Karnataka High Court
G. Ekantappa vs State Of Karnataka And Another on 9 September, 1996
Equivalent citations: 1997(1)ALT(CRI)688, [1998]93COMPCAS933(KAR), ILR1997KAR1014, 1997(2)KARLJ63
Author: B.N. Mallikarjuna
Bench: Bn Mallikarjuna
JUDGMENT B.N. Mallikarjuna, J.
1. The legality or the correctness of taking cognizance and issuing summons to the revision-petitioner on November 30, 1994, by the Munsiff and JMFC, Hadagali, District of Bellary in a criminal case instituted on a private complaint by the second respondent for an offence under section 138 of the Negotiable Instruments Act, 1881, is challenged in this revision petition.
2. The revision petitioner is the accused. The second respondent is the complainant and the first respondent is the State of Karnataka. Hereinafter I refer to the parties as they are described in the private complaint for the purpose of convenience.
3. A few facts relevant for the disposal of this revision may be stated thus :
It appears the accused had taken a hand loan of Rs. 30,000 from the complainant for his contract work on October 4, 1993, promising to repay him on demand. When the complainant demanded repayment of the amount, the accused issued a cheque bearing No. 124453 dated January 18, 1994, in favour of the complainant for a sum of Rs. 30,000 drawn on Bellary District Central Co-operative Bank, Harapanahalli branch. The complainant presented the cheque for encashment and on April 19, 1994, the cheque bounced with an endorsement "refer to drawer". Then again the complainant presented the cheque on July 15, 1994, and it bounced on the same day with an endorsement "refer to drawer". Therefore, the complainant sent a notice dated July 16, 1994, by registered post acknowledgment due requesting the accused to make payment within 15 days and that was served on the accused on July 19, 1994. The accused did not either reply or make payment within 15 days, and therefore, on September 2, 1994, the complaint was filed in the court for an offence under section 138 of the Negotiable Instruments Act.
4. The learned magistrate took cognizance of the offence, recorded the sworn statement of the complainant, marked the documents exhibits P-1 to P-4 and by the impugned order dated November 30, 1994, issued summons to the accused for appearance by January 4, 1995. This order is under challenge.
5. Learned counsel for the revision petitioner, the second respondent and the learned High Court Government Pleader for respondent No. 1 State, present.
6. Learned counsel for the accused contended that the sworn statement is recorded by the court with the assistance of the advocate, and, therefore, the proceedings are vitiated. Secondly, he contended that at the first instance on January 18, 1994, the complainant presented the cheque for encashment through his banker and that was returned to him on January 21, 1994, on the ground that there is insufficiency of funds. Therefore, the complainant issued a notice dated January 29, 1994, asking the accused to make payment within 15 days, that he sent a reply notice dated March 5, 1994, contending, inter alia, that his cheque book was stolen and the cheque in question is forged and he is not liable to make any payment. The complainant having kept quiet, presented the cheque for a second time in the month of July, 1994, and that being returned, sent a notice dated July 16, 1994, and thereafter he made this complaint. Since the complainant did not make any complaint within one month after the expiry of the period of 15 days after the dishonour for the first time, the cause of action that accrued stood vanished, and, therefore, the complaint filed after the cheque was dishonoured for the second time is not maintainable in law. In support of his arguments, he invited my attention to the decisions of the Kerala High Court in K. Chellakkannu Nadar v. Chenkal M. R. Simon [1994] 3 Crl. LJ 3515; [1995] 84 Comp Cas 439 and the unreported decision of a learned single judge of this court in D. Puttaswamy v. N. Ramakrishna (C.R.P. No. 146 of 1995, decided on 3rd April, 1995)
7. Learned counsel for the complainant argued that a cheque can be presented any number of times or within a period of six months within the date of its validity whichever is earlier in view of section 138(a) of the Negotiable Instruments Act, and the complaint could be filed on the basis of the last dishonour. What is necessary is that a notice under section 138(b) of the Act should precede such complaint. He relied on the decision of the learned single judge of the Andhra Pradesh High Court in Richard Samson Sherrat v. State of A.P. [1992] 2 Crimes 150; [1993] 78 Comp Cas 28 affirmed by the Division Bench of the same court in Syed Rasool and Sons v. Aildas and Company [1992] 3 Crl. LJ 4048; [1993] 78 Comp Cas 738 (AP).
