Gujarat High Court
Ibrahim Ahmed Valli Patel vs State Of Gujarat on 29 April, 2022
Author: Nikhil S. Kariel
Bench: Nikhil S. Kariel
R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION NO. 907 of 2020
With
CRIMINAL MISC.APPLICATION (FOR STAY) NO. 1 of 2022
In R/SPECIAL CRIMINAL APPLICATION NO. 907 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
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1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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IBRAHIM AHMED VALLI PATEL
Versus
STATE OF GUJARAT
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Appearance:
MR.ADITYA J PANDYA(6991) for the Applicant(s) No. 1,2
MR NK MAJMUDAR(430) for the Respondent(s) No. 2
NOTICE SERVED BY DS for the Respondent(s) No. 3,4
MS M D MEHTA, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
Date : 29/04/2022
ORAL JUDGMENT
1. Heard learned Advocate Mr. Aditya J. Pandya for the petitioners, learned APP Ms. M.D. Mehta for the respondent-State and learned Advocate Mr. N.K. Majmudar for the respondent No.2.
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2. Issue Rule. Learned Advocates for the respective respondents waive service of Rule.
3. With consent of learned Advocates for the parties, the present petition is taken up for final disposal.
4. By way of this petition the petitioners challenge the judgment and order dated 23.09.2019 passed by the learned Principal Sessions Judge, Bharuch in Criminal Revision Application No. 39 of 2019 confirming the order dated 13.02.2019 passed below Exh. 17 in Criminal Case No. 1050 of 2018 by the learned 2nd Additional Civil Judge and JMFC, Jambusar, District Bharuch.
5. Brief facts leading to filing of this petition are that, the respondent No.2 herein had preferred Criminal Complaint No. 1050 of 2018 under the provisions of Section 138 of the Negotiable Instruments Act, against the present petitioners as well as respondent Nos. 3 and 4 herein inter alia alleging that a cheque bearing No. 000248 dated 01.08.2018 for an amount of Rs. 1,01,00,000/- had been given by the petitioners and upon complainant presenting the same came to be returned with an endorsement "funds insufficient". Corresponding to the time when the cheque had been dishonoured or thereabouts, the Parliament had enacted the Negotiable Instruments (Amendment) Act, 2018, whereby a new Section namely Section 143-A came to be incorporated in the Negotiable Instruments Act, 1881 (for short "NI Act") whereby a provision for payment of interim compensation was envisaged.
5.1. It appears that upon such provision being incorporated in the NI Act, the respondent No.2 - original complainant preferred an application under Page 2 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 Exh. 17 in Criminal Complaint No. 1050 of 2018 inter alia requesting the concerned learned Magistrate to direct the opponents - accused to pay 20% amount of the dishonoured cheque amounting to Rs.20,20,000/-. Such application had been moved on 04.12.2018 and whereas learned 2 nd Additional Civil Judge and JMFC, vide order dated 13.02.2019 had been pleased to partly allow the said application and the accused persons including the present petitioners were directed to pay 15% amount of the dishonoured cheque jointly i.e. Rs. 15,15,000/- to the present complainant. The said order had been challenged by the accused including the present petitioners before the learned Session Court, Bharuch, by preferring Criminal Revision Application No. 39 of 2019 and whereas vide order dated 23.09.2019, the learned Principal Sessions Judge had been pleased to reject the revision application and confirmed the order passed by the learned 2 nd Additional Civil Judge and JMFC, Jambusar and whereas the original accused Nos. 1 and 2 i.e. present petitioners and original accused No.6 in Criminal Compliant No. 1050 of 2018 were directed to deposit 15% amount of the dishonoured cheque within eight weeks from the date of receipt of order concerned.
6. Learned Advocate Mr. Aditya Pandya for the petitioners - original accused challenges the orders passed by the Courts below, inter alia on the ground that while the Negotiable Instruments (Amendment) Act, 2018 came into effect from 01.09.2018, the amended Section 143A inter alia envisaging that the Court trying an offence under Section 138 of the NI Act, is empowered to grant interim compensation to the complainant and whereas according to learned Advocate Mr. Pandya since the relevant date would be the date when the cheque had been dishonoured i.e. the date of the offence, which is prior to the date of Amendment Act coming into force, therefore the learned Trial Court as well as the Revisional Court had Page 3 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 committed grave error in directing the petitioners to pay compensation to the respondent-complainant. Learned Advocate Mr. Pandya would elaborate his submissions by relying upon the decision of the Hon'ble Apex Court in case of G.J. Raja Vs. Tejraj Surana, reported in 2019 (9) SCC 469, whereby the Hon'ble Apex Court had inter alia observed that Section 143-A of the Act would have prospective applicability, more particularly according to learned Advocate, the Hon'ble Apex Court having stated that only in cases where offences were committed after introduction of Section 143-A, the accused would be required to pay interim compensation. Para Nos. 22, 23 and 24 of the said decision being the relevant paragraphs are reproduced hereinbelow for benefit.
"22. In our view, the applicability of Section 143A of the Act must, therefore, be held to be prospective in nature and confined to cases where offences were committed after the introduction of Section 143A, in order to force an accused to pay such interim compensation.
23. We must, however, advert to a decision of this Court in Surinder Singh Deswal and Ors. vs. Virender Gandhi, 2019 8 SCALE 445 where Section 148 of the Act which was also introduced by the same Amendment Act 20 of 2018 from 01.09.2018 was held by this Court to be retrospective in operation. As against Section 143A of the Act which applies at the trial stage that is even before the pronouncement of guilt or order of conviction, Section 148 of the Act applies at the appellate stage where the accused is already found guilty of the offence under Section 138 of the Act. It may be stated that there is no provision in Section 148 of the Act which is similar to Sub-Section (5) of Section 143A of the Act. However, as a matter of fact, no such provision akin to sub-section (5) of Section 143A was required as Sections 421 and 357 of the Code, which apply post-conviction, are adequate to take care of such requirements. In that sense said Section 148 depends upon the existing machinery and principles already in existence and does not create any fresh disability of the nature similar to that created by Section 143A of the Act. Therefore, the decision of Page 4 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 this Court in Surinder Singh Deswal stands on a different footing.
24. In the ultimate analysis, we hold Section 143A to be prospective in operation and that the provisions of said Section 143A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book. Consequently, the orders passed by the Trial Court as well as the High Court are required to be set aside. The money deposited by the Appellant, pursuant to the interim direction passed by this Court, shall be returned to the Appellant along with interest accrued thereon within two weeks from the date of this order."
