Andhra Pradesh High Court - Amravati
Chokkakula Eswara Rao vs Randhi Ramachandrudu Another on 19 July, 2019
Author: M.Satyanarayana Murthy
Bench: M.Satyanarayana Murthy
HIGH COURT OF ANDHRA PRADESH
****
CRIMINAL PETITION Nos.12162, 12170 and 12172 OF 2014
Between:
Crl.P.No.12162 of 2014
Chokkakula Eswara Rao
... Petitioner
And
Sri Badireddi Suryanarayana and another
... Respondents.
JUDGMENT PRONOUNCED ON 19.07.2019
THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY
1. Whether Reporters of Local newspapers
may be allowed to see the Judgments? No
2. Whether the copies of judgment may be
marked to Law Reporters/Journals Yes
3. Whether Their Ladyship/Lordship wish to
see the fair copy of the Judgment? Yes
MSM,J
Crl.Ps_12162, 12170 and 12172_2014
2
* THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY
+ CRIMINAL PETITION Nos.12162, 12170 and 12172 of 2014
% 19.07.2019
Crl.P.No.12162 of 2014:
# Chokkakula Eswara Rao
....Petitioner
v.
$ Sri Badireddi Suryanarayana and another
.... Respondents
! Counsel for the Petitioners : Sri G.L.Nageswara Rao
Counsel for Respondents: Sri A.Rama Krishna and
Sri Saripalli Subramanyam.
<Gist :
>Head Note:
? Cases referred:
1. 2013 (2) ALD (Crl.) 839 (SC)
2. AIR 2008 SC 3086
3. 2012 CRI.L.J. 93
4. (1993) 2 CALLT 101 HC
5. (1995) 83 CompCas 785 (Mad)
MSM,J
Crl.Ps_12162, 12170 and 12172_2014
3
THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY
CRIMINAL PETITION Nos.12162, 12170 and 12172 of 2014
COMMON ORDER:
These Criminal Petitions are filed under Section 482 of Criminal Procedure Code (for short "Cr.P.C.") to quash the proceedings in C.C.Nos.153, 154 and 155 of 2013 pending on the file of Judicial Magistrate of First Class, Srungavarapu Kota, Vizianagaram District, registered for the offence punishable under Section 138 of Negotiable Instruments Act (for short "the N.I.Act").
The respondent No.1 is the complainant in all the three petitions. Different complainants filed private complaints against the petitioner for the offence punishable under Section 138 of the N.I.ACt, which are registered as C.C.No.153, 154 and 155 of 2013 pending on the file of Judicial Magistrate of First Class, Srungavarapu Kota, Vizianagaram. The details of date of debt, debt amount, cheque number, date of presentation are given in the table given hereunder.
Case Date of debt Debt Cheque Date of Notice date Dated on
No. amount in number return of which
Rs. and date cheque notice
Crl.P.
served on
No.
the
accused
12162 20.12.2011 2,50,000/- 926445 26.03.2013 08.04.2013 10.04.2013
of
25.03.2013
2014
12170 16.02.2012 3,00,000/- 306711 26.03.2013 06.04.2013 08.04.2013
of
19.03.2013
2014
12172 10.01.2012 2,00,000/- 992319 23.03.2013 05.04.2013 08.04.2013
of
12.03.2013
2014
It is the contention of the respondent No.1 - complainant that the petitioner borrowed different amounts on different dates shown in the table for his business purpose and family necessities agreeing to MSM,J Crl.Ps_12162, 12170 and 12172_2014 4 repay the same together with interest at 24% p.a. and executed promissory notes on the even dates in favour of the complainant. Despite demands made by the respondent No.1 - complainant, the petitioner did not repay the same. The petitioner issued a cheque bearing No.926445 for Rs.2,50,000/- drawn on Indian Overseas Bank, Gajuwaka Branch (old) Visakhapatnam (C.C.No.153 of 2013) and cheque bearing No.306711 for Rs.3,00,000/- drawn on Karur Vysya Bank, Gajuwaka Branch, Visakhapatnam (C.C.No.154 of 2013) and another cheque bearing No.992319 for Rs.2,00,000/- drawn on Indian Overseas Bank, Gajuwaka Branch (old) Visakhapatnam (C.C.No.155 of 2013) towards principal amount due under the promissory notes.
When the said cqueques were presented for collections, they were returned unpaid due to insufficiency of funds in the account of the petitioner and returned with cheque return memo dated 26.03.2013 (C.C.No.153 and 154 of 2013) and cheque return memo dated 23.03.2013 (C.C.No.155 of 2013). Thereafter, the respondent No.1 demanded for payment of amount covered by dishonoured cheque by registered notice dated 08.04.2013 (C.C.No.153 of 2013), 06.04.2013 (C.C.No.154 of 2013) 05.04.2013 (C.C.No.155 of 2013) within 15 days from the date of receipt of notice in compliance of Section 138 of the N.I.Act, but the complainants have not received the postal acknowledgment from the petitioner/accused evidencing receipt of notice, thereupon counsel for respondent No.1 - complainants addressed a letter to the Superintendent of Post Offices. On 09.05.2013 the Superintendent of Post Offices addressed a letter to the advocate for the complainants informing that the petitioner/accused received the registered notice on 10.04.2013 MSM,J Crl.Ps_12162, 12170 and 12172_2014 5 (C.C.No.153 of 2013) 08.04.2013 (C.C.Nos.154 and 155 of 2013). Despite receipt of demand notice, the petitioner did not pay the amount covered by dishonoured cheques within the stipulated time i.e. 15 days from the date of receipt of notice. Thus, the petitioner committed offence punishable under Section 138 of the N.I.Act.