8. In view of the rival contentions, the only point that would arise for consideration is whether the complaint filed after the cheque being dishonoured for the second time is maintainable in law having not filed any complaint after notice under section 138(b) after the cheque was returned for the first time.
9. Chapter XVII of the Negotiable Instruments Act consisting of sections 138 to 142 was re-introduced by section 4 of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (Act No. 66 of 1988), under a new nomenclature for the Chapter "of penalties in the case of dishonour of certain cheques for insufficiency of funds in the accounts".
10. By the amendment a new offence under section 138 of the Act is created. Suffice it to say that issuance of a post-dated cheque and its dishonour by itself would not constitute an offence under section 138 of the Act. Dishonour of a cheque would constitute an offence subject to certain events, namely :
(a) the cheque should have been presented 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 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 15 days of the receipt of the information by him from the bank regarding the return and lastly,
(c) the drawer of such cheque fails to make payment of the said amount to the payee or as the case may be to the holder in due course of the cheque within 15 days of the receipt of the said notice.
11. Section 142 of the Act imposed certain restrictions in taking cognizance of an offence under section 138 of the Act. The section starts with a non obstante clause and contemplates that :
(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 by the holder in due course of the cheque;
(b) such complaint is made within one month from the date on which the cause of action arises under clause (b) of the proviso to section 138 and
(c) no court inferior to that of Metropolitan Magistrate or Judicial Magistrate I Class shall try any offence punishable under section 138 of the Act.
12. Issuing a cheque and its dishonour, etc., basically gives rise to a civil action and it matures into an offence only on the happening of certain events enumerated in section 138(a) to (c). But for section 142 of the Negotiable Instruments Act, any magistrate could have taken cognizance of an offence under section 138 of the Act within three years from the date of commission of offence either on a private complaint or on a police report or upon information received from any person in view of sections 190, 468(2)(c) and item II of the First Schedule - "Classification of offences" - to the Code of Criminal Procedure, 1973. Section 142 of the Negotiable Instruments Act, 1881, imposes certain restrictions; it empowers only a metropolitan magistrate or a judicial magistrate of the first class to take cognizance of an offence under section 138 of the Act on a complaint in writing by the payee and if the complaint is made within 30 days from the 16th day after the receipt of notice under section 138(b) of the Act.
13. The expression "offence" is defined under clause (n) of section 2 of the Criminal Procedure Code, 1973, and according to the definition "offence" means any act or omission made punishable by any law for the time being in force and includes any act in respect of which a complaint may be made under section 20 of the Cattle Trespass Act, 1871. Turning to the facts of the present case, the act of issuing a cheque, its dishonour and omission to make payment of the amount despite notice under section 138(b) of the Act, matures into an offence on the 16th day after the service of notice and the offence would be continuing so long as the amount remains unpaid. Section 142 of the Act which does not constitute any ingredient of the offence imposed certain restrictions on taking cognizance of the offence.
14. Section 472 of the Criminal Procedure Code, 1973, contemplates that in the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues.
15. The expression "continuing offence" has come up for consideration before the Supreme Court time and again and the Supreme Court has consistently held that the expression "continuing offence" has not been defined in the Code, that the question whether a particular offence is an offence or not, must, therefore, necessarily depend upon the language of the statute which creates that offence, the nature of the offence and the purpose intended to be achieved by constituting the particular offence : Raja Bahadur Singh v. Provident Fund Inspector and G. Patel Volkart Ltd. v. Dundayya G. Hiremath .