6.1 Learned Advocate Mr. Pandya would submit that since Section 143-A of the Act has been declared as being prospective in nature, more particularly according to the Hon'ble Apex Court only in cases where the offences were committed after introduction of Section 143-A, would the accused be directed to pay interim compensation, according to learned Advocate, the said Section could not have been invoked in the instant case. Learned Advocate would submit that the relevant date to decide whether the amended Section 143-A would be applicable or not, would be the date of offence of each case and whereas according to learned Advocate Mr. Pandya, the date of offence would be the date when the cheque had been dishonoured and whereas in the instant case, according to learned Advocate, more particularly relying upon the complaint itself, the cheque was dishonoured whereas the same had been intimated vide a return memo dated 13.08.2018 and under such circumstances, according to learned Advocate, since the offence having been committed prior to the date on which the Amendment Act came into force, the petitioners could not have been directed by the learned Trial Court as well as the Revisional Court to pay interim compensation to the original complainant. In support of his submissions, learned Advocate Mr. Pandya has relied upon the decisions of Page 5 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 the Hon'ble Apex Court in cases of (1) Dashrath Rupsing Rathod Vs. State of Maharashtra and another reported in (2014) 9 SCC 129, (2) Vinay Kumar Shailendra Vs. Delhi High Court Legal Services Committee and Anr., reported in (2014) 10 SCC 708, and (3) Sandeep Kumar Bafna Vs. State of Maharashtra and Another, reported in (2014) 16 SCC 623.
6.2 Learned Advocate Mr. Pandya relying upon the decision of the Hon'ble Apex Court in case of Dashrath Rupsing Rathod (supra) would submit that the Hon'ble Apex Court, has inter alia observed that Section 138 of the NI Act envisages that the offence is committed no sooner the drawee bank returns the cheque unpaid. Learned Advocate would submit in this regard that as noticed hereinabove, the drawee bank had returned the cheque unpaid on the ground of insufficient funds, more particularly on 13.08.2018 i.e. before the date of Amendment Act coming into force, and therefore the Amendment Act would not have been applicable in the instant case and whereas the Courts below had committed an error in directing the petitioners to pay interim compensation to the respondent-complainant.
6.3 Learned Advocate Mr. Panday relying upon the decision of the Hon'ble Apex Court in Sandeep Kumar Bafna (supra) would submit that since the law on the issue has been clarified by a three Judge Bench of the Hon'ble Supreme Court, any decision of the Hon'ble Supreme Court, even though of a Bench of Co-ordinate strength, would not have any applicability. Learned Advocate would further submit that in Sandeep Kumar Bafna (supra), the Hon'ble Supreme Court had inter alia observed that a decision of a prior Bench, would hold the field, even if there is a later decision where a different view is taken.
Page 6 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 6.4 Learned Advocate Mr. Pandya would further submit that the
observations of the Hon'ble Apex Court in Dashrath Rupsing Rathod (supra), which is a decision by a three Judge Bench, has been reiterated in Vinay Kumar Shailendra (supra) by the Hon'ble Supreme Court. Learned Advocate would submit that the decisions by the Hon'ble Supreme Court being absolutely clear, more particularly since Section 143A is declared to be prospective in operation, therefore, the learned Courts below had committed an error, which may be rectified by this Court.
7. As against the submissions made by learned Advocate Mr. Pandya, learned Advocate Mr. N.K. Majmudar for the respondent No.2 has vehemently contested the same by submitting that the date of the offence insofar as the offence punishable under Section 138 of the NI Act, would not be the date on which the cheque had been dishonoured. Learned Advocate Mr. Majmudar would submit that dishonour of the cheque is only the main provision and while the main provision would state with regard to a cheque drawn by a person on an account maintained by him for discharge of any debt or other liability being dishonoured, but according to the learned Advocate, the offence would be completed only upon the requirements of proviso to the main provision i.e. proviso (a) (b) and (c) being completed, which proviso inter alia require that the cheque being presented within a period of 6 months from the date on which it was drawn being the first requirement and whereas after the cheque is dishonoured, the payee or the holder in due course would be required to a make demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within a period of 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid and the drawer of the cheque, upon receiving the notice, within a period of 15 days thereafter not making the payment to the payee or the holder in due course.
Page 7 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 Learned Advocate would submit that only upon the requirements mentioned in the provisos to Section 138 of the NI Act, being fulfilled, the offence said to have been taken place. According to the learned Advocate, the date of dishonour of the cheque would not be relevant date, rather the relevant date on which the offence is committed would be the day immediately after expiry of period of 15 days after the drawer of the cheque receives the notice by the payee or holder in due course about the cheque being dishonoured and asking him to make payment thereof and the drawer does not make the payment within the stipulated period. Learned Advocate in this regard would further submit that while the decision of the Hon'ble Apex Court in case of Dashrath Rupsing Rathod (supra), was on the issue of territorial jurisdiction, the aspect of when an offence under Section 138 of the NI Act, is committed has been decided by the Hon'ble Apex Court in case Yogendra Pratap Singh Vs. Savitri Pandey, reported in (2014) 10 SCC
713. Learned Advocate would submit that the Hon'ble Apex Court in case of Yogendra Pratap Singh (supra), has inter alia taken a view that mere issuance of a cheque and dishonour thereof would not constitute an offence by itself under Section 138 of the NI Act and whereas it has been held that for completion of an offence under Section 138 of the NI Act not only the satisfaction of the ingredients of offence set out in the main part of the provision is necessary but it is also imperative that all the three eventualities mentioned in clauses (a), (b) and (c) of the proviso are satisfied. Learned Advocate would submit that it is upon the three eventualities having been satisfied that the offnece under Section 138 of the NI Act can be stated to be committed. Learned Advocate would submit that in the instant case the dishonour of the cheque was intimated to the complainant vide bank return memo dated 13.08.2018 and whereas the complainant had thereafter caused to issue the notice dated 16.08.2018 upon the petitioners - accused and whereas the same was served upon the accused and the notice was received Page 8 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 by the accused vide registered post receipt dated 20.08.2018. Learned Advocate would submit that only upon a period of 15 days elapsing from 20.08.2018, within which period since the accused did not make payment of the cheque amount, could the offence be stated to be committed. Learned Advocate would submit that the period of 15 days expiring on 04.09.2018 whereas the Amendment Act having come into force on 01.09.2018, therefore the offence is committed after the date of the Amendment Act, and therefore the learned Advocate would submit that no error appears to have been committed by the learned Trial Court as well as the learned Sessions Court and hence, he would request that the impugned orders may not be interfered with by this Court.
