Thursday 3 September 2020

Whether the cause of action for the dishonour of cheque is defeated if accused makes part payment of cheque amount?

Regarding part payment he has relied upon a decision of the Bombay High Court in the case of Vishnu Bhat Vs/. Narayan R. Bandekar and Others, reported in MANU/MH/0936/2007 : 2008 (2) ICC 494 wherein the Single Bench of the Bombay High Court held that once the cheque is dishonoured, the offence is committed and any payment subsequent thereto will not absolve the accused of liability of criminal offence.

21. Regarding point No. 1: this Court is of the considered view that simply because Rs. 1 lakh was received by the complainant after issuance of statutory notice is enough to deviate from the cause of action. The decision of Kerala High Court as passed in Shiju K. (Supra) can have only persuasive value as it is a decision of the other High Courts. This Court is not unmindful of the other decisions on this point as reported in MANU/SC/8178/2006 : 2006 Cri LJ 3276 (Madras)(Synergy Credit Corporation Ltd. Vs. Midland Industries Ltd.) and 1999 (3) Crimes 504 (Andhra Engineering Corpn. Vs. TCI Finance Ltd.) that merely because the accused has paid some amount of the cheque but that will not absolve him from the legal enforceable liability. This Court has also relied upon the decision of the Bombay High as cited by the opposite party as passed in Vishnu Bhat (Supra). Thus this Court is satisfied that simply because of Rs. 1 lakh was paid by the accused/revisionist after issuance of the statutory notice that is not enough to take away the right of the holder of the cheque to enforce the cause of action regarding non-payment of the residue amount.

IN THE HIGH COURT OF CALCUTTA

C.R.R. 856 of 2013 and C.R.A.N. 1728 of 2016

Decided On: 06.12.2016

Jahangir Molla  Vs.  Md. Alim Mallick and Ors.

Hon'ble Judges/Coram:
Indrajit Chatterjee, J.

Citation: MANU/WB/1132/2016

1. This is an application under Section 401 read with Section 482 of the Code of Criminal Procedure in which this present petitioner who was accused in Complaint Case No. 316 of 2000 under Section 138 of the N.I. Act has assailed the judgment and order dated 4th March, 2013 passed by the learned Additional Sessions Judge, 2nd Court at Howrah in Criminal Appeal No. 2 of 2009 by which the said learned Judge was pleased to affirm the judgment and order of conviction passed by the learned Additional Chief Judicial Magistrate, Howrah on 18/12/2008. The case relevant for the purpose of adjudication of this revisional application can be stated in brief thus:-

That one complaint was filed under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881 (hereinafter called as the said Act) wherein the complainant, now the opposite party before this court averred that on 30/12/1999, an advance of Rs. 2,85,000/- was given to the accused by cash and the accused promised to repay the same within ten days and on the very same day, the accused issued a cheque being No. 23912 in respect of his Account No. 3361 drawn on Allahabad Bank, Dakshin Jhapordah Branch, P.S. Domjur, District-Howrah covering an amount of Rs. 2,85,000/-.
2. The present petitioner before this court-the accused convict while issuing cheque on 30/12/1999 requested the opposite party/complainant not to present the cheque for encashment at leased for ten days from the date of issue of the cheque. The complainant waited for twelve days and then deposited the cheque on 13/01/2000 in his account being S.B. A/c No. 17421 in the United Bank of India, Domjur Branch but the cheque was dishonoured on 17/01/2004 as per the bank memo for 'insufficiency of fund' and the complainant received the returned memo from his banker on 20/01/2000. Thereafter, the complainant issued the notice as contemplated under the said Act but even though the notice was received, it was not replied. In paragraph 6 of the complaint, it was further averred that the accused paid Rs. 1,00,000/- in the meantime and such payment was admitted by the present revisionist before the learned trial court. Such payment is not in dispute.

3. The matter was decided by the learned trial court and the learned trial court was pleased to convict the present revisionist and directed him to suffer simple imprisonment for four months and further directed to pay fine of Rs. 2,85,000/- and in default to suffer imprisonment for one month and further directed on realisation of fine amount, the same will go to the complainant.

4. The judgment was assailed before the Sessions Court and it was decided by the learned 2nd Additional Sessions Judge, Howrah in Criminal Appeal No. 2 of 2009 wherein the learned appellate court was pleased to affirm the said judgment and directed the present appellant to appear before the learned Chief Judicial Magistrate, Howrah within fifteen days from the date of judgment (04/03/2013). In this revisional application this judgment of the appellate court is being assailed.