16. An offence under section 138 of the Negotiable Instruments Act, 1881, is created by Central Act 66 of 1988. One of the objects in creating an offence under section 138 is to curb the enormous increase in the number of issuing cheques and their dishonour, perhaps in most of the cases on the ground of insufficiency of funds. Transactions basically civil in nature are made punishable under section 138 of the Negotiable Instruments Act, on the happening of certain events after once the cheque is issued and bounced. The mere issuance of a cheque or its bouncing for insufficiency of funds does not constitute an offence under section 138 of the Act. An offence is constituted only after a notice of demand under section 138(b) is served on the payee and on his failure to make payment within 15 days. Once there is failure, the offence continues till the amount remains unpaid. Section 142 only imposes certain restrictions in taking cognizance of the offence and nothing more. Therefore, an offence under section 138 of the Negotiable Instruments Act is in the nature of a continuing offence and as such the complaint based on second or subsequent dishonour of the cheque is certainly maintainable in law, notwithstanding the fact that the payee does not avail of the opportunity and files the complaint after the first dishonour and thereafter notice under section 138(b) of the Act being served on the drawer of the cheque.
17. In interpreting section 138 of the Negotiable Instruments Act, courts have held that repeated presentation of the cheque for encashment is permitted within six months or within the date of its validity, whichever is earlier. Therefore, every time the cheque is dishonoured within that period, the payee could issue notice to the drawer calling upon him to make payment with a threat of prosecution if he so desires and only when the drawer fails to make payment within fifteen days from the date of the receipt of that notice, it matures into an offence. Even in such circumstance, the payee may not choose to prosecute the drawer for one reason or the other or it may be for the reason that the drawer approaches him requesting to wait and present it after some time. In such circumstances, if the payee obliges the drawer and presents the cheque after some time and if the cheque were to bounce again for insufficiency of funds or for any reason that would again give rise to an action for the drawee to issue notice under section 138(b) calling upon the drawer to make payment and failure to make payment within 15 days gives rise to a fresh cause of action. It is for the payee to decide as to whether a prosecution for an offence under section 138 of the Act be initiated or not. But, it would not be correct to say that the moment the cheque is dishonoured and a notice has been issued calling upon the drawer to make payment and on his failure to make payment within 15 days, the cause of action would arise for initiating proceedings and if that opportunity is not availed of, the complainant cannot initiate criminal proceedings on the basis of the second or subsequent dishonour. What is required is that the cheque should have been presented within six months or within its validity as required under section 138(a) of the Act. Further, the complainant has to make out that a notice of demand was issued to the drawer within 15 days from the date the cheque was last returned for want of sufficient funds and the drawer has failed to make payment within 15 days from the date of receipt of that notice and the complaint should be within one month from that day.
18. There is no substance in the arguments that if a complaint is permitted on the subsequent refusal it may result in successive or repeated complaints and repeated prosecution and conviction. It is necessary to remember that there cannot be successive trial for the same offence and repeated convictions in view of article 20(2) of the Constitution of India and section 300 of the Criminal Procedure Code, 1973.
19. Learned counsel for the revision petitioner inviting my attention to the decision of the learned single judge of the Kerala High Court in K. Chellakkannu Nadar v. Chenkal M. R. Simon [1994] 3 Crl. LJ 3515; [1995] 84 Comp Cas 439 contended that a complaint on a second dishonour or subsequent dishonour is not maintainable. The learned judge observes that the right to present the cheque any number of times during the validity period is not the sole criterion to decide this question; once an offence is committed by the drawer of the cheque, subsequent offence cannot be fastened on him by using the same cheque. With great respect, I am not persuaded to agree with the said reasoning; the cause of action that once arose does not die the moment the complainant chooses not to file a complaint on the first dishonour. The right to file a complaint continues, but for the restriction imposed by section 142 of the Act. Therefore, when a complaint is made, it should be shown that the presentation of the cheque is within the time permitted under section 138(a) of the Act, it is preceded by a notice under section 138(b) and the drawer has failed to make payment within 15 days after the receipt of that notice and nothing more. The learned single judge of this High Court in an unreported case, Criminal Revision Petition No. 146 of 1995, while referring to the decision of the Division Bench of the Andhra Pradesh High Court observes that filing a complaint under section 138 read with section 142 of the Act can be done only once. There cannot be any quarrel over this proposition. Law does not permit successive complaints in respect of one and the same cheque and repeated convictions for offence based on the same cheque in view of section 300 of the Criminal Procedure Code, 1973, and article 20(2) of the Constitution of India. The Division Bench of the Andhra Pradesh High Court in Syed Rasool's case [1992] 3 Crl. LJ 4048; [1993] 78 Comp Cas 738 has held that a complaint on a second dishonour or subsequent dishonour is maintainable in law.