8. Learned APP Ms. M.D. Mehta on behalf of the respondent-State would submit since the principal issue is a private dispute between the parties whereas the issue in the instant case is one which would have large scale implication, therefore learned APP has submitted that the arguments of learned Advocate Mr. Majmudar appear to be sound. Learned APP would submit that since the decision of the Hon'ble Apex Court in case of Dashrath Rupsing Rathod (supra) being a decision on the aspect of territorial jurisdiction i.e. with regard to competent court where a complaint under Section 138 of the NI Act could be filed, therefore the observations of the Hon'ble Apex Court were in the said context and whereas according to learned APP the aspect of when an offence, under Section 138 of the NI Act, is committed, was not an issue which was under consideration of the Hon'ble Apex Court in the said decision. Learned APP would further submit that the decision of Yogendra Pratap Singh (supra) appears to be with regard to the pointing issue. Learned APP relying upon the decision of the Hon'ble Apex Court in case of Yogendra Pratap Singh (supra) would submit that this Court may not interfere with the impugned orders.
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9. Heard learned Advocates for the respective parties who have not submitted anything further.
10. After hearing the learned Advocates and perusing the record the following admitted position emerges :
(1) That the accused had given a cheque valued at Rs.
10,100,000/- to the complainant being cheque No. 000248 dated 01.08.2018 and whereas upon the complainant i.e. the payee presenting the said cheque on 13.08.2018, the same had been returned by the drawee bank with an intimation on 13.08.2018 about funds being insufficient.
(2) The complainant - respondent No.2 has issued notice dated 16.08.2018 to be served upon all the accused persons through Registered Post AD and whereas the same had been received by all the accused including the petitioners herein on 20.08.2018.
(3) That period of 15 days during which the petitioners could have made payment of the cheque amount to the payee i.e. respondent No.2, expired on 04.09.2018.
(4) In the interregnum, the Parliament had enacted the Negotiable Instruments (Amendment) Act, 2018, and the same was published in the Official Gazette on 02.08.2018, wherein it is mentioned that the date of coming into force of the said Act, was the date, that may be notified by the Central Government in Official Gazette.
(5) Vide Notification dated 16.02.2018, the Central Government had notified the date of 01.09.2018 as the date on which the provision of the Act would come into force.
(6) The Hon'ble Apex Court in case of G.J. Raja (supra) has inter
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alia held that the provisions of Section 143-A are prospective in nature and whereas the rigors of the said Section would apply to offences which were committed after the introduction of Section 143A.
11. Having regard to the undisputed aspects mentioned hereinabove, at the outset one is required to appreciate the decision of the Hon'ble Apex Court in case of Dashrath Rupsing Rathod (supra) relied upon by the learned Advocate for the petitioners. Learned Advocate for the petitioners has inter alia referred to paragraph Nos. 17, 18 and 58 of the said decision, which being relevant paragraphs, the same are quoted below for benefit. At this stage, it would be relevant to mention that Para Nos. 17 and 18 are part of the main judgment whereas Para No.58 is from the supplementing view.
"17. The marginal note of Section 138 of the NI Act explicitly defines the offence as being the dishonour of cheques for insufficiency, etc., of funds in the account. Of course, the headings, captions or opening words of a piece of legislation are normally not strictly or comprehensively determinative of the sweep of the actual Section itself, but it does presage its intendment. See: Frick India Ltd. v. Union of India (1990) 1 SCC 400 and Forage & Co. v. Municipal Corporation of Greater Bombay (1999) 8 SCC 577. Accordingly, unless the provisions of the Section clearly point to the contrary, the offence is concerned with the dishonour of a cheque; and in the conundrum before us the body of this provision speaks in the same timbre since it refers to a cheque being "returned by the bank unpaid". None of the provisions of the IPC have been rendered nugatory by Section 138 of the NI Act and both operate on their own. It is trite that mens rea is the quintessential of every crime. The objective of Parliament was to strengthen the use of cheques, distinct from other negotiable instruments, as mercantile tender and therefore it became essential for the Section 138 NI Act offence to be freed from the requirement of proving mens rea. This has been achieved by deeming the commission of an offence de hors mens rea not only under Section 138 but also by virtue of the succeeding two Sections. Section 139 carves out the presumption that the holder of a cheque has received it for the discharge of any liability. Section 140 clarifies that it will not be available as a Page 11 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 defence to the drawer that he had no reason to believe, when he issued the cheque, that it would be dishonoured. Section 138 unequivocally states that the offence is committed no sooner the drawee bank returns the cheque unpaid.
18. Section 138 NI Act is structured in two parts - the primary and the provisory. It must be kept in mind that the Legislature does not ordain with one hand and immediately negate it with the other. The proviso often carves out a minor detraction or diminution of the main provision of which it is an appendix or addendum or auxiliary. Black Law Dictionary states in the context of a proviso that it is -
"[a] limitation or exception to a grant made or authority conferred, the effect of which is to declare that the one shall not operate, or the other be exercised, unless in the case provided.
A clause or part of a clause in a statute, the office of which is either to except something from the enacting clause, or to qualify or restrain its generality, or to exclude some possible ground of misinterpretation of its extent."
It should also be kept in perspective that a proviso or a condition are synonymous. In our perception in the case in hand the contents of the proviso place conditions on the operation of the main provision, while it does form (sic not) 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. The proviso to Section 138 of the NI Act features three factors which are additionally required for prosecution to be successful. In this aspect Section 142correctly 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. To this extent we respectfully concur with Bhaskaran in that the concatenation of all these concomitants, constituents or ingredients of Section 138 NI Act, is essential for the successful initiation or launch of the prosecution. We, however, are of the view that so far as the offence itself the proviso has no role to play. Accordingly a reading of Section 138 NI Act in conjunction with Section 177 CrPC leaves no manner of doubt that the return of the cheque by the drawee bank alone constitutes the Page 12 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 commission of the offence and indicates the place where the offence is committed.
XXX XXX XXX
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 insufficiency 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 proviso accrues to the complainant.
58.6 Once the cause of action accrues to the complainant, the jurisdiction of the Court to try the case will be determined by reference to the place where the cheque is dishonoured.
Page 13 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 58.7 The general rule stipulated under Section 177 of Cr.P.C applies to cases under Section 138 of the Negotiable Instruments Act. Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the Court within whose jurisdiction the dishonour takes place except in situations where the offence of dishonour of the cheque punishable under Section 138 is committed along with other offences in a single transaction within the meaning of Section 220(1) read withSection 184 of the Code of Criminal Procedure or is covered by the provisions of Section 182(1) read with Sections 184 and 220 thereof."