The present petitions are filed raising various contentions and they are similar in all the three petitions.
It is contended that the complaints are barred by limitation, thereby continuation of proceedings against the petitioner is abuse of process of Court, on this ground alone, the proceedings against the petitioner are liable to be quashed.
The petitioner explained as to how the claims of the respondent No.1 - complainant are barred by limitation with reference to date of legal notice, its service, and failure of the petitioner to pay the amount covered by dishonoured cheque, which gives rise to cause of action and the date of filing of complaints is beyond 30 days from the date of receipt of notice and requested to quash the proceedings on the sole ground of limitation.
It is also further contended that the Court at Srungavarapu Kota has no jurisdiction as per the judgment of Apex Court in "Dasarath Rupesingh Rathod v. State of Maharashtra (Criminal Appeal No.2287 of 2009) as the drawee bank is situated at Visakhapatnam. On this ground also the proceedings are liable to be quashed.
During hearing, Sri G.L.Nageswara Rao, learned counsel for the petitioner, demonstrates as to how the complaint is barred by MSM,J Crl.Ps_12162, 12170 and 12172_2014 6 limitation and there is a provision in the N.I.Act to condone delay if for any reason, the respondent No.1 is unable to file complaint within the limitation, but without filing such petition, the complainant straightaway filed the complaints as if cause of action arose within one month from the date of knowledge as to receipt of notice by the petitioner. In support of his contentions, he placed reliance on the judgment of Apex Court rendered in "Econ Antri Ltd. v. Rom Industries Ltd. and another1" and "Subodh S.Salaskar v. Jayprakash M.Shah2"
On the strength of the principles laid down in the above two judgments, learned counsel for the petitioner requested to quash the proceedings while not pressing the ground of territorial jurisdiction based on the principle laid down in "Dasarath Rupesingh Rathod v. State of Maharashtra (Criminal Appeal No.2287 of 2009) in view of amendment to the provisions of the N.I.Act giving retrospective effect.
Learned counsel for the respondent No.1 - complainant Sri A.Ramakrishna contended that unless service of notice in compliance of clause (c) of the proviso to Section 138 of the N.I.Act is not within the knowledge of the complainant and came to know about the service of notice when the Superintendent of Post Offices addressed a letter to the counsel for the respondent No.1 - complainant informing the exact date of service of demand notice on the petitioner and unless the respondent No.1 - complainant had knowledge about service of notice, he cannot file a complaint since the date of service is relevant and failure to pay the amount within 15 days from the date of knowledge as to receipt of notice gives raise to cause of action 1 2013 (2) ALD (Crl.) 839 (SC) 2 AIR 2008 SC 3086 MSM,J Crl.Ps_12162, 12170 and 12172_2014 7 for filing complaint for the offence punishable under Section 138 of the N.I.Act. Therefore, limitation starts from the date of knowledge about the service of notice and not from the date of actual service on the petitioner/accused. He placed reliance on the judgment of Kerala High Court in "Gopalakrishnan Lekshmanan v. Noor-jahan Abdul Azeez3", judgment of Calcutta High Court in "Santa Priya Engineers (Pvt.) Ltd. v. Uday Sankar Das and another4" and another judgment of Madras High Court in "N.Velayutham v. Sri Ganesh Steel Syndicate5"
Based on the law declared by various High Courts in the above judgments and provisions of the N.I.Act more particularly Section 138 (2) (b) and Section 142 of the N.I.Act. learned counsel for the respondent No.1 - complainant contended that the limitation starts from the date of knowledge as to receipt of notice by the accused for filing complaint under Section 138 of the N.I.Act. but not from the date of actual service of notice. Therefore, the complaints were filed within the time stipulated i.e. one month from the date of cause of action i.e. from the date of knowledge about the service of notice, consequently the Court cannot quash the proceedings in C.C. Nos.153, 154 and 155 of 2013 on the file of Judicial Magistrate of First Class, Srungavarapu Kota, Vizianagaram.
Considering rival contentions, perusing the material available on record, the point that arises for consideration is:
Whether the cause of action arose for filing complaints for the offence punishable under Section 138 of the Negotiable Instruments Act immediately after expiry of 15 days from the date of knowledge about service of notice on 3 2012 CRI.L.J. 93 4 (1993) 2 CALLT 101 HC 5 (1995) 83 CompCas 785 (Mad) MSM,J Crl.Ps_12162, 12170 and 12172_2014 8 the accused or from the date of actual service of notice on the accused? If it is from the date of expiry of 15 days of actual service, whether the complaints filed by the respondent No.1 on different dates shown in the above table are barred by limitation and liable to be quashed?
In Re POINT:
Section 142 of the N.I.Act deals with cognizance of offence and Sub-Section (1) (b) made it clear that a complaint is made within one month on the date on which the cause of action arises under clause (c) of the proviso to Section 138 of the N.I.Act. Thus, the relevant date for deciding the cause of action for filing the complaint is the date on which 15 days time after service of notice is expired as specified in clause (c) of the proviso to Section 138 of the N.I.Act.
