Subodh S. Salaskar Vs.
Jayprakash M. Shah & ANR. [2008] INSC 1288 (1 August 2008)
Judgment
IN THE SUPREME COURT
OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 1190 OF 2008
[Arising out of SLP (Crl.) No. 541 of 2008] Subodh S. Salaskar ...Appellant
Versus Jayprakash M. Shah & Anr. ...Respondents
S.B. SINHA, J :
1.
Leave
granted.
2.
Whether
the proviso appended to Section 142 of the Negotiable Instruments Act, 1881
(for short "the Act") inserted by the Negotiable Instruments
(Amendment and Miscellaneous Provisions) Act, 2002, is retrospective in
operation is the question involved in this appeal which arises out of a
judgment and order dated 19.10.2007 passed by the High Court of Judicature at
Bombay in Criminal Writ Petition No. 330 of 2007.
3.
The
relationship between the parties hereto was that of a borrower and creditor. A
financial loan of Rs. 1,70,000/- was obtained by the appellant in 1996 from the
respondent No. 1, which according to him has been paid off. Two post dated
cheques, one bearing No. 460157 dated 6.12.1996 for a sum of Rs. 26,900/- and
the other bearing No. 460158 dated 28.09.2000 for a sum of Rs. 1,70,000/-,
however, were handed over to him.
4.
Appellant
contends that the amount of loan was repaid in cash.
Admittedly, the cheques
were presented before the bank on 10.01.2001.
They were returned to
the respondent No. 1 by the bank alleging that no such account, in the name of
the appellant was in operation. A legal notice dated 17.01.2001 was sent by
speed post asking the appellant to 3 pay the said amount of Rs. 1,70,000/-
failing which legal action including criminal action would be taken against
him.
5.
A
complaint petition alleging commission of an offence under Section 138 of the
Act, however, was filed only on 20.04.2001.
6.
Indisputably,
the complaint petition was sought to be amended for adding Section 420 of the
Indian Penal Code in the complaint petition.
The said application
was allowed by an order dated 14.08.2001.
7.
Appellant
filed an application for discharge on 16.12.2003 inter alia on the premise that
the said complaint petition was barred by limitation. It was dismissed by an
order dated 14.11.2006. The revision application filed by the appellant before
the learned Additional Sessions Judge was also dismissed. A criminal writ
petition filed by the appellant marked as Criminal Writ Petition No. 330 of
2007 before the High Court of Bombay has been dismissed by reason of the
impugned judgment holding:
(i) The question as
to whether the complaint is barred by limitation is a mixed question of law and
fact. Even otherwise as a result 4 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;
(ii) Although the
Magistrate could not have allowed amendment of the complaint petition but as it
discloses sufficient averments in regard to commission of an offence under
Section 420 of Indian Penal Code, the Trial Court was justified in issuing the
process in respect of the said provision also.
8.
Mr.
Manish Mohan, learned counsel appearing on behalf of the appellant would submit
that the High Court committed a serious error in passing the impugned judgment
insofar as it failed to take into consideration that :
(i) the complaint
petition was barred by limitation, which would be evident from the admitted
facts;
(ii) the proviso
appended to Clause (b) of Section 142 being substantive in nature cannot be
held to be retrospective in operation;
(iii) allegations
made in the complaint petition even if given face value and taken to be correct
in their entirety, no case has been 5 made out for taking cognizance under
Section 420 of the Indian Penal Code;
(iv) in any event, as
the principal complaint being for commission of an offence under Section 138 of
the Act was not maintainable, the application for amendment to insert Section
420 of the Indian Penal Code was also not maintainable.
9.
Mr.
Santosh Paul, learned counsel appearing on behalf of the respondent No. 1,
submitted that from a perusal of the complaint petition it would appear that
the date of service of notice being not fixed and the complainant having asked
the post office to disclose the date of actual service of notice, it cannot be
said that the legal notice was served upon the accused immediately after
issuance thereof.
In any event, as the
complaint petition disclosed commission of an offence on the part of the
appellant under Section 420 of the Indian Penal Code, the High Court's judgment
is unassailable.
10.
Section
138 of the Act provides a penal provision. The object of the Parliament in
brining the same in the statute book is well-known, viz., to create an
atmosphere of faith and reliance in the banking system.
11.
The
Act was amended in the year 2002 whereby additional powers have been conferred
upon the court to take cognizance even after expiry of the period of limitation
by conferring on it a discretion to waive the period of one month.
12.
Before
embarking on the questions raised, we may notice that the proviso appended to
Section 138 of the Act limits the applicability of the main provision stating:
"138 - Dishonour
of cheque for insufficiency, etc., of funds in the account *** *** *** 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 7 (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."