12. Plain reading of Para Nos. 17 and 18 of the decision in Dashrath Rupsing Rathod (supra), would make it clear that while the Hon'ble Apex Court had observed with regard to Section 138 of the Negotiable Instruments Act unequivocally stating that the offence is committed no sooner the drawee bank returns the cheque unpaid and whereas the Hon'ble Apex Court further holds that the proviso to Section 138 of the Negotiable Instruments Act features three factors which are additionally required for prosecution to be successful and whereas according to the Hon'ble Apex Court Section 142 correctly employs the term cause of action as compliance with the three factors contain in the proviso which are essential for cognizance of the offence, and whereas according to the Hon'ble Apex Court said ingredients are not part of the action constituting the crime. Having observed as above, it would be relevant to note that the Hon'ble Apex Court holds that reading of Section 138 of the Negotiable Instruments Act in conjunction with Section 177 of the Cr.P.C. leaves no manner of doubt that the return of the cheque by the drawee bank alone constitutes the commission of the offence and indicates the place where the offence is committed. In the considered and humble opinion of this Court, the observations of the Hon'ble Apex Court with regard to Section 138 i.e. when an offence is stated to be committed under Section 138 of the Page 14 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 Negotiable Instruments Act, have to be read in context of the issue which was being considered by the Hon'ble Apex Court, more particularly as observed by the Hon'ble Apex Court, with regard to the place where the offence was committed. The Hon'ble Apex Court at Para 19, inter alia observed that the situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located. In the considered opinion of this Court, the observations of the Hon'ble Apex Court with regard to offence under Section 138 of the Negotiable Instruments Act, were in relation to reaching the conclusion as to where the judicial inquiry and trial of the offence be held and it is in this context the Hon'ble Apex Court has observed that the offence under Section 138 is committed no sooner the drawee bank returns the cheque unpaid and whereas ultimately it is the place where the drawee bank is located, had been decided as the venue of the judicial inquiry and trial of offence.
13. Furthermore, in the supplementing view as found in Para No. 58 as reproduced hereinabove, the Hon'ble Apex Court has inter alia observed that an offence under Section 138 of the NI Act, 1881 is committed no sooner a cheque drawn by an accused is returned unpaid. The Hon'ble Apex Court has further observed that cognizance of any such offence is however forbidden under Section 142 of the NI Act, except a complaint in writing by the payee or holder in due course. The Hon'ble Apex Court has insofar as the proviso (a) (b) and (c) to Section 138 of the NI Act, inter alia observed that the same are the requirements for the complainant to make out a cause of action for filing of a complaint. The Hon'ble Apex Court has also distinguished between facts constituting cause of action and not constituting the ingredients of offence under Section 138 of the NI Act. The Hon'ble Apex Court has also observed that proviso to Section 138 of the NI Act simply postpones/defers institution of criminal proceedings and taking of Page 15 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 cognizance by the court till such time cause of action in terms of clause (c) of the proviso accrues to the complainant. What would be most relevant to state here is the observations of the Hon'ble Apex Court at Para 58.6 of the conclusion, where the Hon'ble Apex Court has inter alia held that once the cause of action accrues to the complainant, the jurisdiction of the court to try the case will be determined by reference to the place where the cheque is dishonoured.
14. In this regard before proceeding further, it would be expedient to refer to the observations of the Hon'ble Apex Court and paragraph No.1 of the decision where the Hon'ble Apex Court has laid down the extent and scope of the issue which was under consideration of the Hon'ble Apex Court. The Hon'ble Apex Court at Para No.1 has stated that "...These Appeals raise a legal nodus of substantial public importance pertaining to court's territorial jurisdiction concerning criminal complaints filed under Chapter XVII of the Negotiable Instruments Act, 1881...". In the considered opinion of this Court, the observations of the Hon'ble Apex Court were in context of the issue which was considered by the Hon'ble Apex Court in the said decision.
15. It would be pertinent to mention here that the issue before the Hon'ble Apex Court, was with regard to the diverse views take by the Hon'ble Apex Court in case of K. Bhaskaran v. Sankaran Vaidhyan Balan, reported in (1999) 7 SCC 510 and in case of Harman Electronics (P) Ltd. and Anr. Vs. M/s. National Panasonic India Limited, reported in (2009) 1 SCC 720. That the issue which was being considered by the Hon'ble Apex Court, was the territorial jurisdiction aspect, with regard to filing of a complaint under Section 138 of the NI Act and whereas it is in such context Page 16 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 the Hon'ble Apex Court has inter alia observed that Section 138 unequivocally states that the offence is committed no sooner the drawee bank returns the cheque unpaid.
16. At this stage it would be relevant to refer to the decision of the Hon'ble Apex Court in case of Yogendra Pratap Singh (supra). In the said decision, the Hon'ble Apex Court was dealing with the question as regards when could cognizance of offence punishable under Section 138 of the NI Act be taken. It appears that initially two questions were formulated at Para 1.1. and 1.2 which are reproduced for benefit.
"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 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?"
17. It appears that since two Judge Bench of the Hon'ble Apex Court noticed the conflict between the two decisions (1) Narsingh Das Tapadia v. Goverdhan Das Partani and Anr.; [(2000) 7 SCC 183] and (2) Sarav Investment & Financial Consultancy Private Limited and Anr. v. Llyods Register of Shipping Indian Office Staff Provident Fund and Anr.; [(2007) 14 SCC 753] had referred the matter to the questions for consideration by three Judge Bench. It would be further pertinent to mention here that the Page 17 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 Hon'ble Apex Court in the said decision, has inter alia observed at Para 30 as under .
"30. Section 138 of the NI Act comprises of the main provision which defines the ingredients of the offence and the punishment that would follow in the event of such an offence having been committed. Appended to this Section is also a proviso which has three clauses, viz., (a), (b) and (c). The offence under Section 138 is made effective only on fulfillment of the eventualities contained in clauses (a), (b) and (c) of the proviso. For completion of an offence under Section 138 of the NI Act not only the satisfaction of the ingredients of offence set out in the main part of the provision is necessary but it is also imperative that all the three eventualities mentioned in clauses (a), (b) and (c) of the proviso are satisfied. Mere issuance of a cheque and dishonour thereof would not constitute an offence by itself under Section 138."
