Allowed

Nirmal Ch.Swain v. Commnr.,Consolidatio

Orissa HC20 Dec 2016OJC/13075/1998

Case brief

AI extract

What is this about?

The High Court allowed a criminal revision petition against conviction and sentence under section 138 of the Negotiable Instruments Act. Relying on the Supreme Court decision in Yogendra Pratap Singh, the court held that the complaint filed by the opposite party was premature as it was lodged before the expiry of 15 days from the receipt of the legal notice by the petitioner. Consequently, no offe

What did the court decide?

The impugned judgment and order of conviction of the petitioner are set aside. He is acquitted of the offence under section 138 of the N.I. Act.

Nirmal Ch.Swain Vs Commnr.,Consolidatio — Cheque Dishonour | Orissa HC (2016)

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IN THE HIGH COURT OF ORISSA, CUTTACK

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Criminal Revision NO. 137 of 2000

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From the judgment and order dated 09.09.1998 passed by J.M.F.C., Balasore in I.C.C. No.45 of 1996 (Trial No.328 of 1998) and the judgment and order dated 21.01.2000 passed by Sessions Judge, Balasore-Bhadrak, Balasore in Criminal Appeal No.59 of 1998.

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Ranjan Kumar Senapati ……… Petitioner
-Versus-
State of Orissa & Anr. ……… Opp. parties
For Petitioner: - Mr. Santanu Kumar Sarangi Tarashankar Senapati
For State of Orissa: - Mr. Deepak Kumar Addl. Standing Counsel
For Opp. Party No.2: - Miss Savitri Ratho
--------------------- P R E S E N T:
THE HONOURABLE MR. JUSTICE S.K. SAHOO
---------------------------------------------------------------------------------- Date of Hearing and Judgment: 05.01.2017 ----------------------------------------------------------------------------------

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S. K. Sahoo, J . This revision petition has been filed by the petitioner

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Ranjan Kumar Senapati challenging the impugned judgment and order dated 09.09.1998 of the learned J.M.F.C., Balasore passed in I.C.C. No.45 of 1996 (Trial No.328 of 1998) in convicting the

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petitioner under section 138 of the Negotiable Instruments Act, 1881 (hereafter “N.I. Act”) and sentencing him to undergo simple imprisonment for three months.The order of conviction was confirmed in appeal by the learned Sessions Judge, Balasore-Bhadrak, Balasore in Criminal Appeal No. 59 of 1998 vide impugned judgment and order dated 21.01.2000 but the sentence was reduced from simple imprisonment for three months to simple imprisonment for one month.

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The prosecution case, in short, is that the complainant-opposite party no.2 deals with shoe business in the name and style as Raj Enterprises at Khalasimahala, Balasore and the petitioner was having a shoe shop at Proof Road, Balasore namely Subhadra Fancy Shoe Store. The opposite party no.2 supplied shoes worth of Rs.23,945/- on credit basis to the petitioner and the petitioner had signed on the credit bill in acknowledgement of the debt. Later on 30.10.1995 the petitioner issued two cheques valuing Rs.20,000/- bearing cheque nos.7252385 and 7252386 upon his account at Union Bank, Balasore in favour of the opposite party no.2. The opposite party no.2 presented those two cheques in his current account at Andhra Bank, Balasore for collection of the amount on 31.10.1995 but the Union Bank, Balasore dishonoured the two

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cheques with endorsement “INSUFFICIENT FUNDS” in the account. The opposite party no.2 again presented those two cheques on the request of the petitioner on 20.01.1996 before Andhra Bank, Balasore and again those cheques were returned on 22.01.1996 with endorsement “INSUFFICIENT FUNDS”. The opposite party no.2 issued a legal notice (Ext.10) on 27.01.1996 by registered post with A.D. which was received by the petitioner on 31.01.1996. Since the petitioner failed to pay the cheque amount to the opposite party no.2, the complaint petition was filed before the learned S.D.J.M., Balasore on 05.02.1996. The initial statement of the complainant was recorded and on 12.08.1996 the learned Magistrate took cognizance of offence under section 138 of N.I.Act and issued process against the petitioner.

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During course of trial, the complainant examined three witnesses and proved ten documents. The petitioner examined one witness. On consideration of the available materials on record, the learned Trial Court held the petitioner guilty under section 138 of the N.I. Act and sentenced him to undergo simple imprisonment for three months while maintaining the order of conviction under section 138 of the N.I. Act. The learned Appellate Court while maintaining the order of

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conviction reduced the sentence from simple imprisonment for three months to simple imprisonment for one month.