Section 142 of the
Act also puts a limitation in the power of the court to take cognizance of the
offences, which reads 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 8
class shall try any offence punishable under section 138."
13.
As
noticed hereinbefore, the proviso appended to Clause (b) of Section 142 of the
Act was inserted by the Negotiable Instruments (Amendment and Miscellaneous
Provisions) Act, 2002.
14.
A
complaint petition alleging commission of an offence under Section 138 of the
Act must demonstrate that the following ingredients exist, i.e.:
(a) a cheque was
issued;
(b) the same was
presented;
(c) but, it was
dishonoured;
(d) a notice in terms
of the said provision was served on the person sought to be made liable; and
(e) despite service of notice, neither any payment was made nor other obligations,
if any, were complied with within fifteen days from the date of receipt of the
notice.
9 [See S.M.S.
Pharmaceuticals Ltd. v. Neeta Bhalla and Another (2007) 4 SCC 70, Saroj Kumar
Poddar v. State (NCT of Delhi) and Another (2007) 3 SCC 693 and DCM Financial
Services Ltd. v. J.N.
Sareen and Another
2008 (8) SCALE 54]
15.
Indisputably,
therefore, unless the conditions precedent for taking cognizance of an offence
under Section 138 of the Act are satisfied, the court will have no jurisdiction
to pass an order in that behalf.
16.
We
will have to examine the contentions raised by the leaned counsel for the
parties hereto keeping in view the aforementioned legal principles in mind.
Before, however, we advert thereto, we may place on record that the averments
made in the complaint petition in regard to service of notice are in the
following terms:
"8. I say that
the said Bank of the Accused, returned / dishonoured Cheque No. 460158 dated
28.09.2000 of Rs. 1,70,000/- drawn on Bank of India, Maheshwari Udyan Branch,
Mumbai, under Bank remark "NO SUCH ACCOUNT WITH US". The said remark
was given in handwriting by the Branch Manager of the Bank of India, Maheshwari
Udyan Branch, Mumbai in its Bank Memo dated 10.01.2001, though in the said Bank
Memo at Sr. No. 11, it is printed at 11(b) Account closed and at 11(c) no
account. This Bank Memo was received by 10 me on 17.01.2001. Attached herewith
is Xerox copy of the said Cheque No. 460158 dated 28.09.2000 of Bank of India,
10.01.2001 and marked thereto as Exhibit "A" thereto which are very
clear and self-explanatory. I am also attaching herewith Xerox copy of
dishonoured Cheque No. 460157 dated 06.12.1996 of Rs.
26,900/- of the
Accused drawn on Bank of India, Maheshwari Udyan Branch, Mumbai and marked it
as Exhibit "B" thereto which speak much more about the Bank account
No. 1365 of the Accused lying with his said Bank.
9. I say that
immediately, vide my letter Ref. No. JMS/SSS/CRIM/01/2001 dated 17.01.2001, I
sent demand notice to the Accused through Speed Post Acknowledgment due postal
services. Attached herewith is Xerox copy of the said Demand Notice along with
copy of postal speed post A.D. receipt No.
000271184 - SSPNL 650
dated 19.01.2001 and marked it as Exhibit "C" Colly thereto which is
very clear and self-explanatory. I say that I have not yet received Speed Post
Acknowledgement Slip with due acknowledgement thereon from the Accused as to
the receipt of the said Demand notice.
10. I say that with
abundant and due precautions with a view to avoid technicalities, through my
advocate, Mr. Sunil Bagwe's letter Ref. No. SSB/JMS/BOI/01/2001 dated
05.03.2001 asked for detailed information as to the reasons given by the Branch
Manager, in his Bank memo dated 10.01.2001. The Branch Manager of the said Bank
Branch of the Accused, after various my approaches, finally given
acknowledgement of the receipt of the aforesaid letter of my advocate on
14.03.2001, attached herewith is Xerox copy of the said letter and marked it as
Exhibit "D" thereto which is very clear and self-explanatory. The 11
Branch Manager of Bank of India, Maheshwari Udyan Branch, Mumbai vide his
letter Ref. No.
MU/ADV/MNI/39/853
dated 14.03.2001, given vague, non-cooperative, unwilling, ill-wishes reply to
my advocate's letter by courier services on 26.03.2001. Attached herewith is
Xerox copy of the said letter of the Bank of India and marked it as Exhibit
"E" thereto which is very clear and self-explanatory."
17.
