TaxTMI 
TaxTMI 
2014 (9) TMI 1129
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....plaint 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 v. Goverdhan Das Partani and Anr.; [(2000) 7 SCC 183] and (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]. 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 Tapadia and Sarav Investment & Financial Consultancy. 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, accordin....
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....es/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 ....
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.... 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 Rakes....
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....heque 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 t....
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....d 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 com....
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.... 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 o....
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....ed 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 v. Gopi Ram Mahajan; [RLW 2003 (1) Raj. 673], 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 v. Krupachand Jain; [2004 Cri. L.J. 1140], 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 agai....
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....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 v. State of U.P. and Ors.; [2005 Cri. L.J. 3681] 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 an....
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....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 co....
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....ank 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 v. Dr. G. Adinarayana; [AIR 2003 SC 4789 : (2003) 8 SCC 300)], 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 C....
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....ays, 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 prem....