Section 138 of the N.I.Act deals with dishonour of cheque for insufficiency of funds in the account, but the entire provision is unnecessary for deciding the real controversy except clause (c) of proviso to Section 138 of the N.I.Act.
According to clause (c) of proviso to Section 138 of the N.I.Act, drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. As such, the cause of action for filing complaint commences from 16th day after service of notice for payment of amount covered by the dishonoured cheque on strict interpretation as per contention of the learned counsel for the petitioners.
In the present facts of the case, cheques were dishonoured allegedly on different dates and notices in compliance of clause (c) of the proviso to Section 138 of the N.I.Act. and the complaints were filed on various dates shown the above table. As seen from the details MSM,J Crl.Ps_12162, 12170 and 12172_2014 9 given in the table, cause of action starts from 26.04.2013 (C.C.No.153 of 2013) 24.04.2013 (C.C.No.154 of 2013) 24.04.2013 (C.C.No.155 of 2013) i.e. 16th day after service of notice issued in compliance of clause (c) of proviso to Section 138 of the N.I.Act as per the contention of the learned counsel for the petitioners.
In the present case though notices demanding payment of amount covered by dishonoured cheque were issued on various dates, the postal department did not return the acknowledgement evidencing the receipt of notice by the petitioner/accused herein. Thereupon, complainant addressed a letter to the Superintendent of Post Offices, in turn, the postal department intimated that the notices were served on the petitioner on 10.04.2013 (C.C.No.153 of 2013), 08.04.2013 (C.C.Nos.154 and 155 of 2013).
A bare look at clause (c) of the proviso to Section 138 of N.I.Act, limitation starts from the 16th day after service of notice as the accused is entitled to pay the amount covered by the dishonoured cheque within 15 days from the date of receipt of such notice, but the respondent No.1 - complainant had no knowledge about the service of notice issued in compliance of clause (b) of the proviso to Section 138 of the N.I.Act, till the date of receipt of letter from Superintendent of Post Offices on various dates as stated above.
Learned counsel for the respondent No.1 - complainant contended that the limitation starts from the date of knowledge about the service of notice issued in compliance of clause (b) of the proviso to Section 138 of the N.I.Act since it is difficult for the complainant to know about the actual date of service unless notice was served personally and obtained acknowledgment from the accused or postal acknowledgement is received in case notice was sent through Registered Post and if notice was sent by courier on receipt of proof of MSM,J Crl.Ps_12162, 12170 and 12172_2014 10 delivery. No doubt, it is difficult for the complainant to know the exact date of service except acknowledgment is received from the postal authorities or from the courier agent or personal acknowledgment if notice is served in-person. Keeping in mind, such difficulties, the legislature provided certain safeguards to draw certain presumptions as to service of notice when it was sent by registered post, under Section 27 of General Clauses Act. To meet certain exigencies, proviso to Section 142 is incorporated by Amendment Act 55 of 2002 with effect from 06.02.2003, which permits the Magistrate to take cognizance of the complainant after prescribed period, if complainant satisfies the Court that he had sufficient cause for not making such complaint within such period.
The main contentions urged by the learned counsel for the respondent No.1 before this Court is that in the absence of knowledge as to actual service of notice, limitation starts from the date of knowledge only. In support of his contention, he placed reliance on the judgment of Kerala High Court rendered in "Gopalakrishnan Lekshmanan v. Noor-jahan Abdul Azeez"
(referred supra). Learned Single Judge of Kerala High Court considered the scope of Clause (c) of proviso to Section 138 of the N.I.Act and Section 142 of the N.I.Act and recorded his findings.
In view of the controversy, few facts of the said case are necessary.
On presentation of cheque issued by the accused therein, the same was dishonoured on the ground that there are no sufficient funds to the credit of the account of the accused and notice was sent in compliance of clause (b) of the proviso to Section 138 of Negotiable Instruments Act demanding payment of amount covered by dishonoured cheque, but he did not choose to issue any reply.
MSM,J Crl.Ps_12162, 12170 and 12172_2014 11 Neither information nor acknowledgment was received by the complainant. Therefore, advocate sent letter to the postal authorities complaining about non-receipt of postal acknowledgment. The complainant had received letter from the postal authorities and came to know that the registered article/notice was delivered to the addressee on particular date. Therefore, complaint was filed beyond one month as the complainant had no knowledge about exact service of notice to file a complainant strictly adhering to Section 142 (b) read with clause (c) of the proviso to Section 138 of the N.I.Act.