As
regards purported commission of an offence under Section 420 of the Indian
Penal Code, on the part of the petitioner, it was alleged:
"16. I say that
the aforesaid Cheque which was issued by the Accused in discharge of his debts
and liability to me in full, which were dishonoured by the Bank of the accused
with reason "No such account with us". I say that the Accused failed
and neglected to make payments as per my demand notice dated 17.01.2001. The
Accused has failed and neglected to make good attempts for payment of his
dishonoured cheques on receipt of my demand notice, within the stipulated
period as provided under Section 138(c) of the N.I. Act, 1988, therefore, the
Accused has committed an offence punishable under section 138 read with section
141 and section 142 of the N.I. Act 1881 (as amended) and Section 420 of the
I.P.C."
18.
The
cause of action of filing the said complaint was stated in the following terms:
12 "17. I say
that the aforesaid cheque of the drawer, the Accused herein was returned by the
Complainant's banker i.e. the Deccan Merchant Co-op. Bank Ltd. Ghatkopar (E)
Branch, Mumbai 400 077, which is situated within the jurisdiction of this
Hon'ble Court and, therefore, this Hon'ble Court is competent to take
cognizances of this present complaint and try the same. The demand notice to
the Accused was issued within the stipulated period and the present complaint
has been filed within the prescribed period as provided under Section 142 (b)
of the Negotiable Instruments Act, 1881 (as amended) and, therefore, the Accused
has committed an offence punishable under Section 138 read with section 141 and
section 142 of the N.I. Act 1881 (as amended) and Section 420 of the I.P.C.
18. I say that the
Accused has drawn Cheque of post dated in Mumbai with intention to cheat me. Hence,
the accused must have closed his Bank Account No. 1365 of Bank of India,
Maheshwari Udyan Branch, Mumbai subsequently and now, after the receipt of my
demand notice, the accused has refused to make the payment of his dishonoured
cheques as above in Mumbai. Hence, this Hon'ble Court has jurisdiction to
entertain, try and decide this present complaint. I say that the Accused has
committed criminal offences under the Negotiable Instruments Act, 1881 (as
Amended) and section 420 of the I.P.C., within the jurisdiction to take
cognizances of the same and try and decide the said offences."
19.
A
complaint petition in view of Clause (b) of Section 142 of the Act was required
to be filed within one month from the date on which the cause of action arose
in terms of clause (c) of the proviso to Section 138 of the Act which
stipulates that "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".
The legal notice
admittedly was issued on 17th January, 2001. It was sent by speed post. It was
supposed to be served within a couple of days. A bare perusal of the statements
made in paragraph 10 of the complaint petition, as quoted hereinbefore, clearly
demonstrate that although the actual date of service of notice was allegedly
not known, the complainant proceeded on the basis that the same was served
within a reasonable period; otherwise in absence of service of notice or deemed
service thereof, the question of non-compliance of clause (c) of the proviso
appended to Section 138 of the Act would not arise and consequently the
complaint petition would not be maintainable..
20.
In
Jindal Steel and Power Ltd. and Another v. Ashoka Alloy Steel Ltd. and Others
[(2006) 9 SCC 340], this Court held:
14 "2. By the
impugned order, the High Court has quashed the prosecution under Section 138 of
the Negotiable Instruments Act, 1881 (for short "the Act") and
Section 420 of the Penal Code, on the sole ground that the complaint was filed
two days after the expiry of limitation. In the present case, notice was sent
under Section 138 of the Act on 4-1-1997, which was served on the accused on
10-1-1997, giving him 15 days' time for making payment, which expired on
25-1-1997. Cause of action to file the complaint accrued on 26-1-1997, which
day has to be excluded in computing the period of limitation, as required under
Section 12(1) of the Limitation Act, 1963. Therefore, the limitation would be
counted from 27-1-1997 and the complaint was filed on 26-2-1997, within a
period of one month from that date, as such, the same was filed well within
time. We find that the point is concluded by a judgment of this Court in Saketh
India Ltd. v. India Securities Ltd. in which case taking into consideration the
provisions of Section 12(1) of the Limitation Act, it was laid down that the
day on which cause of action had accrued has to be excluded for reckoning the
period of limitation for filing a complaint under Section 138 of the Act. In
the present case, after excluding the day when cause of action accrued, the
complaint was filed well within time; as such the High Court was not justified
in holding that there was two days' delay in filing the complaint. For the
foregoing reasons, we are of the view that the High Court was not justified in
quashing prosecution of the respondents."
21.