20. The learned single judge of the Andhra Pradesh High Court on March 12, 1992, in Richard Samson Sherrat v. State of A.P. [1992] 2 Crimes 150; [1993] 78 Comp Cas 738 has taken the view that a complaint on a second dishonour is maintainable disagreeing with the views expressed by the learned single judge of the Kerala High Court in K. Chellakkannu Nadar v. Chenkal M. R. Simon [1994] 3 Crl. LJ 3515; [1995] 84 Comp Cas 439. The decision of the learned single judge has been approved by the Division Bench of the same High Court on September 30, 1992, in Syed Rasool and Sons v. Aildas and Company [1992] 3 Crl. LJ 4048; [1993] 78 Comp Cas 738. A similar situation came up for consideration in Syed Rasool's case [1992] 3 Crl. LJ 4048; [1993] 78 Comp Cas 738 and the Division Bench considering the object and purport of sections 138 and 142 and the scheme of Chapter XVII of the Negotiable Instruments Act, observes thus (page 755) :
"The complainant in whose favour a cheque has been issued has got a right to file a complaint only once on the said cheque. He can file a complaint within one month of the date of cause of action. Cause of action is a bundle of facts. The party can take into account the final cause of action as the one to base his claim within the period of limitation and the final cause of action arises on account of dishonour alone. Thus, the complainant can file a complaint for offences under section 138 read with section 142 of the Act after the dishonouring of the cheque for the first time or he may choose to present the cheque at the request of the drawer within the said period of six months from the date of the cheque any number of times but the action to be taken by him by filing of complaint is only once and the period of limitation has to be counted from the date of last dishonour of the cheque. That means, the limitation period cannot be taken into consideration from the first date of dishonour and the last date of dishonour alone has to be taken into consideration for the purpose of filing a complaint. So we affirm the judgment of the learned single judge (Eswara Prasad J.) in Richard Samson Sherrat v. State of Andhra Pradesh [1992] 2 Crimes 150; [1993] 78 Comp Cas 28 (AP) holding that the second presentation of the cheque within the period of six months is valid. However, it is clarified that the complaint that has to be laid on the said cheque is only once and that too duly taking into account the limitation as prescribed basing on the result that has come out from the subsequent presentation of the cheque."
21. Further, it is held that the court could entertain a complaint for an offence under section 138 on the allegations in the complaint if it per se shows that there is compliance with the provisions of sections 138 and 142 of the Act. The court has to look into the main features, namely, the date of issuing of the cheque, the date of dishonouring of the cheque by the bank, the date of issuing a notice and the date of filing of the complaint in court. If these facts have been borne out from the allegations in the complaint, the court of competent jurisdiction is entitled to take cognizance of the same and the High Court is not entitled to entertain an application under section 482 of the Criminal Procedure Code, 1973.
22. In the instant case, the allegations made in the complaint satisfy these requirements and indicate that the presentation of the cheque is within the time permitted under section 138(a) of the Act, there is a notice under section 138(b) and that has been served on the drawer on July 19, 1994, and within 15 days thereafter, he has failed to make payment and the complaint is made within one month from that day. Therefore, the complaint made on a second dishonour is maintainable and the cognizance taken on that complaint is proper.
23. Learned counsel further submitted that the learned magistrate has taken the assistance of the advocate in recording the sworn statement of the complainant and, therefore, the whole proceedings are vitiated. I, therefore, find no merit in this argument. As I could see, the learned magistrate has recorded the sworn statement in a prescribed form in which the blanks are normally filled up by the Bench clerk/court officer. But a close look at the statement clearly makes out that the court has recorded the sworn statement of the complainant and has marked documents. Therefore, there is no merit in contending that the learned magistrate has taken the assistance of the advocate in recording the sworn statement and the whole proceedings are, therefore, vitiated.
24. In view of the foregoing reasons, I find no merit in either of the two contentions raised on behalf of the revision petitioner, and, therefore, the petition fails.
25. In the result, the revision is dismissed.