On considering the above facts and circumstances of the case, the learned Single Judge of Kerala High Court held that "under the provisions of clause (c) of Section 138 of the Act, the cause of action for such-like complaint arises on failure of the drawer "to make payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within 15 days of the receipt of the said notice" given under clause (b) thereof; and not before that. No such complaint can, therefore, legally be filed before the aforesaid period. That being so, the relevant date for accrual of cause of action for such complaint is the date of receipt of notice by the drawer. The complainant being the sender of the notice cannot clearly know the date of actual service of the same and can only wait for the acknowledgment card. The receipt of the notice under clause (b) of Section 138 of the Act must invariably be by the drawer of the cheque to whom it is given. Knowledge of the sender about the date of receipt of notice by the drawer is, therefore, very much material as regards accrual of the cause of action for making the complaint. Where notice is sent by registered post with acknowledgment due, which is the usual mode of service waiting for the acknowledgment card can, hardly be avoided, if the parties do not MSM,J Crl.Ps_12162, 12170 and 12172_2014 12 belong to the same place or near about places. The knowledge of the sender (complainant) about the fact of date of receipt of such notice by the addressee/accused would invariably be dependent upon the agencies, namely, the Postal Department, which is obliged to return back the postal acknowledgment card to the sender of the registered notice. Acknowledgement card did not reach back the sender, necessitating correspondence with the Postal Department as to the delivery/service of the registered notice or the date of delivery/service of such notice. In such circumstances, the complainant herein cannot be compelled to draw the presumption regarding due service of notice by the addressee/accused as provided under Section 27 of the General Clauses Act. Such presumption in support of service of notice would depend upon the facts and circumstances of each case and such presumption can be raised by the complainant at the trial stage only. Such presumption of due service can be rebutted by the accused. Accordingly, the appellant opted to take the risk for proving that the accused received the notice and preferred the complaint before the postal authorities and obtained certificates regarding the delivery of notice whereby on 27/10/2000 he knew about the actual receipt of the postal article/statutory notice by the addressee/accused on 05/09/2000."
The finding recorded by the learned Single Judge of Kerala High Court is that "cause of action for such complaint, so far as the complainant in this case is concerned, would accrue on the date of failure of the drawer to make payment within fifteen days from the date of knowledge of the complainant about the receipt of the notice by the drawer/accused. Such construction would not in any way be prejudicial to the accused. It would rather be beneficial to her as she MSM,J Crl.Ps_12162, 12170 and 12172_2014 13 would get longer time to make payment of the amount and thus avoid criminal liability for non-payment."
Learned Single Judge of Kerala High Court clearly expressed his view that the limitation starts from the date of knowledge of receipt of notice by the accused, issued in compliance of proviso to Section 138 of the N.I.Act and not from the date of actual receipt of notice by the accused, in the absence of receipt of postal acknowledgment or any other material to establish receipt of notice by the accused.
Learned counsel for the respondent No.1 - complainant relied on the principle laid down in "N.Velayutham v. Sri Ganesh Steel Syndicate" (referred supra), learned Single Judge of Madras High Court, almost in identical situation, held as follows:
"Now, coming to the last submission that the date of service of notice on the accused has not been mentioned in the complaint and so that is an infirmity, which goes to the root of the matter. In this regard, he relied upon the list of documents given in the complaint. In it, item No. 8 is the complainant's advocate notice dated September 25, 1991, and item No. 9 is acknowledgment dated July 1, 1991, and that he would submit that the notice sent on September 25, 1991, cannot be received on an earlier date, viz., July 1, 1991. Obviously, there is some mistake in this regard and that can be clarified during the course of evidence, which will come only at the time of trial. Regarding the date of receipt of notice, there is no mention in the complaint about it. But it is definitely stated that the notice was received by the accused, he had acknowledged it and still he has not paid that amount. As such, the date of receipt of notice is not made clear in the complaint. There is obviously an omission. That will come to light only during the course of trial. If this complaint was filed before the expiry of 15 days from the date of receipt of notice, then it has to be dismissed and if it was filed after the expiry of fifteen days from the date of receipt of notice, then certainly it will be in order, if it was filed within 30 days of the date of receipt of notice and if the cheque amount was not paid within 15 days of the date of receipt of notice. At this stage, when the date of receipt of notice is not specifically stated in the complaint, no presumption can be made either this way or that way. There is a positive allegation that the accused had received the notice and had acknowledged it. Only for the purpose of computing the period of time as to whether it is filed within time or beyond time, the date is to be fixed. That can be done at the time of trial and so I am unable to quash it at the threshold.
MSM,J Crl.Ps_12162, 12170 and 12172_2014 14 Mr. Ramesh would reply upon Elangovan v. Narayana Iyengar [1991] 2 MWN (Cri.) 87, in which this court occasion to consider the requirements of service of notice on the accused. In that case, the notice sent by the complainant to the accused was returned with a postal endorsement "addressee not available in station". By no stretch of imagination can such an endorsement to taken as service of notice on the accused. Neither was there any averment in the complaint, in that case, about the receipt of notice by the accused, giving him the requisite period of 15 days time. On the facts of that case, it was held that it is not sufficient to satisfy the requirements of the proviso to section 138 of the Act. The facts of the case before me are totally different and hence this ruling is not applicable to this case. Hence this submission made by Mr. Ramesh in this regard, cannot be accepted."
