Abhishek Kumar vs State Of U.P. & Another
2016 Latest Caselaw 3189 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Reserved
 
Court No. - 48
 
Case :- CRIMINAL REVISION No. - 1427 of 2016
 
Revisionist :- Abhishek Kumar
 
Opposite Party :- State Of U.P. & Another
 
Counsel for Revisionist :- Shiv Bahadur Singh
 
Counsel for Opposite Party :- G.A.
 

 
Hon'ble Suneet Kumar, J
 
	Revision is directed against the summoning order dated 5 March 2016, in proceedings under Section 138  Negotiable Instrument Act 1881 (in brief NI Act), P.S. Line Bazar, District Jaunpur passed in Complaint Case No. 264 of 2015 (Vinod Kumar Tiwari Vs. Abhishek Kumar).
 
	The facts briefly stated is that the complainant-opposite party no.2 filed a complaint on  14.5.2015 against the applicant-revisionist contending that two cheques dated 29.9.2014 and 13.10.2014 respectively, were returned by the Bank on 7.4.2015 for insufficient funds. On same date notice  by registered post was sent, the applicant did not pay the dues, thereafter, the present complaint was instituted.
 
	It is sought to be urged that there was no cause of action for filing the complaint for the reason that the complaint was premature as it was filed within 15 days from the date of notice dated 7.4.2015, the date of receipt of the notice was not mentioned in the complaint, therefore, in terms of section 27  General Clauses Act, 1897, there would be a presumption that the notice would be served within 30 days, therefore, the cause for filing the complaint would have  arisen on 22.5.2015 i.e. after a lapse of 45 days, further, the cheques were presented beyond their statutory valid period, i.e cheques dated 29.9.2014 and 31.10.2014 were presented on 7.4.2015, the validity period would be upto 29.12.2014 (three months) as per notification of Reserve Bank of India dated 1 April 2004.
 
	Section 138 N.I. Act is a penal provision, it must, therefore, be construed strictly, section 138 (2) enacting part of the provision makes it abundantly clear that what constitutes an offence punishable with imprisonment and/or fine is the dishonour of a cheque for insufficiency of funds, etc in the account maintained by the drawer with the bank for discharge of a debt or other liability whether in full or part. The language used in the provision is unambiguous and the ingredients of the offence clearly discernible namely (a) cheque is drawn by the accused on an account maintained by him with a banker, (b) the cheque amount is in discharge of a debt or liability, and (c) the cheque is returned unpaid for insufficiency of funds or that the amount exceeds the arrangement made with the bank. Any dishonour falling within the four corners of the enacting provision would be punishable without much ado.
 
	 Section 138 is structured in two parts, the primary and the provisory. The contents of the proviso place conditions on the operation of the main provision, while it does not form a constituent of the crime itself, it modulates or regulates the crime in circumstances where,unless its provisions are complied with, the already committed crime remains impervious to prosecution. Section 142 employs the term "cause of action" as compliance with the three factors contained in the proviso are essential for the cognizance of the offence, even though they are not part of the action constituting the crime, therefore, so far as the offence itself, proviso has no role to play.
 
	The proviso that comprises the second part of the provision, the following would constitute "cause of action" referred to in sub-clause (b) above:
 
	(a) The complainant has presented the cheque for payment within the period of six months from the date of the issue thereof;
 
	(b) The complainant has demanded the payment of the cheque amount from the drawer by issuing a written notice within thirty days of receipt of information by him from the bank regarding the dishonour;
 
	(c) The drawer has failed to pay the cheque 	amount within fifteen days of the receipt of the 	notice.
 
        A proper understanding of the scheme underlying the provision would thus make it abundantly clear that while the offence is complete upon dishonour, prosecution for such offence is deferred till the time the cause of action for such prosecution accrues to the complainant. The proviso in that sense simply postpones the actual prosecution of the offender till such time he fails to pay the amount within the statutory period prescribed for such payment.
 
