TaxTMI 
TaxTMI 
2022 (5) TMI 197
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....o. 39 of 2019 confirming the order dated 13.02.2019 passed below Exh. 17 in Criminal Case No. 1050 of 2018 by the learned 2nd Additional Civil Judge and JMFC, Jambusar, District Bharuch. 5. Brief facts leading to filing of this petition are that, the respondent No.2 herein had preferred Criminal Complaint No. 1050 of 2018 under the provisions of Section 138 of the Negotiable Instruments Act, against the present petitioners as well as respondent Nos. 3 and 4 herein inter alia alleging that a cheque bearing No. 000248 dated 01.08.2018 for an amount of Rs. 1,01,00,000/- had been given by the petitioners and upon complainant presenting the same came to be returned with an endorsement "funds insufficient". Corresponding to the time when the cheque had been dishonoured or thereabouts, the Parliament had enacted the Negotiable Instruments (Amendment) Act, 2018, whereby a new Section namely Section 143-A came to be incorporated in the Negotiable Instruments Act, 1881 (for short "NI Act") whereby a provision for payment of interim compensation was envisaged. 5.1. It appears that upon such provision being incorporated in the NI Act, the respondent No.2 - original complainant preferred ....
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....arly according to learned Advocate, the Hon'ble Apex Court having stated that only in cases where offences were committed after introduction of Section 143-A, the accused would be required to pay interim compensation. Para Nos. 22, 23 and 24 of the said decision being the relevant paragraphs are reproduced hereinbelow for benefit. "22. In our view, the applicability of Section 143A of the Act must, therefore, be held to be prospective in nature and confined to cases where offences were committed after the introduction of Section 143A, in order to force an accused to pay such interim compensation. 23. We must, however, advert to a decision of this Court in Surinder Singh Deswal and Ors. vs. Virender Gandhi, 2019 8 SCALE 445 where Section 148 of the Act which was also introduced by the same Amendment Act 20 of 2018 from 01.09.2018 was held by this Court to be retrospective in operation. As against Section 143A of the Act which applies at the trial stage that is even before the pronouncement of guilt or order of conviction, Section 148 of the Act applies at the appellate stage where the accused is already found guilty of the offence under Section 138 of the Act. It m....
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....have been directed by the learned Trial Court as well as the Revisional Court to pay interim compensation to the original complainant. In support of his submissions, learned Advocate Mr. Pandya has relied upon the decisions of the Hon'ble Apex Court in cases of (1) Dashrath Rupsing Rathod Vs. State of Maharashtra and another reported in (2014) 9 SCC 129, (2) Vinay Kumar Shailendra Vs. Delhi High Court Legal Services Committee and Anr., reported in (2014) 10 SCC 708, and (3) Sandeep Kumar Bafna Vs. State of Maharashtra and Another, reported in (2014) 16 SCC 623. 6.2 Learned Advocate Mr. Pandya relying upon the decision of the Hon'ble Apex Court in case of Dashrath Rupsing Rathod (supra) would submit that the Hon'ble Apex Court, has inter alia observed that Section 138 of the NI Act envisages that the offence is committed no sooner the drawee bank returns the cheque unpaid. Learned Advocate would submit in this regard that as noticed hereinabove, the drawee bank had returned the cheque unpaid on the ground of insufficient funds, more particularly on 13.08.2018 i.e. before the date of Amendment Act coming into force, and therefore the Amendment Act would not have been applicable in....
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....e demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within a period of 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid and the drawer of the cheque, upon receiving the notice, within a period of 15 days thereafter not making the payment to the payee or the holder in due course. Learned Advocate would submit that only upon the requirements mentioned in the provisos to Section 138 of the NI Act, being fulfilled, the offence said to have been taken place. According to the learned Advocate, the date of dishonour of the cheque would not be relevant date, rather the relevant date on which the offence is committed would be the day immediately after expiry of period of 15 days after the drawer of the cheque receives the notice by the payee or holder in due course about the cheque being dishonoured and asking him to make payment thereof and the drawer does not make the payment within the stipulated period. Learned Advocate in this regard would further submit that while the decision of the Hon'ble Apex Court in case of Dashrath Rupsing Rathod (supra), was on the issue of t....