17.2 The Hon'ble Apex Court at Para Nos. 35 and 36 has observed as thus:
"35. Can an offence under Section 138 of the NI 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 NI Act unless the period of 15 days has elapsed. Any 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 NI 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 Page 18 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 complaint filed under Section 138 of the NI 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. "36. 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 toSection 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 NI 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 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 NI Act, as noted in the judgment of this Court in Kusum Ingots & Alloys Ltd. 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 NI Act."
18. It would be relevant to observe here that the Hon'ble Apex Court in the above decision of Yogendra Pratap Singh (supra) has clearly observed at Para 30 as noted hereinabove, that the main provision of Section 138 of the Page 19 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 NI Act comprises the ingredients of the offence and the punishment which would follow and whereas proviso (a), (b) and (c) are the eventualities upon fulfillment of which an offence under Section 138 of the NI Act is made effective.
19. It would further important to note here that the Hon'ble Apex Court has at Para 36, reiterated the view as taken in M/s. Kusum Ingots & Alloys Ltd. Vs. Pennar Peterson Securities Ltd. [(2000) 2 SCC 745], in the case of Yogendra Pratap Singh (supra), that all the five essential features of Section 138 of the Negotiable Instruments Act as noted in the said judgment, must be satisfied for a complaint to be filed under Section 138.
20. What would be important to note in the present context is that the observations of the Hon'ble Apex Court that "If the period prescribed in clause (c) of the proviso to Section 138 has got expired, there is no commission of an offence nor accrual of cause of action for filing of complaint under Section 138 of the NI Act.
(emphasis supplied) Thus, in a case where the Hon'ble Apex Court had been called upon to decide whether the learned Magistrate could take cognizance of an offence punishable under Section 138 of the Negotiable Instruments Act on the basis of a complaint filed before expiry of 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, the Hon'ble Apex Court has inter alia laid down that if the period prescribed of 15 days in clause (c) of proviso to Section 138 has not expired, then there is no commission of offence and consequently there is no cause of action accrued for filing of complaint.
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21. It would be relevant to state here that clause (c) of Section 138 is the last of the five ingredients essential for the offence to have stated to be committed. The five ingredients as noted at Para 31 in case of Yogendra Pratap Singh (supra), quoting from the decision of M/s. Kusum Ingots & Alloys Ltd. (supra), the Hon'ble Apex Court has held that the five ingredients required for commission of offence would be, (i) that a cheque is drawn on an account maintained by a person in a bank for payment of amount of money to another person from that account for the discharge of any debt or other liability, (ii) the said cheque had been presented to the bank within a period of six months from the date on which it is drawn, (iii) the cheque is returned by the bank unpaid either because of insufficient funds in the account or it exceeds the amount as per an arrangement with the Bank, (iv) the payee or the holder in due course of the cheque makes demand for payment of the amount of money by giving a notice in writing, to the drawer of cheque, within 15 days of receipt of information by him from the bank regarding the return of the cheque and (v) the drawer of the cheque fails to make payment of the said amount of money to the payee or the holder in due course within 15 days of the receipt of the said notice.
22. Proviso (c) of Section 138 inter alia corresponds with the Condition No. (v) referred to hereinabove and whereas as explained by the Hon'ble Apex Court it is only upon the last condition being fulfilled that the offence is stated to be committed. To put in other words, only upon the drawer of the cheque failing to make payment of the amount of money to the payee or holder in due course within 15 days of the receipt of the notice that the offence committed. Thus, the offence could be stated to be committed on the day after the 15th day when the drawer of the cheque receives notice by the payee or holder in due course and yet does not make payment.
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23. At this stage, it would be relevant to mention that while the Hon'ble Apex Court in the case of Dashrath Rupsing Rathod (supra) was considering an issue with regard to the Court having jurisdiction to try the offence, on the the order hand in Yogendra Pratap Singh (supra), the Hon'ble Apex Court was considering a question as to whether the learned Magistrate could take cognizance of an offence under Section 138 of the NI Act, if the complaint is filed by the complainant before expiry of the period of 15 days from the date of receipt of the notice under proviso (c) to Section 138 of the NI Act. Considering the law laid down by the Hon'ble Apex Court, it appears that in Dashrath Rupsing Rathod (supra), the Hon'ble Apex Court had held that the place where the drawee bank is located would be the place where the offence would be tried, since the offence under Section 138 of the NI Act is committed upon the cheque being dishonoured. That the inquiry by the Hon'ble Apex Court was into the aspect of territorial jurisdiction of a Court to try an offence under Section 138 of the NI Act and it is in context of the inquiry that the observations have been made. On the other hand, in Yogendra Pratap Singh (supra), the Hon'ble Apex Court was considering the aspect of cognizance being taken by the learned Magistrate of an offence under Section 138 of the NI Act. While the term 'cognizance' has not been defined either under the NI Act or the Code of Criminal Procedure, whereas the Hon'ble Apex Court in the case of Subramaniam Swamy Vs. Manmohan Singh [ 2012 (3) SCC 64] has succinctly explained the meaning of the term 'cognizance'. According to the Hon'ble Apex Court, ..."In legal parlance cognizance is "taking judicial notice by the court of law, possessing jurisdiction, on a cause or a matter presented before it so as to decide whether there is any basis for initiating proceedings and determination of the cause or matter judicially...."" In the present context, taking cognizance would mean the learned Magistrate taking judicial notice of the complaint as to whether there Page 22 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 is any basis for initiating proceedings against the accused. It is in this context that the Hon'ble Apex Court in Yogendra Pratap Singh (supra) had laid down the law that only upon the period of 15 days after issuance of notice stipulated under proviso (c) to Section 138 of the NI Act is over, and the drawer of the cheque not making payment that the offence under Section 138 of the NI Act would be committed and the Magistrate could not take cognizance of a complaint filed prior to the period of 15 days in proviso (c) to Section 138 of the NI Act. Thus, the law laid down in Yogendra Pratap Singh (supra) was on the substantive aspect of the provision in question. Having regard to the same, the law laid down by the Hon'ble Apex Court in Yogendra Pratap Singh (supra), which is issued on substantive interpretation and explanation of Section 138 of the NI Act and the proviso thereto would be relevant for the purpose of determining when an offence under Section 138 of the NI Act is committed as against the law laid down in Dashrath Rupsing Rathod (supra), since the decision was with regard to territorial jurisdiction to try offence under Section 138 of the NI Act.