In
terms of the provisions of the General Clauses Act, a notice must be deemed to
have been served in the ordinary course subject to the fulfillment of the
conditions laid down therein. Section 27 of the General Clauses Act reads as
under:
"27. Meaning of
service by post.--Where any Central Act or Regulation made after the
commencement of this Act authorises or requires any document to be served by
post, whether the expression `serve' or either of the expression `give' or
`send' or any other expression is used, then, unless a different intention
appears, the service shall be deemed to be effected by properly addressing,
pre- paying and posting by registered post, a letter containing the document,
and, unless the contrary is proved, to have been effected at the time at which
the letter would be delivered in the ordinary course of post."
Thirty days' time
ordinarily must be held to be sufficient for service of notice. In fact when
the service of notice is sought to be effected by Speed Post, ordinarily the
service takes place within a few days. Even under Order V, Rule 9(5) of the
Code of Civil Procedure, 1908, summons is presumed to be served if it does not
come back within thirty days. In a situation of this nature, there was no
occasion for the Court to hold that service of notice could not be effected
within a period of thirty days.
22.
Presumption
of service, under the statute, would arise not only when it is sent by
registered post in terms of Section 27 of the General Clauses Act but such a
presumption may be raised also under Section 114 of the Evidence Act. Even when
a notice is received back with an endorsement that the party has refused to
accept, still then a presumption can be raised as regards the valid service of
notice. Such a notice, as has been held by a Three-Judge Bench of this Court in
C.C. Alavi Haji v. Palapetty Muhammed and Another [(2007) 6 SCC 555] should be
construed liberally, stating :
"17. It is also
to be borne in mind that the requirement of giving of notice is a clear
departure from the rule of criminal law, where there is no stipulation of
giving of a notice before filing a complaint. Any drawer who claims that he did
not receive the notice sent by post, can, within 15 days of receipt of summons
from the court in respect of the complaint under Section 138 of the Act, make
payment of the cheque amount and submit to the court that he had made payment
within 15 days of receipt of summons (by receiving a copy of complaint with the
summons) and, therefore, the complaint is liable to be rejected. A person who
does not pay within 15 days of receipt of the summons from the court along with
the copy of the complaint under Section 138 of the Act, cannot obviously
contend that there was no proper service of notice as required under Section
138, by ignoring statutory presumption to the contrary under Section 27 of the
GC Act 17 and Section 114 of the Evidence Act. In our view, any other
interpretation of the proviso would defeat the very object of the legislation.
As observed in
Bhaskaran case if the "giving of notice" in the context of Clause (b)
of the proviso was the same as the "receipt of notice"
a trickster cheque
drawer would get the premium to avoid receiving the notice by adopting
different strategies and escape from legal consequences of Section 138 of the
Act."
[Emphasis supplied]
23.
The
complaint petition admittedly was filed on 20.04.2001. The notice having been
sent on 17.01.2001, if the presumption of service of notice within a reasonable
time is raised, it should be deemed to have been served at best within a period
of thirty days from the date of issuance thereof, i.e., 16.02.2001. The accused
was required to make payment in terms of the said notice within fifteen days
thereafter, i.e., on or about 2.03.2001. The complaint petition, therefore,
should have been filed by 2.04.2001.
24.
Ex
facie, it was barred by limitation. No application for condonation of delay was
filed. No application for condonation of delay was otherwise maintainable. The
provisions of the Act being special in nature, in terms thereof the
jurisdiction of the court to take cognizance of 18 an offence under Section
138 of the Act was limited to the period of thirty days in terms of the proviso
appended thereto. The Parliament only with a view to obviate the aforementioned
difficulties on the part of the complainant inserted proviso to Clause (b) of
Section 142 of the Act in 2002. It confers a jurisdiction upon the court to
condone the delay. It is, therefore, a substantive provision and not a
procedural one. The matter might have been different if the Magistrate could
have exercised its jurisdiction either under Section 5 of the Limitation Act,
1963 or Section 473 of the Code of Criminal Procedure, 1976. The provisions of
the said Acts are not applicable. In any event, no such application for
condonation of delay was filed. If the proviso appended to Clause (b) of
Section 142 of the Act contained a substantive provision and not a procedural
one, it could not have been given a retrospective effect. A substantive law, as
it is well-settled, in absence of an express provision, cannot be given a
retrospective effect or retroactive operation.
25.
In
Madishetti Bala Ramul (Dead) By LRs. v. Land Acquisition Officer [(2007) 9 SCC
650], this Court held as under:
"18. It is not
the case of the appellants that the total amount of compensation stands
reduced. If it had not been, we fail to understand as to how Section 25 will
have any application in the instant case. Furthermore, 19 Section 25 being a
substantive provision will have no retrospective effect. The original award was
passed on 8-2-1981: Section 25, as it stands now, may, therefore, not have any application
in the instant case."
