Karnataka High Court
Arun Hegde And Anr. vs M.J. Shetty on 8 March, 2001
Equivalent citations: 2002(1)ALT(CRI)553, [2001]106COMPCAS541(KAR), ILR2001KAR3295, 2001 AIR - KANT. H. C. R. 1274
Author: Mohamed Anwar
Bench: Mohamed Anwar
JUDGMENT Mohamed Anwar, J.
1. Heard learned counsel on both the sides.
2. This petition under Section 482 of the Criminal Procedure Code, 1973, is presented by the petitioners who are accused Nos. 2 and 3, in C. C. No. 13799 of 1997 pending on the file of the court below, praying to quash that criminal proceeding initiated against them on the complaint of the respondent for an offence under Section 138 of the Negotiable Instruments Act, 1881 ("the N.I. Act" for short).
3. The complaint allegations are that : the accused-petitioners happened to be the dealers of the product of M/s. Nicco Corporation Limited. The products of the said Corporation, which were purchased by the complainant and stocked with him as on January 21, 1997, were transferred to the office/godown of the accused, who, in turn, issued the cheque in question bearing No. 656816, dated March 31, 1997, drawn on State Bank of India, Attavara Branch, Man-galore, for Rs. 1,95,139 in the complainant's favour towards the value of the said materials. When the cheque was presented for encashment to the bank on April 2, 1997, the same bounced by it with its endorsement indicating the reason "insufficient fund", in the account of the accused. Then, the statutory demand notices dated April 11, 1997, were got issued by the complainant to all the three accused demanding payment of the cheque amount within fifteen days, failing which necessary legal action will be taken against them. When they failed to pay the said amount within fifteen days, the said complaint against them was filed by the complainant before the learned magistrate on May 6; 1995.
4. The main ground on which the criminal proceeding against the accused was sought to be quashed is that the complaint filed against them on May 6, 1995, before the learned magistrate is a premature complaint and, therefore, it is liable to be quashed. Learned counsel for the petitioner to substantiate this ground, argued that indisputably the said demand notice dated April 11, 1997, issued by the complainant was served on both the petitioner-accused Nos. 2 and 3, on April 21, 1997. Therefore, fifteen days period prescribed by proviso (b) to Section 138 of the Negotiable Instruments Act, for the accused to make payment of the cheque amount expired on May 6, 1997, and, therefore, the alleged offence against them could occur on the following date May 7, 1997. In that view of the matter, the complaint filed against them on May 6, 1995, was before accrual of the cause of action to the complainant and was premature. Reliance was sought to be placed on a single Bench decision of this court in the case of Ashok Hegde v. Jathin V. Attawan [1997] Crl. LJ 3691 in support of the contention that any such premature complaint is liable to be quashed in law.
5. Per contra, it was argued by learned counsel for the respondent-complainant that the said demand notice dated April 11, 1997, issued to accused No. 1-company, of which accused Nos. 2 and 3 are the directors, was in fact served on it on April 16, 1997, itself, though the said notices on accused Nos. 2 and 3 were served on April 21, 1997.
6. It was argued by Mr. R.B. Deshpande for the respondent-complainant that the service of demand notice on accused No. 1-company was sufficient notice to its directors-accused Nos. 2 and 3, as well since they were its directors. Support for this contention was sought to be drawn by him from a decision of the Calcutta High Court in the case of Dilip Kumar Jaiswal v. Debapriya Banerjee [1992] 73 Comp Cas 434 ; [1992] 1 Crimes 1233.
7. On consideration of the rival contentions, I find sufficient legal force in the submission of Mr. Deshpande, learned counsel for the respondent-complainant. Section 141 of the Negotiable Instruments Act deals with the offences by companies. It states that :
"Section 141. Offences by companies.--(I) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly . . ."
Sub-clause (b) of Section 138 envisages giving of the demand notice to the drawer of the cheque.
8. In the instant case, prima facie it transpires from the complainant allegations that the cheque in question had been jointly issued by accused Nos. 2 and 3 on behalf of accused No. 1-company in connection with the business transactions. Therefore, in the light of the relevant provisions contained in Sub-section (1) of Section 141 and Section 138, the position becomes clear that the service of demand notice on accused No. 1-company, shall be deemed to be also the service thereof on its directors, who are accused Nos. 2 and 3 (petitioners). The law to this effect is also laid down by the Calcutta High Court in Dilip Kumar Jaiswal v. Debapriya Banerjee [1992] 73 Comp Cas 434. It is held therein that a separate notice upon the executives or the directors is not required to be served for compliance with proviso (b) to Section 138 of the Negotiable Instruments Act for prosecuting them along with the company for the offence alleged to be committed by the company under Section 138 of the Negotiable Instruments Act. Therefore, in view of this emerging legal principle, the complaint filed in the instant case on May 6, 1997, was clearly after expiry of the fifteen days period next after service on April 16, 1997, of the demand notice stipulated in proviso (b) to Section 138. Thus the complaint filed on May 6, 1997, after accrual of cause of action on April 16, 1997, is a ripe and valid one.
9. Apart from the above, the point in controversy is no longer res integra, as it stands resolved by the authoritative pronouncement of the Supreme Court in a recent decision in the case of Narsingh Das Tapadia v. Goverdhan Das Partani [2000] 102 Comp Cas 146 ; AIR 2000 SCW 3268. Adverting to the relevant provisions under Sections 138 and 142 of the Negotiable Instruments Act, the Supreme Court, has at paragraphs 7 and 10 of its judgment, laid down (pages 148 and 149 . . . ) :
"The compliance of Clause (c) of proviso to Section 138 enables the court to entertain a complaint. Qause (b) of Section 142 prescribes a period within which the complaint can be filed from the date of the cause of action arising under Clause (c) of the proviso to Section 138. No period is prescribed before which the complaint cannot be filed, and if filed not disclosing the cause of action in terms of Clause (c) of the proviso to Section 138, the court may not take cognizance till the time the cause of action arises to the complainant. . . Mere presentation of the complaint in the court cannot be held to mean, that its cognizance had been taken by the magistrate. If the complaint is found to be premature, it can await maturity or be returned to the complainant for filing later and its mere presentation at an earlier date need not necessarily render the complaint liable to be dismissed or confer any right upon the accused to absolve himself from the criminal liability for the offence committed."
10. The Supreme Court has thus ruled that if the complaint is found to be premature, it can await maturity or be returned to the complainant for filing later and mere presentation at an earlier date need not necessarily render the complaint liable to be dismissed or confer any right upon the accused to absolve himself from the criminal liability for the offence committed. In view of this clear law so laid down by the Supreme Court, the objection raised for the petitioners-accused against maintainability of the complaint will have no legal force. For the same reason, the decision rendered by this court in the case of Ashok Hegde v. Jathin V. Attawan [1997] Crl. LJ 3691 could be no longer a good law.
11. There was no other substantive objection or ground of attack raised against the criminal proceeding initiated against the accused, meriting serious consideration.
12. Therefore, the petition is bound to fail and it fails.