Learned Single Judge of Calcutta High Court also considered to some extent as to when the cause of action arises in ""Santa Priya Engineers (Pvt.) Ltd. v. Uday Sankar Das and another" (referred supra) and held that "under the provisions of Clause (c) of Section 138 of the Act, the cause of action for such-like complaint arises on the failure of the drawer "to make payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within 15 days of the receipt of the said notice"
given under Clause (b) thereof, and not before that. No such complaint can, therefore, legally be filed before the aforesaid period. That being so, the material and relevant date for accrual of cause of action for such-like complaint is the date of receipt of notice by the drawer. The complainant being the sender of the notice cannot clearly receive the same. The recipient of the notice under Clause (b) of Section 138 of the Act must invariably be the drawer of the cheque, to whom it is given. Knowledge of the sender about the date of receipt of the notice by the drawer is, therefore, very much material as regards accrual of the cause of action for making like complaint. The sender of the notice could clearly have no personal knowledge about the date of receipt of the same, unless the notice is MSM,J Crl.Ps_12162, 12170 and 12172_2014 15 sent by messenger and the receipt thereof is duly acknowledged by the person to whom it is sent. But in cases (as in the instant case), where notice is sent by registered post with acknowledgment due, which is the usual mode of service, which could, in particular, hardly be avoided if the parties do not belong to the same place or near about places, the knowledge of the sender (complainant) about the date of receipt of such notice would invariably be dependent upon other agencies, namely, the postal department, which is obliged to return back the acknowledgment card to the sender of the registered notice. But the promptitude and efficiency of the postal department is a matter which is an everyday experience for the people at large. More often than not, acknowledgment card is hardly returned back to the sender (of the registered notice) in time. Not infrequently, the acknowledgment card never reaches back the sender, necessitating correspondence with the postal department as to the delivery/service of the registered notice or the date of delivery/ service of such notice. Not unoften, the somnolence of the postal authority could hardly be shaken within reasonable time in answering such query when the acknowledgment due card does not reach back the sender. In such cases, such complaint is likely to fail for no fault of the complainant, but for the failure/laches on the part of the postal department. The purpose of the Act is, therefore, likely to be frustrated, in such circumstances, which could never possibly have been intended by the makers thereof. The question which thus naturally arises for consideration is whether the literal and mechanical way of construing Clause (c) of Section 138 of the relevant Act would be justified in law, in such circumstances. The knowledge of the sender of the notice about the date of receipt of the same being an essential requirement of fair-play and natural justice, the expression "within 15 days of MSM,J Crl.Ps_12162, 12170 and 12172_2014 16 the receipt of the said notice", used in the aforesaid provision, should clearly mean the date when the sender acquires the knowledge about the date of the receipt of the notice given by him under Clause (b) of the relevant provision. If a person is given a right to resort to a remedy within a prescribed time, limitation should not be computed from a date earlier than that on which the party aggrieved actually knew about the date of accrual of the cause of action for making a complaint before the competent court for seeking redress therefore, or else, it might be an absurd and unreasonable application of law. On the analogy of the decision of the Supreme Court in K. P. Varghese v. ITO [1981]131ITR597(SC) , we must, therefore, eschew literalness in the interpretation of Clause (c) of Section 138 of the Act and "try to arrive at an interpretation which avoids such absurdity and mischief and makes the provision rational and sensible, unless of course, our hands are tied and we cannot find any escape from the tyranny of literal interpretation." It is now a well- settled rule of construction that where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result, which could never have been intended by the Legislature, the court may modify the language used by the Legislature, or even "do some violence" to it, so as to achieve the obvious intention of the Legislature and produce a rational construction (vide Luke v. Inland Revenue Commissioners [1964] 54 ITR 692 (HL)). The court may also in such a case read into the statutory provision a condition which, though not expressed, is implicit as constituting the basic assumption underlying the statutory provision. It, therefore, seems to me that having regard to this well recognised rule of interpretation, a fair and reasonable construction of Clause (c) of Section 138 of the Act should be read into it, so, that the expression therein "within 15 MSM,J Crl.Ps_12162, 12170 and 12172_2014 17 days of the receipt of the said notice" should be made to mean within 15 days from the date of knowledge of the sender about the receipt of the notice so that such complaint may not fail for default on the part of the postal department, without any fault on the part of the complainant. On such construction, the cause of action for such complaint, so far as the complainant is concerned, would accrue on the failure of the drawer to make payment within fifteen days from the date of knowledge of the complainant about the receipt of the notice by the former (drawer), which would neither be prejudicial to him (drawer/accused), rather beneficial to him as he would get longer time to make payment of the amount and thus avoid criminal liability for non-payment. It would indeed be in the interest of such complainant to file complaint for such offences within the prescribed period so that the same may not be turned down for having been filed beyond the prescribed period resulting in failure of the remedy available to him under the law on such technical ground. Such complainant would invariably be interested in seeing that the court takes cognizance of the offence and issues process because that would be the culmination of the petition of complaint filed by him on the allegations made and could hardly allow his petition of complaint to be time barred to his own prejudice. At the same time, however, the complainant should exhibit due diligence and promptitude in securing knowledge within a reasonable period about the date of receipt of the notice, sent by registered post acknowledgment due, without sleeping over the matter for an unreasonable period, in case of failure of the postal department to send back the acknowledgment due card and/or intimate the date of receipt of the notice by the addressee within a reasonable period."
MSM,J Crl.Ps_12162, 12170 and 12172_2014 18 In all the above three judgments, the learned Single Judges of different High Courts interpreted Clause (c) of the proviso to Section 138 and Section 142 of N.I.Act and held that on harmonious construction of provisions of Chapter XVII of the N.I.Act, which deals with Penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts, limitation starts from the date of knowledge of service of notice.