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....Mr. Majmudar appear to be sound. Learned APP would submit that since the decision of the Hon'ble Apex Court in case of Dashrath Rupsing Rathod (supra) being a decision on the aspect of territorial jurisdiction i.e. with regard to competent court where a complaint under Section 138 of the NI Act could be filed, therefore the observations of the Hon'ble Apex Court were in the said context and whereas according to learned APP the aspect of when an offence, under Section 138 of the NI Act, is committed, was not an issue which was under consideration of the Hon'ble Apex Court in the said decision. Learned APP would further submit that the decision of Yogendra Pratap Singh (supra) appears to be with regard to the pointing issue. Learned APP relying upon the decision of the Hon'ble Apex Court in case of Yogendra Pratap Singh (supra) would submit that this Court may not interfere with the impugned orders. 9. Heard learned Advocates for the respective parties who have not submitted anything further. 10. After hearing the learned Advocates and perusing the record the following admitted position emerges : (1) That the accused had given a cheque valued at Rs. 10,....
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....he sweep of the actual Section itself, but it does presage its intendment. See: Frick India Ltd. v. Union of India (1990) 1 SCC 400 and Forage & Co. v. Municipal Corporation of Greater Bombay (1999) 8 SCC 577. Accordingly, unless the provisions of the Section clearly point to the contrary, the offence is concerned with the dishonour of a cheque; and in the conundrum before us the body of this provision speaks in the same timbre since it refers to a cheque being "returned by the bank unpaid". None of the provisions of the IPC have been rendered nugatory by Section 138 of the NI Act and both operate on their own. It is trite that mens rea is the quintessential of every crime. The objective of Parliament was to strengthen the use of cheques, distinct from other negotiable instruments, as mercantile tender and therefore it became essential for the Section 138 NI Act offence to be freed from the requirement of proving mens rea. This has been achieved by deeming the commission of an offence de hors mens rea not only under Section 138 but also by virtue of the succeeding two Sections. Section 139 carves out the presumption that the holder of a cheque has received it for the discharge of a....
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....nner of doubt that the return of the cheque by the drawee bank alone constitutes the commission of the offence and indicates the place where the offence is committed. XXX XXX XXX 58. To sum up: 58.1 An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank. 58.2 Cognizance of any such offence is however forbidden under Section 142 of the Act except upon a complaint in writing made by the payee or holder of the cheque in due course within a period of one month from the date the cause of action accrues to such payee or holder under clause (c) of proviso to Section 138. 58.3 The cause of action to file a complaint accrues to a complainant/payee/holder of a cheque in due course if (a) the dishonoured cheque is presented to the drawee bank within a period of six months from the date of its issue. (b) If the complainant has demanded payment of cheque amount within thirt....
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.... of the Negotiable Instruments Act in conjunction with Section 177 of the Cr.P.C. leaves no manner of doubt that the return of the cheque by the drawee bank alone constitutes the commission of the offence and indicates the place where the offence is committed. In the considered and humble opinion of this Court, the observations of the Hon'ble Apex Court with regard to Section 138 i.e. when an offence is stated to be committed under Section 138 of the Negotiable Instruments Act, have to be read in context of the issue which was being considered by the Hon'ble Apex Court, more particularly as observed by the Hon'ble Apex Court, with regard to the place where the offence was committed. The Hon'ble Apex Court at Para 19, inter alia observed that the situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located. In the considered opinion of this Court, the observations of the Hon'ble Apex Court with regard to offence under Section 138 of the Negotiable Instruments Act, were in relation to reaching the conclusion as to where the judicial inquiry and trial of the offence be held and it is in this context th....
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....he considered opinion of this Court, the observations of the Hon'ble Apex Court were in context of the issue which was considered by the Hon'ble Apex Court in the said decision. 15. It would be pertinent to mention here that the issue before the Hon'ble Apex Court, was with regard to the diverse views take by the Hon'ble Apex Court in case of K. Bhaskaran v. Sankaran Vaidhyan Balan, reported in (1999) 7 SCC 510 and in case of Harman Electronics (P) Ltd. and Anr. Vs. M/s. National Panasonic India Limited, reported in (2009) 1 SCC 720. That the issue which was being considered by the Hon'ble Apex Court, was the territorial jurisdiction aspect, with regard to filing of a complaint under Section 138 of the NI Act and whereas it is in such context the Hon'ble Apex Court has inter alia observed that Section 138 unequivocally states that the offence is committed no sooner the drawee bank returns the cheque unpaid. 16. At this stage it would be relevant to refer to the decision of the Hon'ble Apex Court in case of Yogendra Pratap Singh (supra). In the said decision, the Hon'ble Apex Court was dealing with the question as regards when could cognizance o....