24. Insofar as the submissions made by learned Advocates for the parties, more particularly submission of the learned Advocate for the petitioners relying upon the decision of the Hon'ble Apex Court in case of Sandeep Kumar Bafana (supra) that the decision in Dashrath Rupsing Rathod (supra) being the earlier decision, would be the one which would hold the field, it is required to be noted that the said recourse is to be resorted to when two or more mutual irreconcilable decisions of the Hon'ble Apex Court are cited at the bar. In the instant case, in the considered opinion of this Court, judgments of the Hon'ble Apex Court in Dashrath Rupsing Rathod (supra) and in Yogendra Pratap Singh (supra) are not mutually irreconcilable. While it is true that Yogendra Pratap Singh (supra) being the later decision, had not referred to decision of the Hon'ble Apex Court in Dashrath Rupsing Page 23 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 Rathod (supra), but then what would be required to be noted at this stage is that while the case of Dashrath Rupsing Rathod (supra) had been decided by the Hon'ble Apex Court on 01.08.2014 and case of Yogendra Pratap Singh (supra) had been decided on 19.09.2014, thus, both the decisions are approximately about the same time.
25. It would be further relevant to mention that it is by now a well settled principle of law that a decision has to be read in the context of the issue which was being considered by the Court concerned and whereas it would be the ratio of the decision which would be required to be followed and not the entire judgment as it is. It would further be relevant to mention that observations of the Court in a judgment cannot be read divorced from the context in which such observations have been made. In this regard, observations of the Hon'ble Apex Court in the case of M. Siddiq Vs. Suresh Das, reported in (2019) 18 SCC 631 would be relevant . Para Nos, 24, 25, 26, 27, and 28 of the said decision being relevant for the present purpose, the same are reproduced hereinbelow.
"24. Before we enter into the submissions advanced by the learned counsel for the parties it is relevant to notice certain established principle on reading of a judgment of the Court. The focal point in the present case being Constitution Bench judgment in Dr. M. Ismail Faruqui & Ors. vs. Union of India & Ors. reported in (1994) 6 SCC 360. We have to find out the context of observations made in the judgment which according to the appellant are questionable and to decide whether the said observations furnish any ground for reconsideration of the Constitution Bench judgment. The most celebrated principle on reading of a judgment of a Court of law which has been approved time and again by this Court is the statement by Lord Halsbury in Quinn v. Leathem, where following was laid down:Page 24 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022
R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 "...before discussing the case of Allen v. Flood (1898) AC 1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but are governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all."
25. The following words of Lord Denning in the matter of applying precedents have become locus classicus:
"Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo, J. ) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.
* * * Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path of justice clear of obstructions which could impede it."
The above passage has been quoted with approval by this Court in Sarva Shramik Sanghatana (KV), Mumbai vs. State of Maharashtra and others, (2008) 1 SCC 494.
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26. In the Constitution Bench judgment in Islamic Academy of Education and another v. State of Karnataka and others, (2003) 6 SCC 697, Chief Justice V.N. Khare speaking for majority held:
"2....The ratio decidendi of a Judgment has to be found out only on reading the entire Judgment. In fact the ratio of the judgment is what is set out in the judgment itself. The answer to the question would necessarily have to be read in the context of what is set out in the judgment and not in isolation. In case of any doubt as regards any observations, reasons and principles, the other part of the judgment has to be looked into. By reading a line here and there from, the judgment, one cannot find out the entire ratio decidendi of the judgment. We, therefore, while giving our clarifications, are deposed to look into other parts of the Judgment other than those portions which may be relied upon."
27. Justice S.B. Sinha, J. in his concurring opinion has reiterated the principles of interpretation of a judgment in paragraphs 139 to 146. Following has been held in paragraphs 139146:
Interpretation of a Judgment
139. A judgment, it is trite, is not to be read as a statute.
The ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal. [See Executive Engineer, Dhenkanal Minor Irrigation Division v. N.C. Budharaj [2001] 2 SCC 721].
140. In Padma Sundara Rao v. State of T.N.,(2002) 3 SCC 533, it is stated: (SCC p. 540 paragraph 9) Page 26 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 "9...There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington v. British Railways Board (1972) 2 WLR 537 [Sub nom British Railways Board v. Herrington, (1972) 1 All ER 749.
Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases." [See also Haryana Financial Corporation v. Jagadamba Oil Mills (2002 3 SCC 496]
141. In General Electric Co. v. Renusagar Power Co., (1987) 4 SCC 137, it was held: (SCC p.157, paragraph
20) "20....As often enough pointed out by us, words and expressions used in a judgment are not to be construed in the same manner as statutes or as words and expressions defined in statutes. We do not have any doubt that when the words "adjudication of the merits of the controversy in the suit" were used by this Court in State of U.P. v. Janki Saran Kailash Chandra [1974] 1 SCR 31, the words were not used to take in every adjudication which brought to an end the proceeding before the court in whatever manner but were meant to cover only such adjudication as touched upon the real dispute between the parties which gave rise to the action. Objections to adjudication of the disputes between the parties, on whatever ground are in truth not aids to the progress of the suit but hurdles to such progress. Adjudication of such objections cannot be termed as adjudication of the merits of the controversy in the suit. As we said earlier, a broad view has to be taken of the principles involved and narrow and technical interpretation which tends to defeat the object of the legislation must be avoided."
142. In Rajeshwar Prasad Mishra v. The State of West, Bengal, AIR 1965 SC 1887, it was held:
Page 27 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 "Article 141 empowers the Supreme Court to declare the law and enact it. Hence the observation of the Supreme Court should not be read as statutory enactments. It is also well known that ratio of a decision is the reasons assigned therein." (See also Amar Nath Om Prakash and Ors. v. State of Punjab[1985] 1 SCC 345 and Hameed Joharan v. Abdul Salam, 2001 (7) SCC 573).
143. It will not, therefore, be correct to contend, as has been contended by Mr. Nariman, that answers to the questions would be the ratio to a judgment. The answers to the questions are merely conclusions. They have to be interpreted, in a case of doubt or dispute with the reasons assigned in support thereof in the body of the judgment, where for, it would be essential to read the other paragraphs of the judgment also. It is also permissible for this purpose (albeit only in certain cases and if there exist strong and cogent reasons) to look to the pleadings of the parties.
144. In Keshav Chandra Joshi v. Union of India, 1992 Supp (1) SCC 272, this Court when faced with difficulties where specific guidelines had been laid down for determination of seniority in Direct Recruits Class II Engineering Officers' Association v. State of Maharashtra, (1990) 2 SCC 715, held that the conclusions have to be read along with the discussions and the reasons given in the body of the judgment.