	The cause of action for prosecution will arise only when the period stipulated in the proviso elapses without payment. Ingredients of the offence have got to be distinguished from the conditions precedent for valid initiation of prosecution. The stipulations in the proviso must also be proved certainly before the offender can be successfully prosecuted. But in the strict sense they are not ingredients of the deemed offence under the body of Section 138 of the N.I. Act, though the said stipulations must also be proved to ensure and claim conviction. It is in this sense that it is said that the proviso does not make or unmake the offence under Section 138 of the NI Act. That is already done by the body of the sections.
 
	A three Judge Bench  of Hon'ble Supreme Court in Dashrath Rupsingh Rathod Vs. State of Maharashtra, 2014(9) SCC 129 in para 58 held as follows:
 
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 unsufficiency 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 thirty days of receipt of information by him from the bank regarding the dishonour of the cheque, and
 
	(c) if the drawer has failed to pay the cheque amount within fifteen days of receipt of such notice.
 
58.4. The facts constituting cause of action do not constitute the ingredients of the offence under Section 138 of the Act.
 
58.5. The proviso to section 138 simply postpones/defers institution of criminal proceedings and taking of cognizance by the court till such time cause of action in terms of clause (c) of the proviso accrues to the complainant.
 
58.6. Once the cause of action accrues to the complainant, the jurisdiction of the court to try the cause will be determined by reference to the place where the cheque is dishonoured.
 
	The ratio of Dashrath Rupsingh Rathod case was followed by a subsequent three Judge Bench in Vinay Kumar Shailendra Vs. Delhi High Court Legal Services Committee and another, 2014(10) SCC 708.
 
	But subsequent three Judge Bench in Yogendra Pratap Singh Vs. Savitri Pandey and another, 2014(10) SCC 713 was posed with the following question for consideration:
 
1.

1 (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,

1.2 (ii) If answer to question 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?.

The Supreme court held that a complaint filed before expiry of 15 days from the date on which the notice has been served on the 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.

Having answered the question no.1 in negative, the other question as to whether the complainant can 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, the Court held as follows:

"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".

Yogendra Pratap, however, does not notice the ratio of earlier three Judge Bench decision in Dashrath and Vinay case, where it was held that the offence is complete the moment the cheque is dishonoured, facts constituting cause of action do not constitute the ingredients of the offence, whereas in Yogendra Pratap, it was held that "no offence can be said to have been committed unless and until the period of 15 days, as prescribed under Section 138 proviso (c), has, in fact, elapsed". Thus, the observations made in Yogendra Pratap to that effect is obitre. However that would have no bearing on the ratio laid in Yogendra Pratap. The offence therefore, is committed the moment the cheque issued by the drawer bounces, but the cause of action for instituting the complaint is distinct and different from the offence. The complainant without having a cause would not be able to maintain the complaint though the said stipulations must also be proved to ensure and claim conviction. The commission of a crime is distinguishable from its prosecution. In other words, the four or five concomitants of the section have to be in existence for the initiation as well as the successful prosecution of the offence.

The principle of precedence should promptly and precisely be paraphrased. A coordinate Bench is bound to follow the previously published view; it is certainly competent to add to the precedent to make it logically and dialecticaly compelling. However, once a decision of a larger Bench has been delivered it is that decision which mandatorily has to be applied; whereas a coordinate Bench, in the event that it finds itself unable to agree with an existing ratio, is competent to recommend the precedent for reconsideration by referring the case to the Chief Justice for constitution of a larger Bench.

The next ground raised by the learned counsel for the applicant is that there is no proof that either notice was served or it was returned un-served/unclaimed and that there is no averment in the complaint about the same, therefore, there was no cause of action to prosecute the accused under Section 138 NI Act.

In CC Alavi Haji V. Palapetty Muhammed and another( 2007) 6 SCC 555, a three Judge Bench of the Supreme Court has conclusively decided this issue. It is held in this case that it is not necessary to aver in the complaint that notice was served upon the accused.

