TaxTMI 
TaxTMI 
2014 (9) TMI 1129
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....d 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 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 pronou....
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....mmitted 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 p....
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.... 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 ....
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....od 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....
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....viso (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 subseque....
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....ing 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 est....
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....accused to absolve himself from the criminal liability for the offence committed. 21. In Smt. Hem Lata Gupta v. State of U.P. and Anr.; [2002 Cri. L.J. 1522], 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 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 Cou....
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....d 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 Hi....
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....f 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.....
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....y 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 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....
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....hat 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 ....