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....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 be....
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....e NI Act comprises the ingredients of the offence and the punishment which would follow and whereas proviso (a), (b) and (c) are the eventualities upon fulfillment of which an offence under Section 138 of the NI Act is made effective. 19. It would further important to note here that the Hon'ble Apex Court has at Para 36, reiterated the view as taken in M/s. Kusum Ingots & Alloys Ltd. Vs. Pennar Peterson Securities Ltd. [(2000) 2 SCC 745], in the case of Yogendra Pratap Singh (supra), that all the five essential features of Section 138 of the Negotiable Instruments Act as noted in the said judgment, must be satisfied for a complaint to be filed under Section 138. 20. What would be important to note in the present context is that the observations of the Hon'ble Apex Court that "If the period prescribed in clause (c) of the proviso to Section 138 has got 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. (emphasis supplied) Thus, in a case where the Hon'ble Apex Court had been called upon to decide whether the learned Magistrate could take cognizance of an offence punishabl....
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....wer of the cheque receives notice by the payee or holder in due course and yet does not make payment. 23. At this stage, it would be relevant to mention that while the Hon'ble Apex Court in the case of Dashrath Rupsing Rathod (supra) was considering an issue with regard to the Court having jurisdiction to try the offence, on the the order hand in Yogendra Pratap Singh (supra), the Hon'ble Apex Court was considering a question as to whether the learned Magistrate could take cognizance of an offence under Section 138 of the NI Act, if the complaint is filed by the complainant before expiry of the period of 15 days from the date of receipt of the notice under proviso (c) to Section 138 of the NI Act. Considering the law laid down by the Hon'ble Apex Court, it appears that in Dashrath Rupsing Rathod (supra), the Hon'ble Apex Court had held that the place where the drawee bank is located would be the place where the offence would be tried, since the offence under Section 138 of the NI Act is committed upon the cheque being dishonoured. That the inquiry by the Hon'ble Apex Court was into the aspect of territorial jurisdiction of a Court to try an offence under Sect....
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....decision of the Hon'ble Apex Court in case of Sandeep Kumar Bafana (supra) that the decision in Dashrath Rupsing Rathod (supra) being the earlier decision, would be the one which would hold the field, it is required to be noted that the said recourse is to be resorted to when two or more mutual irreconcilable decisions of the Hon'ble Apex Court are cited at the bar. In the instant case, in the considered opinion of this Court, judgments of the Hon'ble Apex Court in Dashrath Rupsing Rathod (supra) and in Yogendra Pratap Singh (supra) are not mutually irreconcilable. While it is true that Yogendra Pratap Singh (supra) being the later decision, had not referred to decision of the Hon'ble Apex Court in Dashrath Rupsing Rathod (supra), but then what would be required to be noted at this stage is that while the case of Dashrath Rupsing Rathod (supra) had been decided by the Hon'ble Apex Court on 01.08.2014 and case of Yogendra Pratap Singh (supra) had been decided on 19.09.2014, thus, both the decisions are approximately about the same time. 25. It would be further relevant to mention that it is by now a well settled principle of law that a decision has to be read ....
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....in the matter of applying precedents have become locus classicus: "Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo, J. ) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. * * * Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path of justice clear of obstructions which could impede it." The above passage has been quoted with approval by this Court in Sarva Shramik Sanghatana (KV), Mumbai vs. State of Maharashtra and others, (2008) 1 SCC 494. 26. In the Constitution Bench judgment in Islamic Academy of Education and another v. State of Karnataka and others, (2003) 6 SCC 697, Chief Justice V.N. Khare speaking for majority held: ....