5. It has been argued by Mr. Dutta Gupta, the learned advocate for the requisitionist by taking me to the list of dates which has been taken on record that the cause of action came down to Rs. 1,85,000/- as after receipt of the notice accused/convict paid Rs. 1 lakh and that was duly accepted by the complainant before filing of the complaint on March 14, 2000 and as such demand notice is defective and a separate demand notice ought to have been issued.

6. He further submitted that the cause of action arose from the date of receipt of notice which was received on February 02, 2000 and the said Act vide Sections 138 and 142 has fixed after the expiry of the period of limitation. He doubted the source of the complainant to pay such huge amount.

7. He further submitted that the complainant received the return memo from the banker on January 20, 2000 vide Ext. 8 and the complaint was filed on March 14, 2000 the period of limitation as prescribed was already over.

8. He further contended by taking me to the complaint that no prayer was made in the complaint for realisation of the money. He referred the decision of the Apex Court as delivered in Tameeshwar Vaishnav Vs. Ramvishal Gupta, reported in MANU/SC/0020/2010 : (2010) 1 C Cr LR (SC) 671 wherein the Apex Court in paragraph 15 observed as such:

"15. The provisions of Section 138 and Clauses (a), (b) and (c) to the proviso thereof indicate that a cheque has to be presented to the bank within a period of six months from the date on which it was drawn or within the period of its validity, whichever is earlier. Clause (b) indicates that the payee or the holder in; due course of the cheque, has to make demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid and Clause (c) provides that if the drawer of the cheque fails to make the payment of the said amount of money to the payee or to the holder in due course of the cheque within 15 days of receipt of the said notice, the payee or the holder of the cheque may file a complaint under Section 142 of the Act in the manner prescribed."
9. He also cited a decision of this Hon'ble Court in the case of Annapurna Cast Limited Vs. Akshaya Technologies Pvt. Ltd. & Ors., reported in MANU/WB/0141/2016 : (2016) 4 CAL LT 428 (HC) to convince this Court regarding the period of limitation.

10. Regarding the part payment, Mr. Dutta Gupta has cited a Single Bench decision of the Kerala High Court in the case of Shiju K. Vs. Nalini and Anr., reported in MANU/KE/2737/2015 : 2016 (3) AICLR 214 (Ker.).

11. He also submitted by taking me to Section 8 and Section 13 of the West Bengal Moneylenders Act, 1940 that except a licensed moneylender none can advance any loan, even any accommodation loan.

12. Regarding imposition of fine, Mr. Datta Gupta submitted that Rs. 1,85,000/- was imposed by the learned Trial Court that it was beyond the power of the Judicial Magistrate, First Class as prescribed under Section 29 of the Criminal Procedure Code, 1973.

13. It is submitted by Mr. Madan Mohan Roy, learned Advocate appearing on behalf of the opposite party/complainant by taking me to the judgment as passed by the learned Trial Court as well as the judgment of the 1st Appellate Court which has confirmed the judgment of the Trial Court to convince this Court that two Lower Courts have concurred on the factual aspects of this case and both the judgments are reasoned and there is nothing wrong in these two judgments to be interfered with.

14. He further submitted that actually the cause of action arose from the date of acceptance of Rs. 1 lakh and non-payment of the remaining amount even though the statutory notice was served. He reiterated that Rs. 1 lakh was paid and accepted on March 11, 2000 and the complaint was filed on March 14, 2000. He further submitted that part payment cannot change the cause of action which is a bundle of facts.

15. Regarding the point of period of limitation, he has submitted relying on the decision of the Apex Court in the case of Tameeshwar Vaishnav (Supra) and by taking me to Section 138 and Section 142 of the Said Act to say that actually the period of limitation is not 45 days but it is 75 days, the breakup being 30 days + 15 days + 30 days = 75 days. He took me to Section 142(B) of the said Act the relevant portion runs thus: "such complaint is made within one month on which the cause of action arises under Clause C of the proviso to Section 138...."

16. Regarding the question of part payment he has submitted that when Rs. 1 lakh was paid it can be presumed that there was existing liability for which the petitioner convict paid that Rs. 1 lakh in discharge of that liability and stretching analogy he has submitted that cheque was issued in discharge of existing liability.

17. Regarding source of money of the complainant Mr. Roy submitted that it is not to be looked into by the Court as it was the positive case of the defence before the trial court the no such payment was made to this complainant and now he cannot take up a new story that the complainant had no capacity to pay.