145. It is further trite that a decision is an authority for what it decides and not what can be logically deduced therefrom. [See Union of India v. Chajju Ram, (2003) 5 SC C 568.
146. The judgment of this Court in T.M.A. Pai Foundations, (2002) 8 SCC 481, will, therefore, have to be construed or to be interpreted on the aforementioned principles, The Court cannot read some sentences from here and there to find out the intent and purport of the decision by not only considering what has been said Page 28 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 therein but the text and context in which it was said. For the said purpose the Court may also consider the constitutional or relevant, statutory provisions visavis its earlier decisions on which reliance has been placed."
28. Justice Arijit Pasayat, J. speaking for the Court in Commissioner of Central Excise, Delhi vs. Allied Airconditioning Corporation (Regd.), (2006) 7 SCC 735, held that the judgment should be understood in the light of facts of the case and no more should be read into it than what it actually says. In paragraph 8 following has been laid down:
"8.....A judgment should be understood in the light of facts of the case and no more should be read into it than what it actually says. It is neither desirable nor permissible to pick out a word or a sentence from the judgment divorced from the context of the question under consideration and treat it to be complete law decided by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. (See Mehboob Dawood Shaikh v. State of Maharashtra.)"
26. The law laid down by the Hon'ble Apex Court as referred to in the decision of M. Siddiq (supra), more particularly earlier decisions of the Hon'ble Apex Court are referred to and whereas the law in this regard has been explained in detail. That it could be stated that a case is an authority for what it actually decides and whereas the case should not be quoted for a proposition that may seem to follow logically from the same. Ratio of a judgment is what is set out in the judgment itself and whereas the observations in a judgment would necessarily have to be read in context of what is set out in the judgment and not in isolation by reading a line here and there from the judgment, the entire ratio decidendi of a judgment cannot be found out. A sentence or observation from a decision cannot be read in isolation and whereas the intent and purport of a decision has to be Page 29 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 judged not only from the text of the judgment but also in the context of which the observations had been made. The Hon'Apex Court has further observed that a judgment should be understood in the light of the facts of the case and whereas it would not be desirable or permissible to pick out a word or a sentence from the judgment divorced from the context of the question under consideration and treat it to be complete law by the Hon'ble Apex Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were raised before the Court.
Having regard to the law laid down by the Hon'ble Apex Court, more particularly considering the same in context of the submissions of the learned Advocates for the parties, it appears that the law laid down by the Hon'ble Apex Court in Dashrath Rupsing Rathod (supra) was in light of the question being considered by the Hon'ble Apex Court i.e. the Hon'ble Apex Court was deciding an aspect with regard to territorial jurisdiction of a Court in a complaint filed under Section 138 of the Negotiable Instruments Act, 1881. While it is true that the Hon'ble Apex Court has inter alia observed that Section 138 unequivocally states that offence is committed no sooner the drawee bank returns the cheque unpaid, but at the same time, reference also would be required to be made to the observations of the Hon'ble Apex Court in Para 21 of the decision which reads thus :
"21. The interpretation of Section 138 of the NI Act which commends itself to us is that the offence contemplated therein stands committed on the dishonour of the cheque, and accordingly the JMFC at the place where this occurs is ordinarily where the Complaint must be filed, entertained and tried. The cognizance of the crime by the JMFC at that place however, can be taken only when the concomitants or constituents contemplated by the Section concatenate with each other. We clarify that the place of the issuance or Page 30 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 delivery of the statutory notice or where the Complainant chooses to present the cheque for encashment by his bank are not relevant for purposes of territorial jurisdiction of the Complaints even though non-compliance thereof will inexorably lead to the dismissal of the complaint. It cannot be contested that considerable confusion prevails on the interpretation of Section 138 in particular and Chapter XVII in general of the NI Act. The vindication of this view is duly manifested by the decisions and conclusion arrived at by the High Courts even in the few cases that we shall decide by this Judgment. We clarify that the Complainant is statutorily bound to comply with Section 177 etc. of the CrPC and therefore the place or situs where the Section 138 Complaint is to be filed is not of his choosing. The territorial jurisdiction is restricted to the Court within whose local jurisdiction the offence was committed, which in the present context is where the cheque is dishonoured by the bank on which it is drawn."
27. A plain reading of the Para 21 of the said decision leads to a very clear conclusion that the observations by the Hon'ble Apex Court with regard to offence being committed upon the cheque being dishonoured, is in context of the question that had arisen for consideration of the Hon'ble Apex Court. The observations at Para 21 quoted hereinabove makes it abundantly clear that the Hon'ble Court had made all the observations in context of deciding where a complaint under Section 138 of the Negotiable Instruments Act could be filed. In the considered opinion of this Court, all the observations of the Hon'ble Apex Court including observations at Para 58 quoted hereinabove, have to be read in context of the question which was under consideration of the Hon'ble Apex Court.
28. It would be further profitable to mention here that insofar as the decision of the Hon'ble Apex Court in Yogendra Pratap Singh (supra), the Hon'ble Apex Court was considering two divergent views taken by the Hon'ble Apex Court in case of Narsingh Das Tapadia v. Goverdhan Das Partani and Anr., reported in (2000) 7 SCC 183 and in case of Sarav Page 31 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 Investment & Financial Consultancy Private Limited and Anr. v. Llyods Register of Shipping Indian Office Staff Provident Fund and Anr., reported in (2007) 14 SCC 753. The Hon'ble Apex Court in Narsingh Das Tapadia (supra) had taken a view that a compliant under Section 138 of the Negotiable Instruments Act was maintainable even when the stipulated period of 15 days of the receipt of the notice as provided in clause (c) of proviso appended to Section 138 had not expired. On the other hand, the Hon'ble Apex Court in Sarav Investment & Financial Consultancy Private Limited (supra) had taken a view that since Section 138 of the Negotiable Instruments Act contain penal provision, therefore the same would warrant strict construction. The Hon'ble Court had emphasised that clause (c) of the proviso to Section 138 provides that the holder of the cheque must be given an opportunity to pay the amount within 15 days from of the receipt of the notice. Thus, the complainant was required perforce to wait 15 days from service of the notice. The Hon'ble Apex Court had held that the requirement of informing the accused with regard to dishonoruing of cheque and calling upon him to pay the amount of money within 15 days was imperative in character. It is in context of such divergent view, the Hon'ble Apex Court had inter alia relying upon the case of M/s. Kusum Ingots & Alloys Ltd. (supra) held that after period prescribed in clause (c) of the proviso to Section 138 has not expired, then there is no commission of an offence.