Taking advantage of the principle laid down by Single Judge of three different High Courts (referred above) learned counsel for the respondent No.1 - complainant contended that the complaint is within limitation, whereas Sri G.L.Nageswara Rao, learned counsel for the petitioner, contended that even after receipt of letter about the service of notice from the Superintendent of Post Offices, the complainant had sufficient time to file complaint i.e. approximately 15 days to expire one month time from the date of receipt of notice. But the complainant did not choose to file complaint within the time and calculated the time from the date of receipt of information by exhibiting sheer negligence in filing complaint after expiry of limitation.
Learned Single Judge of various High Courts (referred above) has gone to the extreme step to conclude that Section 27 of General Clauses Act has no application in those cases and the cause of action starts from the date of knowledge of receipt of notice, when no acknowledgment was returned by the postal authorities. All the three judgments of three different High Courts are not binding precedents on this Court except persuasive value.
Learned counsel for the petitioner while contending that the complaint is barred by limitation as the cause of action for filing compliant arose on 26.04.2013 (C.C.No.153 of 2013) 24.04.2013 MSM,J Crl.Ps_12162, 12170 and 12172_2014 19 (C.C.No.154 of 2013) 24.04.2013 (C.C.No.155 of 2013). Even assuming for a moment that postal authorities did not return postal acknowledgment, but communicated to the counsel for respondent No.1 - complainant in writing on the request made by the learned counsel for the respondent No.1 - complainant; even by the date of such communication one month period prescribed under Clause (b) of the proviso to Section 138 of N.I.Act had not expired. But the complainant did not choose to file complaint within one month from the date of cause of action under clause (c) of the proviso to Section 138 of the N.I.Act.
In support of his contention, he placed reliance on the judgment of Apex Court in "Econ Antri Ltd. v. Rom Industries Ltd. and another" (referred supra). In the said judgment, the Apex Court held that "as the Limitation Act is held to be not applicable to N.I. Act, drawing parallel from Tarun Prasad Chatterjee v. Dinanath Sharma (AIR 2001 SC 36) where the Limitation Act was held not applicable, the Court is of the opinion that with the aid of Section 9 of the General Clauses Act it can be safely concluded in the present case that while calculating the period of one month which is prescribed under Section 142(b) of the N.I. Act, the period has to be reckoned by excluding the date on which the cause of action arose. It is not possible to agree with the counsel for the Respondents that the use of the two different words 'from' and 'of' in Section 138 at different places indicates the intention of the legislature to convey different meanings by the said words." The Apex Court further held that for the purpose of calculating the period of one month, which is prescribed under Section 142(b) of the N.I. Act, the period has to be reckoned by excluding the date on which the cause of action arose.
MSM,J Crl.Ps_12162, 12170 and 12172_2014 20 In the facts of the above judgment, dispute was with regard to applicability of Section 12 of the Limitation Act to exclude the date on which the cause of action arose. The Apex Court concluded that the limitation of one month has to be reckoned by excluding the date on which the cause of action arose. But the question before this Court is not with regard to applicability of Section 12 of the Limitation Act to exclude the date on which the cause of action arose.
The Apex Court in "Subodh S.Salaskar v. Jayprakash M.Shah" (referred supra) considered an identical question to decide the date of cause of action to calculate the limitation for filing complaint for the offence punishable under Section 138 of the N.I.Act. The Apex Court while considering the aspect of cause of action for filing complaint specified basic ingredients to exist for filing complaint, viz.,
(a) a cheque was issued;
(b) the same was presented;
(c) but, it was dishonoured;
(d) a notice in terms of the said provision was served on the person sought to be made liable; and
(e) despite service of notice, neither any payment was made nor other obligations, if any, were complied with within fifteen days from the date of receipt of the notice.
[See S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Anr. (2007)4SCC70 , Saroj Kumar Poddar v. State (NCT of Delhi) and Anr. 2007CriLJ1419 and DCM Financial Services Ltd. v. J.N. Sareen and Anr. 2008CriLJ3178] The Apex Court lucidly discussed cause of action for filing complaint and stated as follows:
MSM,J Crl.Ps_12162, 12170 and 12172_2014 21 "A complaint petition in view of Clause (b) of Section 142 of the Act was required to be filed within one month from the date on which the cause of action arose in terms of Clause (c) of the proviso to Section 138 of the Act which stipulates that "the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice".
The Apex Court also adverted to Section 27 of General Clauses Act, expressed its view that "thirty days" time ordinarily must be held to be sufficient for service of notice. In fact when the service of notice is sought to be effected by Speed Post, ordinarily the service takes place within a few days. Even under Order V, Rule 9(5) of the Code of Civil Procedure, 1908, summons is presumed to be served if it does not come back within thirty days. In a situation of this nature, there was no occasion for the Court to hold that service of notice could not be effected within a period of thirty days. Presumption of service, under the statute, would arise not only when it is sent by registered post in terms of Section 27 of the General Clauses Act but such a presumption may be raised also under Section 114 of the Indian Evidence Act. Even when a notice is received back with an endorsement that the addressee has refused to accept, still a presumption can be raised as regards the valid service of notice. Such a notice, as has been held by a Three-Judge Bench of the Apex Court in "C.C. Alavi Haji v. Palapetty Muhammed and Anr. (2007CriLJ3214)" should be construed liberally."
