Sec.138 & 142 of N.I.Act – complaint filed with in 15 days from the date of service of statutory notice – whether premature even though cognizance was taken in later days as held in Narsingh Das Tapadia1 or whether the complain is liable to be rejected/dismissed as held in Sarav Investment & Financial Consultancy2 – Apex court held that 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 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 and further held that We approve the decision of this Court in Sarav Investment &Financial Consultancy2 and also the judgments of the High Courts which havetaken 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. and further held that 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. 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. =
(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 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?=
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 23rd 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 14th 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. =
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. =
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 Consultancy2,
there is no reference of the decision of this Court in Narsingh Das
Tapadia1.
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.=
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
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. =
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.=
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.
2014 – Sept. Month – http://judis.nic.in/supremecourt/filename=41940
CHIEF JUSTICE, KURIAN JOSEPH, ROHINTON FALI NARIMAN
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.605 OF 2012
Yogendra Pratap Singh … Appellant
Versus
Savitri Pandey & Anr. … Respondents
WITH
CRIMINAL APPEAL NO. 1924 OF 2014
CRIMINAL APPEAL NO. 1925 OF 2014
JUDGMENT
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 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?
2. 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
Tapadia[1] and (2) Sarav Investment & Financial Consultancy[2]. 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.
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 23rd 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 14th 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 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 Porwal[3]. 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 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:
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. The date of issuance of notice
cannot be taken into account…….. 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 Hegde[9] 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.
21. In Hem Lata Gupta[10], 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 Agarwal[11], 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. Kacchi[12], 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
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 Khan[13] 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 Makers[14]
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 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 Singh[15] 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 Singh[16], 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 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 Consultancy2,
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 Guha[17] and the judgment of
the Himachal Pradesh High Court in Rattan Chand[18].
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 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;
(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. Indira[20], 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. A bare 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 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
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.
———————–
[1] Narsingh Das Tapadia v. Goverdhan Das Partani and Anr.; [(2000) 7
SCC 183]
[2] 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] Rakesh Nemkumar Porwal v. Narayan Dhondu Joglekar and Anr.; [1993
Cri.L.J. 680]
[4] Ashok Verma v. Ritesh Agro Pvt. Ltd. and Anr.; [(1995) 1 Bank CLR
103]
[5] N. Venkata Sivaram Prasad v. M/s Rajeswari Constructions; [1996
Cri. L.J. 3409]
[6] Ashok Hegde v. Jathin v. Attawan; [1997 Cril. L.J. 3691]
[7] Sri Niranjan Sahoo v. M/s Utkal Sanitary, BBSR; [1998 (3) Crimes
188]
[8] M/s Harpreet Hosiery Rehari v. Nitu Mahajan; [2000 Cri.L.J. 3625]
[9] Arun Hegde and Anr. v. M.J. Shetty; [ILR 2001 Kar. 3295]
[10] Smt. Hem Lata Gupta v. State of U.P. and Anr.; [2002 Cri. L.J. 1522]
[11] Mahendra Agarwal v. Gopi Ram Mahajan; [RLW 2003 (1) Raj. 673]
[12] Bapulal B. Kacchi v. Krupachand Jain; [2004 Cri. L.J. 1140]
[13] Yunus Khan v. Mazhar Khan; [2004 (1) GLT 652]
[14] Zenith Fashion Makers (P) Ltd. v. Ultimate Fashion Makers Ltd. and
Anr.; [121 (2005) DLT 297]
[15] Ganga Ram Singh v. State of U.P. and Ors.; [2005 Cri. L.J. 3681]
[16] S. Janak Singh v. Pritpal Singh; [2007 (2) JKJ 91]
[17] Sandip Guha v. Saktipada Ghosh and Anr.; [2008 (3) CHN 214]
[18] Rattan Chand v. Kanwar Ram Kripal and Anr.; [2010 Cri. L.J. 706]
[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]
[20] K.R. Indira v. Dr. G. Adinarayana; [AIR 2003 SC 4789 : (2003) 8 SCC
300)]
———————–
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