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The learned counsel for the petitioner Mr. Santanu Kumar Sarangi contended that the impugned judgment and order of conviction of the Courts below is not sustainable in the eye of law inasmuch as the complaint petition is a pre-mature one. He drew the attention of this Court to the provision under section 138 of the N.I. Act as was prevailing at the time of commission of offence and contended that in view of the proviso to section 138 of the N.I. Act, the cheque has to be presented to the bank within a period of six months from the date on which it was drawn or within the period of its validity, whichever is earlier and the payee or the holder in due course of the cheque, as the case may be, must make a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of the information by him from the bank regarding the return of the cheque as unpaid and if 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 cause of action will arise.

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Learned counsel for the petitioner further contended

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that since the notice was received by the petitioner on 31.01.1996 as per the complaint petition and since fifteen days as stipulated under clause (c) of the proviso to section 138 of the N.I. Act has not expired at the time of filing of the complaint petition on 05.02.1996, the complaint petition is not a valid one in the eye of law. He further contended that only after the expiry of fifteen days of the date of receipt of the notice by the drawer, the cause of action would start and the complaint petition can be filed within a month of the date on which the cause of action arises in view of section 142(b) of the N.I. Act.

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Learned counsel for the petitioner further contended that the provision is mandatory in nature and giving fifteen days time to the drawer of the cheque is to make payment of the cheque amount for the purpose of not proceeding with any complaint case and therefore, if the complaint petition is filed before the date of commencement of the cause of action then the drawer of the cheque would be deprived in making payment of the amount within prescribed time and the whole purpose of enactment of such a provision would be frustrated.

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Learned counsel for the petitioner drew the attention of this Court to the decision of the Hon’ble Supreme Court in the

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case of Yogendra Pratap Singh -Vrs.- Savitri Pandey & another reported in (2014) 59 Orissa Criminal Reports

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(SC) 577 to substantiate his argument and contended that since in view of the ratio decided by the Hon’ble Supreme Court, the complaint petition filed by the opposite party no.2 is no complaint at all in the eye of law, the order of cognizance as well as the consequential order of conviction passed by the learned Trial Court which was confirmed by the Appellate Court is also vitiated in the eye of law and therefore, it should be set aside.

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Learned counsel for the opposite party no.2 Miss Savitri Ratho on the other hand supported the impugned judgment and order of conviction of the Courts below and contended that there is no illegality or infirmity in the same and the revision petition should be dismissed as such point was never raised before both the learned Courts below.

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The learned counsel for the petitioner contended that a legal point can be raised at any stage of the proceeding and this Court is not precluded to consider such point merely because it was not raised in the Trial Court as well as in the Appellate Court and since the decision of the Hon’ble Apex Court in the case of Yogendra Pratap Singh (supra) was pronounced on 19.09.2014 much after the pronouncement of the judgments of

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the Courts below, therefore, the question of raising such

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contention before those Courts does not arise.

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In case of Yogendra Pratap Singh (supra) the

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questions were formulated as follows:-

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(i) Can cognizance of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 be taken on the basis of a complaint filed before the expiry of the period of 15 days stipulated in the notice required to be served upon the drawer of the cheque in terms of Section 138 (c) of the Act aforementioned? And,

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(ii) If answer to question No.1 is in the negative, can the complainant be permitted to present the complaint again notwithstanding the fact that the period of one month stipulated under Section 142 (b) for the filing of such a complaint has expired?

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The Hon’ble Supreme Court answered the questions

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as follows:-

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“36. Can an offence under Section 138 of the N.I. 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 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 N.I. Act unless the period of 15 days has elapsed. Any

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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 N.I. 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 N.I. Act before the expiry of 15 days from the date on which the notice has been served on the drawer/accused is no complaint in the eye of law, obviously, no cognizance of an offence can be taken on the basis of such complaint. Merely because at the time of taking cognizance by the Court, the period of 15 days has expired from the date on which notice has been served on the drawer/accused, the Court is not clothed with the jurisdiction to take cognizance of an offence under Section 138 on a complaint filed before the expiry of 15 days from the date of receipt of notice by the drawer of the cheque.

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A complaint filed before expiry of 15 days from the date on which notice has been served on drawer/accused cannot be said to disclose the cause of action in terms of clause (c) of the proviso to Section 138 and upon such complaint which does not disclose the cause of action, the Court is not competent to take cognizance. A conjoint reading of Section 138, which defines as to when and under what circumstances an offence can be said to have been committed, with Section 142(b) of the N.I. 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

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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 N.I. Act, as noted in the judgment of this Court in Kusum Ingots & Alloys Ltd.; AIR 2000 SC 954 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 N.I. Act.

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We, therefore, do not approve the view taken by this Court in Narsingh Das Tapadia; (2000) 7 SCC 183 and so also the judgments of various High Courts following Narsingh Das Tapadia 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 premature and if on the date of taking cognizance a period of 15 days from the date of service of notice on the drawer/accused has expired, such complaint was legally maintainable and, hence, the same is overruled.

