pay the amount
within 15 days was imperative in character, commends itself to us. As
noticed by us earlier, no complaint can be maintained against the drawer
of the cheque before the expiry of 15 days from the date of receipt of
notice because the drawer/accused cannot be said to have committed any
offence until then. We approve the decision of this Court in Sarav
Investment & Financial Consultancy2 and also the judgments of the High
Courts which have taken the view following this judgment that the
complaint under Section 138 of the NI Act filed before the expiry of 15 days
of service of notice could not be treated as a complaint in the eye of law
and criminal proceedings initiated on such complaint are liable to be
quashed.
40. Our answer to question (i) is, therefore, in the negative.
41. The other question is that if the answer to question (i) is in the
negative, can the complainant be permitted to present the complaint again
notwithstanding the fact that the period of one month stipulated under
Section 142(b) for the filing of such a complaint has expired.
42.
Section 142 of the NI Act prescribes the mode and so also the
time within which a complaint for an offence under Section 138 of the NI
Act can be filed. A complaint made under Section 138 by the payee or the
holder in due course of the cheque has to be in writing and needs to be
made within one month from the date on which the cause of action has
arisen under clause (c) of the proviso to Section 138. The period of one
month under Section 142(b) begins from the date on which the cause of
action has arisen under clause (c) of the proviso to Section 138. However,
if the complainant satisfies the Court that he had sufficient cause for not
making a complaint within the prescribed period of one month, a complaint
may be taken by the Court after the prescribed period. Now, since our
answer to question (i) is in the negative, we observe that the payee or the
holder in due course of the cheque may file a fresh complaint within one
month from the date of decision in the criminal case and, in that event,
delay in filing the complaint will be treated as having been condoned under
the proviso to clause (b) of Section 142 of the NI Act. This direction shall
be deemed to be applicable to all such pending cases where the complaint
does not proceed further in view of our answer to question (i). As we have
already held that a complaint filed before the expiry of 15 days from the
date of receipt of notice issued under clause (c) of the proviso to Section
138 is not maintainable, the complainant cannot be permitted to present
the very same complaint at any later stage. His remedy is only to file a
fresh complaint; and if the same could not be filed within the time
prescribed under Section 142(b), his recourse is to seek the benefit of the
proviso, satisfying the Court of sufficient cause. Question (ii) is answered
accordingly.
43.
Criminal appeals may now be listed for consideration by the
regular Bench.
.................................CJI.
(R.M. Lodha)
...................................J.
(Kurian Joseph)
...................................J.
(Rohinton Fali Nariman)
New Delhi,
September 19, 2014.
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