The question is now
covered by a judgment of this Court in Anil Kumar Goel v. Kishan Chand Kaura
[2008 AIR SCW 295] holding:
"8. All laws
that affect substantive rights generally operate prospectively and there is a
presumption against their retrospectivity if they affect vested rights and
obligations, unless the legislative intent is clear and compulsive. Such
retrospective effect may be given where there are express words giving
retrospective effect or where the language used necessarily implies that such
retrospective operation is intended.
Hence the question
whether a statutory provision has retrospective effect or not depends primarily
on the language in which it is couched. If the language is clear and
unambiguous, effect will have to be given to the provision is question in
accordance with its tenor. If the language is not clear then the court has to
decide whether, in the light of the surrounding circumstances, retrospective
effect should be given to it or not. (See: Punjab Tin Supply Co., Chandigarh
etc. etc. v. Central Government and Ors., AIR 1984 SC 87).
9. There is nothing
in the amendment made to Section 142(b) by the Act 55 of 2002 that the same was
intended to operate retrospectively.
In fact that was not
even the stand of the respondent. Obviously, when the complaint was filed on
28.11.1998, the respondent could not have foreseen that in future any
amendment 20 providing for extending the period of limitation on sufficient
cause being shown would be enacted."
26.
Therefore,
there cannot be any doubt whatsoever that the courts below committed a manifest
error in applying the proviso to the fact of the instant case. If the complaint
petition was barred by limitation, the learned Magistrate had no jurisdiction
to take cognizance under Section 138 of the Act. The direction to issue summons
on the appellant, therefore, being illegal and without jurisdiction was a
nullity.
27.
Section
415 of the Indian Penal Code defines "cheating". The said provision
requires: (i) deception of any person, (ii) whereby fraudulently or dishonestly
inducing that person to deliver any property to any person or to consent that
any person shall retain any property, or (iii) intentionally inducing that
person to do or omit to do anything which he would not do or omit if he were
not so deceived, and which act or omission causes or is likely to cause damage
or harm to that person in body, mind, reputation or property. Deception of any
person is common to the second and third requirements of the provision. [See
Devender Kumar Singla v. Baldev Krishan Singla (2005) 9 SCC 15] 21
28.
Noticing
the ingredients of cheating, this Court in Suryalakshmi Cotton Mills Ltd. v.
Rajvir Industries Ltd. and Ors., [JT 2008 (1) SC 340], held :
"A bare perusal
of Section 415 read with Section 420 of the Indian Penal Code would clearly
lead to the conclusion that fraudulent or dishonest inducement on the part of
the accused must be at the inception and not at a subsequent stage.
22. For the said
purpose, we may only notice that blank cheques were handed over to the accused
during the period 2000-2004 for use thereof for business purposes but the
dispute between the parties admittedly arose much thereafter i.e. in 2005.
In B. Suresh Yadav v.
Sharifa Bee 2007 (12) SCALE 364, it was held;
13. For the purpose
of establishing the offence of cheating, the complainant is required to show
that the accused had fraudulent or dishonest intention at the time of making
promise or representation. In a case of this nature, it is permissible in law
to consider the stand taken by a party in a pending civil litigation. We do
not, however, mean to lay down a law that the liability of a person cannot be
both civil and criminal at the same time. But when a stand has been taken in a complaint
petition which is contrary to or inconsistent with the stand taken by him in a
civil suit, it assumes significance. Had the fact as purported to have been
represented before us that the appellant herein got the said two rooms 22
demolished and concealed the said fact at the time of execution of the deed of
sale, the matter might have been different. As the deed of sale was executed on
30.9.2005 and the purported demolition took place on 29.9.2005, it was expected
that the complainant/first respondent would come out with her real grievance in
the written statement filed by her in the aforementioned suit. She, for reasons
best known to her, did not choose to do so.
No case for
proceeding against the respondent under Section 420 of the Indian Penal Code is
therefore, made out.
23. Filling up of the
blanks in a cheque by itself would not amount to forgery. Whereas in the
complaint petition, allegations have been made that it was respondent Nos. 2
and 3 who had entered into a conspiracy to commit the said offence as indicated
hereinbefore, in the counter affidavit, it has been alleged that the employees
of the Respondent Company did so."
29.
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, 23 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.
30.
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.
31.
For
the reasons aforementioned, the impugned judgment cannot be sustained which is
set aside accordingly. The appeal is allowed.
...............................J.
[S.B. Sinha]
................................J
[Cyriac Joseph]
New
Delhi;
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