18. He also took me to the judgment of the learned Trial Court to say that both DW-1 and DW-2 before the learned Trial Court admitted regarding the issuance of cheque even though in the Section 313 Criminal Procedure Code statement the accused made up a case that no such cheque was issued at all. He further submitted by taking me to the internal page 3 of the judgment that the relationship between the parties is that of a lawyer and client and that such loan was advanced by the complainant client just as accommodation loan for which no licence is required. Regarding part payment he has relied upon a decision of the Bombay High Court in the case of Vishnu Bhat Vs/. Narayan R. Bandekar and Others, reported in MANU/MH/0936/2007 : 2008 (2) ICC 494 wherein the Single Bench of the Bombay High Court held that once the cheque is dishonoured, the offence is committed and any payment subsequent thereto will not absolve the accused of liability of criminal offence.

19. He further submitted that answers given by the accused in examination 313 of the Criminal Procedure Code is not per se evidence as the prosecution has no right to cross-examine the accused. On this point he relied on the decision in the case of Sidhartha Vashisht @ Manu Sharma Vs. State (NCT of Delhi), reported in MANU/SC/0268/2010 : (2010) 6 SCC 100.

20. In reply nothing has been ventilated on behalf of the revisionist. Considering the argument put forward by the learned Advocates appearing on behalf of the parties and taking into consideration the factual aspects of this case this revisional application is to be decided on the following points.

(1) Whether the demand notice was defective as because a part payment to the tune of Rs. 1,00,000/- was accepted and that is the departure from the cause of action itself?

(2) Whether the complaint is barred by limitation?

(3) Whether the cheque was issued in discharge of existing liability?

(4) Whether the part payment of cheque is enough to defeat the entire cause of action?

(5) Whether the learned Trial Court had authority to impose the fine amount to the tune of Rs. 2,85,000/- in view of the bar under Section 29 of the Criminal Procedure Code?

21. Regarding point No. 1: this Court is of the considered view that simply because Rs. 1 lakh was received by the complainant after issuance of statutory notice is enough to deviate from the cause of action. The decision of Kerala High Court as passed in Shiju K. (Supra) can have only persuasive value as it is a decision of the other High Courts. This Court is not unmindful of the other decisions on this point as reported in MANU/SC/8178/2006 : 2006 Cri LJ 3276 (Madras)(Synergy Credit Corporation Ltd. Vs. Midland Industries Ltd.) and 1999 (3) Crimes 504 (Andhra Engineering Corpn. Vs. TCI Finance Ltd.) that merely because the accused has paid some amount of the cheque but that will not absolve him from the legal enforceable liability. This Court has also relied upon the decision of the Bombay High as cited by the opposite party as passed in Vishnu Bhat (Supra). Thus this Court is satisfied that simply because of Rs. 1 lakh was paid by the accused/revisionist after issuance of the statutory notice that is not enough to take away the right of the holder of the cheque to enforce the cause of action regarding non-payment of the residue amount.

22. Regarding Point No. 2: On the point of limitation, this Court likes to rely upon the decision of the Apex Court as passed in Tameeshwar Vaishnav (Supra) and I have quoted paragraph No. 15 of the said judgment in page No. 4 of this judgment and I do not like to reproduce the same again.

23. Let us now turn to Section 142 of the said Act and as per Clause (b) of that section such complaint may be filed within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138 of the said Act. Thus, the calculation will be that the holder of a cheque will get 30 days' time as per Clause (b) of section 138 on receipt of the information by him form the bank regarding the return of the cheque as unpaid. Thereafter the holder of the cheque will get at least 15 days more time as per Clause (c) of Section 138 of the said Act if the said amount still remained unpaid and as per Section 142(b) of the Act such complaint is to be filed within one month from that 15 days as mentioned in Clause (c) of Section 138. Here in the instant case before this Court the payment of Rs. 1 lakh was made on 11.03.2000 and according to this court it is the starting time of the period of limitation. The complaint was filed within three days of that that is on 14.03.2000 and as such the complaint was filed perfectly within time. This court reiterates that the complaint is not hit by the period of limitation as prescribed under Sections 138 and 142 of the Act of 1881.

24. The decision of this Court as passed in Annapurna Cast Ltd. (supra) cannot apply on factual matrix of this case as the complaint in that case was filed on 29.06.2000 whereas the demand notice was received by the respondent/company on 24.04.2000, such time gap is not here in the present case before the floor of this court.

25. It may not be out of place to mention that it is the admitted position that the relationship between the parties was that of client and advocate and naturally such relationship was fiduciary one and there was nothing wrong on the part of the complainant when he advanced Rs. 2,85,000/-.

