advocatemmmohan

My Photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

YOU ARE MOST WELCOMED TO MY LEGAL WORLD TO HAVE CLEAR YOUR CLOUDS OF DOUBTS AND TO HAVE A GOOD NIGHT WITH COMFORT -WAITING FOR A NEW SUNRISE WITH CONFIDENT. FOR FREE LEGAL OPINION ALSO, YOU CAN POST YOUR PROBLEMS TO THIS BLOG. IT WILL BE ANSWERED AS EARLY AS POSSIBLE.

Thursday, October 25, 2012

Negotiable Instruments Act, 1881; Ss. 138 and 142 with proviso to clause (b) of s. 142 inserted by Amendment Act, 2002: Dishonour of Cheque - Delay in filing complaint - Held: - Ex-facie complaint was barred by limitation - However, no application for condonation of delay was filed - Though power to condone the delay in filing complaint after expiry of period of limitation conferred upon the Court in terms of proviso to clause (b) of s. 142 but it could not have been given retrospective effect - Courts below erred in applying the proviso to the facts of the instant case - Direction to issue summons on the appellant, therefore, illegal and without jurisdiction, hence, nullity. Code of Civil Procedure, 1908; O5. Rr.9 (5) - Notice - Presumption of service - Discussed - Evidence Act, 1872 - s.114. General Clauses Act - Section 27 - Service of Notice - Ingredients of. Penal Code, 1860; s. 420 IPC - Applicability of - Dishonor of Cheque - Complaint - Amendment in complaint adding s.420 IPC therein - Held: The Court had no jurisdiction to allow amendment of complaint petition at a later stage adding s. 420 IPC in the complaint - Post-dated Cheques were issued for repayment of loan amount issued in the year 1996 when accounts were operative, however, presented to the Bank on January 10, 2007 - Even assuming that account was closed, subsequently, it cannot be said that appellant had an intention to cheat the complainant - Moreover, allegations made in the complaint petition, even if taken to be correct in its entirety, do not disclose commission of offence u/s. 420 IPC. Appellant had taken a financial loan from respondent No.1, which was allegedly paid by him vide two post-dated Cheques. Respondent No.1 claimed that when the Cheques were presented, they were returned by the Bank with the remarks that the account was not in operation. However, the appellant paid the amount of loan in cash. Respondent No.1 sent a notice to the appellant on January 17, 2001 and then filed a Complaint Petition against him on April 20, 2001. The complaint was sought to be amended for adding s. 420 IPC, which was allowed by the Court. Appellant filed an application for discharge, which was dismissed by the trial Court. Revision Petition was dismissed by the Sessions Court. Appellant challenged the order by filing a writ petition, which was dismissed by the High Court holding that the question as to whether the complaint is barred by limitation is a mixed question of law and fact. Even otherwise as a result 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; and that 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. Hence the present appeal. Appellant contended that the High Court committed a serious error in passing the impugned judgment insofar as it failed to take into consideration that the complaint petition was barred by limitation, which would be evident from the admitted facts; that the proviso appended to Clause (b) of Section 142 of the Negotiable Instruments Act being substantive in nature cannot be held to be retrospective in operation; that the allegations made in the complaint petition even if given face value and taken to be correct in their entirety, no case has been made out for taking cognizance under Section 420 of the Indian Penal Code; that 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. Respondent No. 1 submitted 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; and that 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. Allowing the appeal, the Court HELD: 1.1 Section 138 of the Negotiable Instruments Act provides a penal provision. The object of the Parliament in brining the same in the statute book is to create an atmosphere of faith and reliance in the banking system. (Para - 10) [690-D-E] 1.2 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. 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. (Paras - 15 & 11) [692-F; 690-E-F] 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 - referred to. 1.3 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 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. (Para - 19) [695-G-H; 696-A-B] Jindal Steel and Power Ltd. and Another v. Ashoka Alloy Steel Ltd. and Others (2006) 9 SCC 340 - referred to. 1.4 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. 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. (Para - 21) [697-A,D,E] 1.5 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. (Para - 22) [697-F-G] C.C. Alavi Haji v. Palapetty Muhammed and Another (2007) 6 SCC 555 - relied on. 1.6 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. 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 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. (Paras - 23 & 24) [698-F-G; 699-A-D] 1.7 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. (Para - 24) [699-F] 1.8 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 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. (Para - 26) Madishetti Bala Ramul (Dead) By LRs. v. Land Acquisition Officer (2007) 9 SCC 650 and Anil Kumar Goel v. Kishan Chand Kaura (2008) AIR SCW 295 - relied on. 2.1 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. (Para - 27) [700-G-H; 701-A-B] Devender Kumar Singla v. Baldev Krishan Singla (2005) 9 SCC 15 - relied on. 2.2 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, 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 that the provisions of Section 420 of the Indian Penal Code were not attracted. (Para - 29) [702-D-F] Suryalakshmi Cotton Mills Ltd. v. Rajvir Industries Ltd. and Ors., JT 2008 (1) SC 340 - referred to. 3. The Court had no jurisdiction to allow the amendment of the complaint petition at a later stage. (Para - 30) [702-G] Case Law Reference (2007) 4 SCC 70 Referred to Para - 14 (2007) 3 SCC 693 Referred to Para - 14 (2008) 8 SCALE 54 Referred to Para - 14 (2006) 9 SCC 340 Referred to Para - 20 (2007) 6 SCC 555 Relied on Para - 22 (2007) 9 SCC 650 Relied on Para - 25 (2008) AIR SCW 295 Relied on Para - 25 (2005) 9 SCC 15 Relied on Para - 27 JT 2008 (1) SC 340 Referred to Para - 28 Manish Mohan, Anita Mohan and Ugra Shankar Prasad for the Appellant. Santosh Paul, M.J. Paul, Arvind Gupta, Aanchal Jain, Manish Pitalc and Ravindra Keshavrao Adsure for the Respondents. 2008 AIR 3086, 2008(11 )SCR681 , , 2008(11 )SCALE42 , 2008(8 )JT637


                                                    REPORTABLE

               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




                            JUDGMENT

S.B. SINHA, J :


1.   Leave granted.
                                  2


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.
                                  6


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."
                                  13


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."
                                  15


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.
                                  16




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;
August 01, 2008

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.