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....ed in statutes. We do not have any doubt that when the words "adjudication of the merits of the controversy in the suit" were used by this Court in State of U.P. v. Janki Saran Kailash Chandra [1974] 1 SCR 31, the words were not used to take in every adjudication which brought to an end the proceeding before the court in whatever manner but were meant to cover only such adjudication as touched upon the real dispute between the parties which gave rise to the action. Objections to adjudication of the disputes between the parties, on whatever ground are in truth not aids to the progress of the suit but hurdles to such progress. Adjudication of such objections cannot be termed as adjudication of the merits of the controversy in the suit. As we said earlier, a broad view has to be taken of the principles involved and narrow and technical interpretation which tends to defeat the object of the legislation must be avoided." 142. In Rajeshwar Prasad Mishra v. The State of West, Bengal, AIR 1965 SC 1887, it was held: "Article 141 empowers the Supreme Court to declare the law and enact it. Hence the observation of the Supreme Court should not be read as statutory enactments.....
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.... case and no more should be read into it than what it actually says. It is neither desirable nor permissible to pick out a word or a sentence from the judgment divorced from the context of the question under consideration and treat it to be complete law decided by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. (See Mehboob Dawood Shaikh v. State of Maharashtra.)" 26. The law laid down by the Hon'ble Apex Court as referred to in the decision of M. Siddiq (supra), more particularly earlier decisions of the Hon'ble Apex Court are referred to and whereas the law in this regard has been explained in detail. That it could be stated that a case is an authority for what it actually decides and whereas the case should not be quoted for a proposition that may seem to follow logically from the same. Ratio of a judgment is what is set out in the judgment itself and whereas the observations in a judgment would necessarily have to be read in context of what is set out in the judgment and not in isolation by reading a line here and there from the judgment, the enti....
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.... of the Complaints even though non-compliance thereof will inexorably lead to the dismissal of the complaint. It cannot be contested that considerable confusion prevails on the interpretation of Section 138 in particular and Chapter XVII in general of the NI Act. The vindication of this view is duly manifested by the decisions and conclusion arrived at by the High Courts even in the few cases that we shall decide by this Judgment. We clarify that the Complainant is statutorily bound to comply with Section 177 etc. of the CrPC and therefore the place or situs where the Section 138 Complaint is to be filed is not of his choosing. The territorial jurisdiction is restricted to the Court within whose local jurisdiction the offence was committed, which in the present context is where the cheque is dishonoured by the bank on which it is drawn." 27. A plain reading of the Para 21 of the said decision leads to a very clear conclusion that the observations by the Hon'ble Apex Court with regard to offence being committed upon the cheque being dishonoured, is in context of the question that had arisen for consideration of the Hon'ble Apex Court. The observations at Para 21 quoted he....
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....ourt in case of Dashrath Rupsing Rathod (supra) was dealing with the question with regard to territorial jurisdiction of the Court in taking cognizance of a complaint under Section 138 of the Negotiable Instruments Act and all the observations of the Hon'ble Apex Court could be termed to be in context of the territorial jurisdiction question. On the other hand, insofar as the case of Yogendra Pratap Singh (supra) was concerned, the Hon'ble Apex Court was deciding the issue when the cognizance could be taken by the Court concerned, more particularly whether cognizance could be taken even before period of 15 days under clause (c) to Section 138 had elapsed. In the considered opinion of this Court, the observations of the Hon'ble Apex Court in Yogendra Pratap Singh (supra), more particularly the observations referred to hereinabove leave nothing to doubt that the intent of the Hon'ble Apex Court was to clarify on the issue and whereas the aspect of the offence under Section 138 being committed upon all the five ingredients being satisfied was clearly clarified. Under such circumstances, in the considered opinion of this Court, while at first blush, it appears that the ....
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....t of money to the payee or the holder in due course within 15 days of the receipt of the notice. 26. The ingredients of the offence were summarized in fairly similar terms in a judgment of a two judge Bench of this Court in K Bhaskaran v. Sankaran Vaidhyan Balan. Justice K T Thomas observed: "14. The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the said offence: (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice."" Thus, it appears that the view taken by the Hon'ble Apex Court in Yogendra Pratap Singh (supra) is taken by a later bench of the Hon'ble Apex Court consisting three Hon'ble Judges and whereas while decision of Yogendra Pratap Singh (supra) has not been expressly referred to or followed but at the same time, as observed hereinabove, the same view about when an offence is committed u....