The Apex Court also noted clause (b) of the proviso to Section 142 of the N.I.Act. incorporated in 2002, concluded that the provisions of the Act being special in nature, in terms thereof the jurisdiction of the court to take cognizance of an offence under Section 138 of the Act was limited to the period of thirty days in MSM,J Crl.Ps_12162, 12170 and 12172_2014 22 terms of the proviso appended thereto. The Parliament only with a view to obviate the aforementioned difficulties on the part of the complainant inserted proviso to Clause (b) of Section 142 of the Act in 2002. It confers jurisdiction upon the court to condone the delay. It is, therefore, a substantive provision and not a procedural one. The matter might have been different if the Magistrate could have exercised its jurisdiction either under Section 5 of the Limitation Act, 1963 or Section 473 of the Code of Criminal Procedure, 1976. The provisions of the said Acts are not applicable. In any event, no such application for condonation of delay was filed. If the proviso appended to Clause (b) of Section 142 of the Act contained a substantive provision and not a procedural one, it could not have been given a retrospective effect. A substantive law, as it is well- settled, in absence of an express provision, cannot be given a retrospective effect or retroactive operation.
Thus, in view of the law declared by the Apex Court after considering Section 27 of the General Clauses Act and Section 142
(b) of the N.I.Act and proviso thereto, clause (c) of the proviso to Section 138 of the N.I.Act the cause of action arose for filing compliant on the 16th day after service of notice on the accused, issued under clause (b) of the proviso to Section 138 of the N.I.Act.
Learned Single Judges of Calcutta, Kerala and Madras High Courts, to avoid prejudice to the accused, interpreted the provisions liberally so as to serve the purpose of filing compliant.
Chapter XVII of the N.I.Act consisting various sections commencing from Sections 138 ends with Section 148. Section 138 of the N.I.Act is a penal provision, whereas other sections deal with other ancillary aspects. Thus, when the penal status prescribes certain rule as to the cause of action, normally the Court cannot MSM,J Crl.Ps_12162, 12170 and 12172_2014 23 interpret the provision in the absence of any ambiguity in the provision.
Normal rule is that every statute, defining an offence against the State, whatever the character of the offence may be, is enforced by criminal remedies. Penal statute must be construed strictly.
When a statute dealing with a criminal offence impinging upon the liberty of citizens, a loophole is found, it is not for Judges to cure it, for it is dangerous to derogate from the principle that a citizen has a right to claim that howsoever much his conduct may seem to deserve punishment, he should not be convicted unless that conduct falls fairly within the definition of crime of which he is charged. The fact that an enactment is a penal provision is in itself a reason for hesitating before ascribing to phrases used in it a meaning broader than that they would ordinarily bear. There is all the more reason to construe strictly a drastic penal statute with deal with crimes of aggravated nature which could not be effectively controlled under the ordinary criminal law. Such a statute should not ordinarily be resorted to if the nature of the activities of the accused can be checked and controlled under the ordinary criminal law. The duty of the Court is to give effect to the purpose as expressed in clear and unambiguous language and that obligation is not altered because the Act is penal in character. So the application of the rule does not permit the Court in restraining comprehensive language used by the Legislature, the wide meaning of which is in accord with the object of the statute. Even if there be sharp divergence of opinion amongst the High Courts on the construction of a provision in a penal statute, the Supreme Court will not necessarily prefer the narrower view which favours the accused and not the prosecution and may prefer to accept the wider view which is more consistent with the object of the MSM,J Crl.Ps_12162, 12170 and 12172_2014 24 provision. Thus, the provisions of penal law have to be construed strictly to give effect to the object of enactment.
Therefore, I am completely not in agreement with the view expressed by three Judges of three different High Courts in the judgments (refereed supra).
In other words, if there is any ambiguity, statue should be construed in favour of the subject. But in modern times, it means "unless penalties are imposed in clear terms they are not enforceable (Att.-Gen. v. Till (1910) A.C. 50 at P.51)". While construing a Penal Statute, a question is simply what is the meaning of the words which the statute has used to describe the prohibited act or transaction? If these words have a natural meaning, that is their meaning, and such meaning is not to be extended by any reasoning used on the substance of the transaction. If the language of the statute is equivocal and there are two reasonable meanings of that language, the interpretation which will avoid the penalty is to be adopted. ((1962) 2 W.L.R. 51) Thus, strict construction rule must be applied while interpreting penal statute as a general rule of construction of penal statute.
It appears that the Single Judges of three different High Courts (referred above) applied mischief rule to interpret the provisions.
Mischief Rule is based on Heydon's case and is designed to carry into effect the object and purpose of the statute. This method of approach is easy to apply when the objects and reasons of the Act are set out therein as, for instance, in the Statute of Frauds, but difficult MSM,J Crl.Ps_12162, 12170 and 12172_2014 25 to apply when these are wanting. It is, however, a method much resorted to in approaching the construction of all types of statutes.
In the present facts of the case, there is no ambiguity in the language used in clause (c) of the proviso to Section 138 of the N.I.Act. and Section 142 of the N.I.Act. On the other hand, Chapter XVII of the N.I.Act itself is a complete code, which deals with the procedure for filing complaint for the offence punishable under Section 138 of the N.I.Act and in the absence of any ambiguity or giving scope for two different meanings, interpretation is totally unnecessary, but the doctrine of strict construction alone is to be applied and not mischief rule or doctrine of reading down.