Section 27 General Clauses Act 1887, gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. However, NI Act does not require that notice should only be given by post. (Refer Pawan Kumar Ralli Vs. Maninder Singh Narula ,(2014) 15 SCC 245). Apex Court has already held that when a notice is sent by registered post and is returned with a postal endorsement ''refused' or ''not available in the house' or ''house locked' or ''shop closed' or ''addressee not in station', due service has to be presumed. [Vide Jagdish Singh Vs. Natthu Singh (1992) 1 SCC 647; State of M.P. Vs. Hiralal & Ors. (1996) 7 SCC 523 and V.Raja Kumari Vs. P.Subbarama Naidu & Anr. (2004) 8 SCC 74]. It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved.

The principle laid down in C.C. Alavi Haji was reiterated and reaffirmed by the Supreme Court in M/s Ajeet Seeds Ltd Vs. K. Gopala Krishnaiah, 2014 (12) SCC 685, wherein the judgement rendered by two Judge Bench in Shakti Travel and Tours V. State of Bihar and another (2002)9 SCC 415 taking a contrary view was overruled.

The point finally raised is regarding the computation of one month period prescribed under Section 142(b) N.I Act. In M/s Econ Antri Ltd Vs. M/s Rom Industries Ltd and another, ( 2014) 11 SCC 769, a three Judge Bench of the Apex Court was called upon to consider "whether for calculating the period of one month which is prescribed under Section 142(b), the period has to be reckoned by excluding the date on which the cause of action arose?"

The basic provision of law involved in referring order before the Bench was proviso (c) to Section 138 and 142(b) of NI Act. The Court approved the ratio in Saketh India Ltd and others Vs. India Securities Ltd, (1999) 3 SCC 1, wherein it was held that while calculating the period of one month, which is prescribed under Section 142(b) of NI Act, the period has to be reckoned by excluding the date on which the cause of action arose.

In Saketh cheques dated 15.3.1995 and 16.3.1995 issued by the accused therein bounced when presented for encashment. Notices were served on the accused on 29.9.1995. As per proviso (c) to Section 138 of the NI Act, the accused were required to make the payment of the said amount within 15 days of the receipt of the notice i.e on or before 14.10.1995. The accused failed to pay the amount. The cause of action, therefore, arose on 15.10.1995. According to the complainant for calculating one month's period contemplated under Section 142(b), the dated '15.10.1995', has to be excluded. The complaint filed on 15.11.1995 was, therefore, within time. According to the accused, however, the date on which the cause of action arose i.e 15.10.1995 has to be included in the period of limitation and thus the complaint was barred by time.

The Court referring to several English decisions on the point observed that the principle of excluding the day from which the period is to be reckoned is incorporated in Section 12(1) and (2) of the Limitation Act, 1963. This principle is also incorporated in Section 9 of the General Clauses Act, 1897. The Court went to on to observe that ordinarily in computing the time, the rule observed is to exclude the first day and to include the last. Following the said rule in the facts before it, the Court excluded the date '15.10.1995' on which the cause of action had arisen for counting the period of one month holding that the complaint was filed within the period of limitation. Para 20 and 25 of the report is as follows:

"20. As the Limitation Act is held to be not applicable to N.I Act, drawing parallel from Tarun Prasad Chatterjee where the Limitation Act was held not applicable, we are of the opinion that with the aid of Section 9 of the General Clauses Act, 1897, it can be safely concluded in the present case that while calculating the period of one month which is prescribed under Section 142(b) of the N.I Act, the period has to be reckoned by excluding the date on which the cause of action arose.

25. Having considered the question of law involved in this case in proper perspective, in light of relevant judgements, we are of the opinion that Saketh lays down the correct proposition of law. We hold that for the purpose of calculating the period of one month, which is prescribed under Section 142(b) of the N.I Act, the period has to be reckoned by excluding the date on which the cause of action arose. We hold that SIL Import USA does not lay down the correct law".

The points pressed by the learned counsel being purely factual cannot be gone into by this court. As to whether the plea that the cheque was presented beyond the statutory period cannot be considered at this stage for the reason that the bank refused to honour the cheque due to insufficient funds and not for the reason that the cheque was presented beyond the statutory period.

For the law and reasons stated hereinabove, the revision is dismissed. However, dismissal of the revision shall not preclude the revisionist from raising all the points herein above before the Magistrate concerned.

Date: 30.5.2016

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