J.P. Tiwari vs Union Of India & Ors.
2012 Latest Caselaw 7117 Del

           *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     Date of decision: 12th December, 2012

+                               WP(C) No.7724/2012

         J.P. TIWARI                                      ..... Petitioner
                          Through:      Mr. A.N. Tiwari, Adv.

                                     Versus

         UNION OF INDIA & ORS.                             ..... Respondents

                      Through:          Mr. Neeraj Chauhan & Mr. Ravjyot
                                        Singh, Advs. for UOI.
CORAM :-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. The petition seeks a declaration that Sections 138 and 142 of the

Negotiable Instruments Act, 1881 (NIA) are ultra vires the Constitution of

India.

2. The petitioner claims to be an exporter of readymade garments who

had purchased material therefor viz. cloth, thread, buttons etc. on credit

ranging from 60 to 90 days and had issued cheques with the understanding

that the same will be presented as and when export sale proceeds are

received. It is further the case of the petitioner, that owing to a fire in his

factory premises, the finished goods and material of the value of over `2/-

crores were destroyed; that the insurers of the said goods have failed to

compensate the said loss and which has led the petitioner to file a complaint

before the Consumer Fora; that owing to his business having come to a

standstill, his bankers also declared his account as an Non-Performing Asset

(NPA) and have initiated proceedings before the Debt Recovery Tribunal

against him; on the other hand suppliers aforesaid of material, to whom

undated cheques aforesaid had been given by the petitioner, filled up the

dates thereon and presented the cheques for payment and which were

dishonoured; that now several complaints of offence under Section 138

supra have been filed against him.

3. The petitioner contends that though Section 138 supra was enacted to

punish unscrupulous persons who purported to discharge their liability by

issuing cheques without really intending to do so, the provisions thereof are

being used against an honest person like the petitioner who owing to the

circumstances beyond his control is unable to pay. The counsel for the

petitioner has argued that the suppliers of material refuse to deliver goods on

credit without such undated cheques by way of security being given; that

though the petitioner at the time of issuance of the said cheques intended the

same to be honoured, as had been happening in the past, but was unable to

do so owing to the unforeseen fire in his factory.

4. On the basis of the aforesaid facts, the challenge to the vires of the

aforesaid legislative provisions is made on the ground that the same do not

take into consideration situations as aforesaid when the drawer of the cheque

due to circumstances beyond his control is unable to have the cheques

honoured. It is contended that Sections 138 and 142 of the NIA do not at all

make it obligatory on the part of the competent Courts of law to look into the

circumstances of the drawer of the cheque and entail punishment, the

moment the cheque is dishonoured, irrespective of the honesty of the drawer

thereof. It is further argued that it ought to be incumbent on the Magistrate

to ascertain as to why and under what circumstances the cheque is

dishonoured and the provisions making dishonor of the cheque an offence

irrespective of the reasons thereof is bad in law.

5. We are afraid, the grounds aforesaid do not constitute grounds for

declaring a legislative provision as bad. The Supreme Court in Goa Glass

Fibre Ltd. Vs. State of Goa (2010) 6 SCC 499 has held that a statute can be

invalidated or held unconstitutional on limited grounds viz. on the ground of

incompetence of the Legislature which enacts it or on the ground that it

breaches or violates any of the fundamental rights or other constitutional

rights and on no other grounds. No challenge to Sections 138 and 142 supra

is made on either of the two permissible grounds. Further, as held in

Rishabh Agro Industries Ltd. Vs. P.N.B. Capital Services Ltd. (2000) 5

SCC 515, Sushil Kumar Sharma Vs. Union of India (2005) 6 SCC 281 and

Nagar Palika Nigam Vs. Krishi Upaj Mandi Samiti (2008) 12 SCC 364, if

a provision of law is misused and subjected to abuse of process of law, it is

for the legislature to amend, modify or repeal it, if deemed necessary and the

legislative casus omissus cannot be supplied by judicial interpretative

process or justify invalidation or declaration of such law as ultra vires or

unconstitutional. Such abuse if any makes the „action‟ and not the „section‟

vulnerable.

6. We are therefore not returning any finding on the petitioner‟s

interpretation of the aforesaid legislative provisions though we find certain

observations in Pankaj Mehra Vs. State of Maharashtra (2000) 2 SCC 756

to the effect that the legislature, in Section 138 having used the words "the

drawer of such cheque fails to make the payment" as distinct from "the

drawer refuses to make payment", no such explanation would be sufficient

to extricate the drawer of the chqeue from the tentacles of the offence

contemplated in the Section.

7. We may also notice that a challenge to constitutionality of Chapter

XVII of the NIA, including Sections 138 and 142, on similar grounds as

raised in this petition has already been dismissed by the Division Bench of

this Court in Rajinder Steel Ltd. Vs. Union of India 82 (1999) DLT 963.

8. We are thus unable to find even a prima facie case for a challenge to

the legal provision being made out.

There is no merit in the petition. The same is dismissed.

No costs.

RAJIV SAHAI ENDLAW, J

CHIEF JUSTICE DECEMBER 12, 2012 „gsr‟