Learned single Judges of different High Courts (referred above) did not consider the scope of proviso to clause (b) of Section 142 of the N.I.Act and the effect of Section 27 of the General Clauses Act in a right perspective.
On overall consideration of Gopalakrishnan Lekshmanan v. Noor-jahan Abdul Azeez", "Santa Priya Engineers (Pvt.) Ltd. v. Uday Sankar Das and another" and "N.Velayutham v. Sri Ganesh Steel Syndicate" (referred above) for different reasons learned Single Judges of three different High Courts concluded that the General Clauses Act has no application, but the same is contrary to the principle laid down in "Subodh S.Salaskar v. Jayprakash M.Shah" (referred supra). Clause (b) of the proviso to Section 142 of the N.I.Act is added in 2002. Learned Single Judge of Kerala High Court did not advert to the proviso while interpreting Section 142 (b) and clause (c) of the proviso to Section 138 of the N.I.Act.
Similarly, learned Single Judge of Calcutta High Court did not consider the proviso to clause (b) of Section 142 of the N.I.Act and in fact such consideration of proviso in the judgment would not arise as MSM,J Crl.Ps_12162, 12170 and 12172_2014 26 it relates to the period prior to incorporation of Clause (b) to Section 142 of the N.I.Act.
Learned Single Judge of the Madras High Court did not consider various provisions since the judgment is of the year 1994, by that time the clause (b) to the proviso to Section 142 is not on statute book.
In view of the above discussion, I am unable to agree with the view expressed by the learned Single Judges of Kerala, Calcutta and Madras High Courts when the statute itself prescribes date for commencement of cause of action. More so, the statute itself safeguarded the interest of the complainant enabling him to file complaint even after expiry of period of limitation by incorporating clause (b) of the proviso to Section 142 of the N.I.Act. If clause (c) of the proviso to Section 138 and clause (b) of the proviso to Section 142 of the N.I.Act are read together, the cause of action for filing complaint would arise only on the day after expiry of 15 days after service of notice issued in compliance of clause (b) of the proviso to Section 138 of the N.I.Act and not from the date of knowledge. If for any reason, the complainant did not receive acknowledgement when the notice was sent by registered post to the correct address, the Court can draw the presumption contained in Section 27 of General Clauses Act or in the alternative the complainant may seek condonation of delay invoking jurisdiction of Magistrate under the proviso to clause (b) of Section 142 of the N.I.Act. When the statute itself equally safeguarded the interest of both the accused and the complainant, the Court need not interpret the proviso either in favour of the complainant or in favour of the accused by adding or subtracting any words to penal provision, but it must be construed strictly based on principle of strict construction. If any other MSM,J Crl.Ps_12162, 12170 and 12172_2014 27 construction is made, it is against the intention of the legislature in incorporating clause (b) of the proviso to Section 142 and clause (c) of the proviso to Section 138 of the N.I.Act., which renders the Act ineffective to enforce the criminal liability against accused, who committed offence punishable under Section 138 of the N.I.Act, in the Court of law.
Turning to the facts of the present case, as shown in the table, the cheques were allegedly issued by the petitioner and on presentation of the cheques by the complainant, they were dishonoured and notices in compliance of clause (c) of the proviso to Section 138 of the N.I.Act were issued on specific dates and receipt of notices were acknowledged by the petitioner, but for one reason or the other, postal acknowledgments are not returned to the learned counsel for the complainant/respondent No.1. More diligently, learned counsel for the respondent No.1 addressed letters to the Superintendent of Post Offices complaining lapses of the postal department in returning postal acknowledgment and with great sense of responsibility, the Superintendent of Post Offices addressed letter intimating exact date of service of notice issued by the complainant to the petitioner within one month. Even by the date of receipt of information from the postal department, still more than 15 days time is available to file complaint from the date of cause of action arise under clause (c) of the proviso to Section 138 of the N.I.Act, but the complainant filed compliant beyond one month from the date of cause of action arose as per clause (c) of the proviso to Section 138 of N.I.Act and no petition is filed to condone delay invoking clause (b) of the proviso to Section 142 of the N.I.Act, which enables the complainant to seek condonation of delay subject to satisfaction of Magistrate. In the absence of condonation of delay, when the MSM,J Crl.Ps_12162, 12170 and 12172_2014 28 complaint is field beyond one month from the date of cause of action arose under clause (c) of the proviso to Section 138 of the N.I.Act, the same are hopelessly barred by limitation and taking cognizance by the Magistrate accepting the allegations made in the complaints on their face value is erroneous. Consequently, the proceedings are liable to be quashed.
In the result, the Criminal Petitions are allowed. The proceedings in C.C.Nos.153, 154 and 155 of 2013 on the file of Judicial Magistrate of First Class, Srungavarapu Kota, Vizianagaram District, are hereby quashed.
Consequently, miscellaneous applications pending if any shall stand closed.
________________________________________ JUSTICE M. SATYANARAYANA MURTHY 19.07.2019 Note:
L.R.Copy to be marked.
B/o Ksp