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Rather, the view taken by this Court in Sarav Investment & Financial Consultancy; (2007)14 SCC 753 wherein this Court held that service of notice in terms of Section 138 proviso (b) of the N.I. Act was a part of the cause of action for lodging the complaint and communication to the accused about the fact of dishonouring of the cheque and calling upon to pay the amount within 15 days was

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imperative in character, commends itself to us. As noticed by us earlier, no complaint can be maintained against the drawer of the cheque before the expiry of 15 days from the date of receipt of notice because the drawer/accused cannot be said to have committed any offence until then. We approve the decision of this Court in Sarav Investment & Financial Consultancy and also the judgments of the High Courts which have taken the view following this judgment that the complaint under Section 138 of the N.I. Act filed before the expiry of 15 days of service of notice could not be treated as a complaint in the eye of law and criminal proceedings initiated on such complaint are liable to be quashed.

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Our answer to question (i) is, therefore, in the negative.

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The other question is that if the answer to question (i) is in the negative, can the complainant be permitted to present the complaint again notwithstanding the fact that the period of one month stipulated under Section 142(b) for the filing of such a complaint has expired.

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Section 142 of the N.I. Act prescribes the mode and so also the time within which a complaint for an offence under Section 138 of the N.I. Act can be filed. A complaint made under Section 138 by the payee or the holder in due course of the cheque has to be in writing and needs to be made within one month from the date on which the cause of action has arisen under clause (c) of the proviso to Section 138. The period of one month under Section 142(b) begins from the date on which the cause of action has arisen under clause (c) of the proviso to Section 138. However, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within the prescribed period of one

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month, a complaint may be taken by the Court after the prescribed period. Now, since our answer to question (i) is in the negative, we observe that the payee or the holder in due course of the cheque may file a fresh complaint within one month from the date of decision in the criminal case and, in that event, delay in filing the complaint will be treated as having been condoned under the proviso to clause (b) of Section 142 of the N.I. Act. This direction shall be deemed to be applicable to all such pending cases where the complaint does not proceed further in view of our answer to question (i). As we have already held that a complaint filed before the expiry of 15 days from the date of receipt of notice issued under clause (c) of the proviso to Section 138 is not maintainable, the complainant cannot be permitted to present the very same complaint at any later stage. His remedy is only to file a fresh complaint; and if the same could not be filed within the time prescribed under Section 142(b), his recourse is to seek the benefit of the proviso, satisfying the Court of sufficient cause. Question (ii) is answered accordingly”.

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In view of the decision of the Hon’ble Supreme Court

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in the case of Yogendra Pratap Singh (supra), it is very clear that the complaint petition which was filed on 05.02.1996 by the opposite party no.2 after receipt of the legal notice by the petitioner on 31.01.1996 is a pre-mature complaint. An opportunity has been given by the legislature itself by providing a notice to the drawer and for payment of the amount within fifteen days of the receipt of the said notice and if he fails to comply with clause (c) of section 138 of the N.I. Act, filing of a

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complaint within one month from the date of cause of action is also provided under sub-section (b) of section 142 of the N.I. Act. The drawer of the cheque has got an opportunity to know in advance before filing the complaint that the cheque was dishonoured for a particular reason upon receipt of the notice from the payee or the holder of the cheque and thereby making payment of the cheque amount to the payee so as to prevent initiation of any complaint case proceeding against him. The penal provisions have to construed strictly and not liberally. A pre-mature complaint cannot be the foundation of a valid prosecution.

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Therefore, I am of the view that complaint petition filed by the opposite party no.2 was not legally maintainable and the order of cognizance taken by the learned Magistrate under section 138 of the N.I. Act as well as the impugned judgment and order of conviction passed by the learned Trial Court which was confirmed by the learned Appellate Court is also not sustainable in the eye of law and therefore, revision petition is allowed. The impugned judgment and order of conviction of the petitioner is set aside and he is acquitted of the offence under section 138 of the N.I. Act.

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However, in view of the judgment of the Hon’ble Supreme Court in the case of Yogendra Pratap Singh (supra) in case the opposite party no.2 files a fresh complaint before the competent Court within one month from today, the concerned Court shall take into account the ratio decided in the aforesaid case and proceed accordingly.

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With the aforesaid observation, the criminal revision

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petition is allowed.

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………………………… S.K. Sahoo, J.

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Orissa High Court, Cuttack The 5^th January, 2017/Sisir

Nirmal Ch.Swain v. Commnr.,Consolidatio

Case brief

What is this about?

What did the court decide?

Nirmal Ch.Swain v. Commnr.,Consolidatio

Case brief

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