2008 (8) TMI 795 - SC - Indian Laws

Appeal allowed: belated amendment to add Section 420 IPC invalid where delayed cheque presentation showed no established intention to cheat

SC allowed the appeal, holding the HC erred in permitting a belated amendment to add Section 420 IPC. Post-dated cheques issued in 1996 were presented in ... Jurisdiction of court to allow the amendment of the complaint petition at a later stage - Allegations of Cheating - application seeking to be amended for adding Section 420 of the Indian Penal Code - Dishonour of cheques - conditions precedent for taking cognizance of an offence u/s 138 - service of notice - effect of amendment of Clause (b) of Section 142 of the Act even if delay has been caused in filing the complaint, the Magistrate has power to condone the delay - Whether the proviso appended to Section 142 of the Negotiable Instruments Act, 1881 inserted by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002, is retrospective in operation? Held that:- The cheques were post dated ones. Admittedly they were issued in the year 1996. They were presented before the bank on a much later date. They were in fact presented only on 10.01.2001. When the cheques were issued, the accounts were operative. Even assuming that the account was closed subsequently the same would not mean that the appellant had an intention to cheat when the post dated cheques were issued. Even otherwise the allegations made in the complaint petition, even if given face value and taken to be correct in its entirety do not disclose commission of an offence under Section 420 of the Indian Penal Code. They do not satisfy the ingredients of the suit provision. It is, therefore, in the fact situation obtaining in the instant case, difficult to hold that the provisions of Section 420 of the Indian Penal Code were attracted. The court had no jurisdiction to allow the amendment of the complaint petition at a later stage. Therefore, the High court was not correct in taking the aforementioned view in the facts and circumstances of the present case. Appeal is allowed. Issues Involved:1. Retrospective operation of the proviso appended to Section 142 of the Negotiable Instruments Act, 1881.2. Barred by limitation of the complaint petition under Section 138 of the Negotiable Instruments Act.3. Jurisdiction of the court to take cognizance of the offence under Section 138 of the Act.4. Validity of the amendment to include Section 420 of the Indian Penal Code in the complaint petition.5. Allegations of cheating under Section 420 of the Indian Penal Code.Detailed Analysis:Retrospective Operation of the Proviso Appended to Section 142 of the Negotiable Instruments Act, 1881:The main question in this appeal was whether the proviso appended to Section 142 of the Negotiable Instruments Act, 1881, inserted by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002, is retrospective in operation. The court held that the proviso to Clause (b) of Section 142, which confers jurisdiction upon the court to condone the delay, is a substantive provision and not a procedural one. Therefore, it cannot be given a retrospective effect. The court emphasized that substantive laws, in the absence of an express provision, cannot be given retrospective effect or retroactive operation.Barred by Limitation of the Complaint Petition under Section 138 of the Negotiable Instruments Act:The complaint petition was filed on 20.04.2001, while the legal notice was issued on 17.01.2001. The court observed that if the presumption of service of notice within a reasonable time is raised, it should be deemed to have been served at best within thirty days from the date of issuance, i.e., by 16.02.2001. Therefore, the accused was required to make payment by 2.03.2001, and the complaint should have been filed by 2.04.2001. The court concluded that the complaint was ex facie barred by limitation, and no application for condonation of delay was filed, nor was it maintainable under the special provisions of the Act.Jurisdiction of the Court to Take Cognizance of the Offence under Section 138 of the Act:The court reiterated that unless the conditions precedent for taking cognizance of an offence under Section 138 of the Act are satisfied, the court has no jurisdiction to pass an order. The conditions include the issuance of a cheque, its presentation, dishonour, service of notice, and failure to make payment within fifteen days from the date of receipt of the notice. The court held that the complaint petition did not meet these conditions, and thus, the Magistrate had no jurisdiction to take cognizance under Section 138 of the Act.Validity of the Amendment to Include Section 420 of the Indian Penal Code in the Complaint Petition:The court held that the Magistrate could not have allowed the amendment of the complaint petition to include Section 420 of the Indian Penal Code. The court emphasized that the allegations made in the complaint petition, even if given face value and taken to be correct in their entirety, did not disclose the commission of an offence under Section 420 of the Indian Penal Code. Therefore, the application for amendment to insert Section 420 was not maintainable.Allegations of Cheating under Section 420 of the Indian Penal Code:The court analyzed the ingredients of cheating under Section 420 of the Indian Penal Code, which requires deception of any person, fraudulent or dishonest inducement to deliver property, or intentional inducement causing damage or harm. The court observed that the cheques were post-dated and issued in 1996, while they were presented before the bank only on 10.01.2001. The court concluded that even if the account was closed subsequently, it did not mean that the appellant had an intention to cheat when the post-dated cheques were issued. The allegations did not satisfy the ingredients of Section 420, and thus, no case for proceeding under Section 420 was made out.Conclusion:The Supreme Court set aside the impugned judgment, allowing the appeal. The court held that the complaint petition was barred by limitation, the Magistrate had no jurisdiction to take cognizance under Section 138 of the Act, and the amendment to include Section 420 of the Indian Penal Code was not maintainable. The allegations did not disclose the commission of an offence under Section 420 of the Indian Penal Code.