29. That the Hon'ble Apex Court in case of Dashrath Rupsing Rathod (supra) was dealing with the question with regard to territorial jurisdiction of the Court in taking cognizance of a complaint under Section 138 of the Negotiable Instruments Act and all the observations of the Hon'ble Apex Court could be termed to be in context of the territorial jurisdiction question. On the other hand, insofar as the case of Yogendra Pratap Singh Page 32 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 (supra) was concerned, the Hon'ble Apex Court was deciding the issue when the cognizance could be taken by the Court concerned, more particularly whether cognizance could be taken even before period of 15 days under clause (c) to Section 138 had elapsed. In the considered opinion of this Court, the observations of the Hon'ble Apex Court in Yogendra Pratap Singh (supra), more particularly the observations referred to hereinabove leave nothing to doubt that the intent of the Hon'ble Apex Court was to clarify on the issue and whereas the aspect of the offence under Section 138 being committed upon all the five ingredients being satisfied was clearly clarified. Under such circumstances, in the considered opinion of this Court, while at first blush, it appears that the decisions in Dashrath Rupsing Rathod (supra) and Yogendra Pratap Singh (supra), are mutually irreconcilable, but viewed from the perspective of the issue in consideration before the Hon'ble Apex Court in both the judgments, it becomes clear that the decisions, are in separate spheres and there is no mutual irreconcilability of the said decisions.
30. At this stage, it would be pertinent to mention here that even in a recent decision of the Hon'ble Apex Court in case of M/s. Gimpex Private Limited Vs. Manoj Goel, reported in 2021 SCC Online SC 925, the Hon'ble Apex Court at Paras 25 and 26 had inter alia reiterated the legal position that there are six ingredients for an offence under Section 135. It would be pertinent to mention here that as against five ingredients mentioned in M/s. Kusum Ingots & Alloys Ltd. (supra), which had been followed in Yogendra Pratap Singh (supra), the Hon'ble Apex Court has mentioned six ingredients, but at the same time closer look would reveal that the first ingredient in M/s. Kusum Ingots & Alloys Ltd. (supra) has been divided into two parts by the Hon'ble Apex Court in case of Gimpex (supra). It would be pertinent to mention that the observations of the Hon'ble Apex Page 33 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 Court in case of K. Bhaskaran (supra) are also referred to in the said decision. Para Nos. 25 and 26 of decision in Gimpex (supra) being relevant, the same are quoted hereinbelow for benefit.
"25. The ingredients of the offence under Section 138 are:
(i) The drawing of a cheque by person on an account maintained by him with the banker for the payment of any amount of money to another from that account;
(ii) The cheque being drawn for the discharge in whole or in part of any debt or other liability;
(iii) Presentation of the cheque to the bank;
(iv) The return of the cheque by the drawee bank as unpaid either because the amount of money standing to the credit of that account is insufficient to PART C honour the cheque or that it exceeds the amount arranged to be paid from that account;
(v) A notice by the payee or the holder in due course making a demand for the payment of the amount to the drawer of the cheque within 30 days of the receipt of information from the bank in regard to the return of the cheque; and
(vi) The drawer of the cheque failing to make payment of the amount of money to the payee or the holder in due course within 15 days of the receipt of the notice.
26. The ingredients of the offence were summarized in fairly similar terms in a judgment of a two judge Bench of this Court in K Bhaskaran v. Sankaran Vaidhyan Balan. Justice K T Thomas observed:
"14. The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the said offence: (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice.""Page 34 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022
R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 Thus, it appears that the view taken by the Hon'ble Apex Court in Yogendra Pratap Singh (supra) is taken by a later bench of the Hon'ble Apex Court consisting three Hon'ble Judges and whereas while decision of Yogendra Pratap Singh (supra) has not been expressly referred to or followed but at the same time, as observed hereinabove, the same view about when an offence is committed under Section 138 of the NI Act as has been taken in Yogendra Pratap Singh (supra), has been taken in the later decision also.
31. Thus, having regard to the discussion, observations and findings and more particularly viewed from the perspective of the observations of the Hon'ble Supreme Court in case of Yogendra Pratap Singh (supra), in the considered opinion of this Court, the issue in question i.e. when does the offence under Section 138 of the Negotiable Instruments Act, be stated to be committed, is an issue explained in decision of the Hon'ble Apex Court in case of Yogendra Pratap Singh (supra). To reiterate it is only upon the five ingredients as mentioned in M/s. Kusum Ingots & Alloys Ltd. (supra), being fulfilled, would offence under Section 138 of the Negotiable Instruments Act be stated to be committed. The observations of M/s. Kusum Ingots & Alloys Ltd. (supra), relied upon in Yogendra Pratap Singh (supra), more particularly in Para 31 being relevant, the same is reproduced hereinbelow for benefit.
"31. Section 138 of the NI Act has been analysed by this Court in Kusum Ingots & Alloys Ltd. wherein this Court said that the following ingredients are required to be satisfied for making out a case under Section 138 of the NI Act:
"(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;Page 35 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022
R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022
(ii) that 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;
(iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.""
Thus, in the considered opinion of this Court, as noted in the decision of M/s. Kusum Ingots & Alloys Ltd. (supra) relied upon in Yogendra Pratap Singh (supra), not only the main provision of Section 138 of the NI Act with regard to dishonour of cheque but the requirements of the provisos to the provision have to be fulfilled for commission of an offence under Section 138 of the NI Act.
32. Insofar as the present facts are concerned, the period of 15 days from the date of giving notice under the proviso (c) to Section 138 of the NI Act had expired on 04.09.2018 and whereas it is upon non-payment of the cheque amount by the drawer (petitioners-accused) till the said date that the offence under Section 138 of the NI Act could be stated to be committed. The said date being later than the date on which the amended Section 143A Page 36 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022 R/SCR.A/907/2020 JUDGMENT DATED: 29/04/2022 came into force i.e. on 01.09.2018, the provisions of the said amended Section would be applicable to the complaint in question.
33. Regard being had to the above discussion, observations and finding, this Court is of the considered opinion that no error on facts as well as on law has been committed by the Courts below while passing the orders impugned, hence no interference is warranted. Hence, the present petition fails and is dismissed.
34. In view of the order passed in the main matter, the Criminal Misc. Application (For Stay) No. 1 of 2022 would not survive, hence the same is disposed of accordingly.
(NIKHIL S. KARIEL,J) BDSONGARA Page 37 of 37 Downloaded on : Sat Apr 30 20:49:45 IST 2022