26. Regarding point No. 3: Now the question is whether the cheque was issued in discharge of existing liability. Holder of a cheque stands in a better footing under the said Act as he carries with him the presumption of Section 139 of the said Act. it is true that the said presumption is rebuttable one. The burden to disprove that the cheque was not issued in discharge of existing liabilities squarely lies upon the drawer of such cheque here the opposite party advocate. The role of such drawer on receipt of such notice as contemplated under Section 138 of the Said Act before the floor of the trial court that on receipt of such notice he paid Rs. 1 lakh as part payment.

27. Thus, this opposite party accused cannot now say without any convincing evidence that the said cheque was not issued in discharge of existing liability. There is no reason to disbelieve the claim of the complainant appellant that the said cheque was issued in discharge of existing liability.

28. Regarding the applicability of Section 8 and Section 13 of the West Bengal Moneylenders Act, this Court is of the view that the said act has not barred money lending but it has only regulated the money lending. Thus, even if one person who has no money lending licence cannot be debarred from granting any accommodation loan to his friend or other person on him he has confidence. The opposite party took the accommodation loan and he now cannot take the shelter of the West Bengal money lenders' act to defraud the person who accommodated him. Thus the argument on this point as advanced by Mr. Dutta Gupta is not convincing this court. The argument of Mr. Dutta Gupta that the appellant had no financial capacity to advance in cash Rs. 2,85,000/- cannot be considered as his client cannot question the capacity of the appellant to advance such amount particularly when after receipt of legal notice the opposite party paid Rs. 1 lakh to the appellant. Thus, this issue is answered in favour of the appellant. The decision of Kerala High Court as passed in Shiju K. (supra) as cited by the opposite party is not accepted by this court.

29. Regarding point No. 4: As regards part payment this court has already answered that the decision of Shiju K. (supra) is not convincing to this court and while answering point No. 1 this court has already answered the issue that part payment cannot defeat the entire cause of action. Thus, this point is answered in favour of the appellant.

30. Regarding point No. 5: It is true that as per Section 29 of the Code of Criminal Procedure, 1993 no Judicial Magistrate of the first class can impose any fine exceeding Rs. 10,000/- but in the instant case before this court the learned Judicial Magistrate imposed fine amount to the tune of Rs. 2,85,000/- and according to this court the learned trial court exceeded its jurisdiction to that extent. The question now is whether the entire finding of the trial court is to be set aside for such careless approach. This superior court has inherent power under Section 482 of the Act of 1973 to cure any irregularity to prevent abuse of process of any court or to secure the ends of justice.

31. This opposite party/accused is said to be more than 70 years. As per Section 138 of the Said Act the legislature has prescribed substantive sentence and here the learned trial court imposed the substantive sentence to suffer simple imprisonment for 4 months. It is true that as an advocate who has great esteem in the society that the said accused/opposite party would not have troubled his client who accommodated him during his hard days for as many as 17 long years (from 30.12.1999 till this date) and this court prefers to reduce the substantive sentence to make it simple imprisonment for ten days but at the same time the fine amount is being converted to compensation under Section 357 (3) of the Code of 1973 and the amount is enhanced from Rs. 2,85,000/- to 3,70,000/- in default of such payment the accused/opposite party will suffer simple imprisonment for further one year.

32. Thus, this issue is answered accordingly in part in favour of the appellant.

33. Thus, this criminal revisional application succeeds in part. The finding of guilt as assessed by the learned trial court and affirmed by the first appellate court is hereby reaffirmed.

34. The substantive sentence is reduced from 4 months Simple Imprisonment to 10 days. The fine is converted as compensation but the amount is increased to Rs. 3,70,000/- being double of the amount of Rs. 1,85,000/-. If this amount is not paid then this opposite party accused will have to suffer further Simple Imprisonment for one year more.

35. Such payment of Rs. 3,70,000/- (three lakhs seventy thousand) is to be deposited by the opposite party before the learned trial court by way of demand draft in the name of the complainant appellant within one month from this day. The opposite party/accused must surrender before the learned trial court to serve out the sentence within one month from this day. Failure to comply with this order will entitle the learned trial court to issue warrant of arrest against this accused/opposite party.

36. The order is pronounced in open court in presence of the leaned advocates of the parties.

37. The CRR 856 of 2013 being disposed of the CRAN No. 1728 of 2016 has become infructuous.

38. The department is directed to transmit the lower court records to the respective courts along with copies of this judgment for necessary action as contemplated, by special messengers and such cost is to be deposited by the appellant forthwith.

39. The department to comply this order positively within ten days from this day.

40. Urgent certified copy, if applied for, given to the parties as per Rules.


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