Gujarat High Court
Quality Engineering(Baroda) Private ... vs State Of Gujarat on 9 April, 2018
Author: Sonia Gokani
Bench: Sonia Gokani
R/CR.A/1680/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL APPEAL NO. 1680 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS JUSTICE SONIA GOKANI
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1 Whether Reporters of Local Papers may be allowed to Yes
see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
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QUALITY ENGINEERING(BARODA) PRIVATE LIMITED THROUGH
M.I.KHAN
Versus
STATE OF GUJARAT
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Appearance:
MR M T M HAKIM WITH MR MOHMEDSAIF HAKIM(5394) for the
PETITIONER(s) No. 1
MR ZUBIN BHARDA WITH MR DHRUV K DAVE(6928) for the
RESPONDENT(s) No. 2
MR H K PATEL, ADDL. PUBLIC PROSECUTOR(2) for the RESPONDENT(s)
No. 1
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CORAM: HONOURABLE MS JUSTICE SONIA GOKANI
Date : 09/04/2018
ORAL JUDGMENT
1. Present appeal is preferred by the appellant Page 1 of 21 R/CR.A/1680/2017 JUDGMENT aggrieved by the judgment and order dated 04.07.2017 passed in Criminal Case No.40498 of 2008 (Old Criminal Case No.948 of 2008) by the learned 10th Additional Chief Judicial Magistrate, Vadodara, whereby the Trial Court has acquitted the respondent No.2accused under Section 255 (1) of the Code of Criminal Procedure, 1973 for the offence punishable under Section 138 of the Negotiable Instruments Act, 1886 ('the N.I.Act' hereinafter). The appellant is the original complainant where as the respondent No.2original accused.
2. This Court while issuing notice for final disposal, called for Record and Proceedings. It had also been indicated that the decision of Damodar S. Prabhu vs. Sayed Babalal H, reported in (2010) 5 SCC 663 to attempt amicable settlement be emplaned into the matter. However, it appears that the same could not become possible and therefore, the matter was required to be adjudicated after hearing learned advocates Page 2 of 21 R/CR.A/1680/2017 JUDGMENT on both the sides.
3. Before this Court reflects upon the submissions made by learned advocates on both the sides, the brief facts bereft of elaborate details would be required to be considered. 3.1 It is the case of the complainantappellant that he was the Director of Quality Engineering (Baroda) Pvt. Ltd., which deals with the engineering works and the company is registered under the Companies Act, 1956. The respondent No.2 is a Proprietor of Quality Fabricators and Erectors. It is a company situated at New Mumbai and due to the business relationship the respondent No.2 had placed order of Thhairerote Welding Machine with the appellantcomplainant. The machines were supplied and for the payment against the same, the respondent No.2 had issued eight cheques of Bank of Baroda, Vashi Branch, New Mumbai. Those details are as follows:
SR NO. CHEQUE NOS. DATES AMOUNTS
1 896151 26.02.2008 Rs.3,00,000/
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2 896152 26.02.2008 Rs.3,00,000/
3 896153 26.02.2008 Rs.3,41,415/
4 896268 15.04.2008 Rs.1,50,000/
5 896269 15.05.2008 Rs.2,00,000/
6 896270 15.06.2008 Rs.2,00,000/
7 896271 15.07.2008 Rs.1,50,000/
8 896273 15.08.2008 Rs.2,41,415/
Total amount of
Rs.18,82,830/
3.2 When the cheques were presented in Bank of Baroda, Nava Yard Branch, Vadodara for clearance, on 18.08.2008 the cheques were dishonoured with the endorsement of insufficient fund. 3.3 The communication was addressed to the respondent No.2 on 18.08.2008 itself. However, no heed was paid to the same.
3.4 Therefore, the appellant issued a statutory legal notice on 04.09.2008, which also had not been replied to.
3.5 On expiry of statutory period, when no money was received nor was any response received from the respondent No.2, a complaint under Section Page 4 of 21 R/CR.A/1680/2017 JUDGMENT 138 of the N.I.Act had been lodged before the learned 10th Additional Chief Judicial Magistrate, Vadodara, which was registered as Criminal Case No.40498 of 2008.
4. After availing the parties due opportunities, this Court adjudicated the matter finally and held against the present appellant. Hence, the present appeal.
5. Essentially, it could be noticed that on the ground that the legal notice was issued on 18.08.2008 and as admitted in the cross examination such a communication was of dishonouring of the eight cheques, the Trial Court held it to be the case where no application was moved by the appellant for condoning the delay and therefore, on a technical ground of delay in filing the complaint, the Trial Court has acquitted the respondent No.2.
6. This Court has heard Mr.M.T.M.Hakim appearing for appellant, who has emphasized that this Page 5 of 21 R/CR.A/1680/2017 JUDGMENT judgment and order deserves quashment as there is no other ground on which the Trial Court could have acquitted the respondent No.2. He has urged that in the cross examination the appellant had fairly admitted that the appellant is having communicated to the respondent No.2 of the dishonoured of the cheuqes by a private communication and also had requested to make good the payment. He has further urged that subsequent notice issued was in a statutory compliance and the Trial Court could not have therefore laid its emphasis on the previous communication to oust the present appellant in a serious case like this. He further urged that the appellant as a layman also not clearly written as to under which provision he was issuing the notice, he, on the contrary, had pointed out that the communication reflects Section 138 of the Indian Penal Code. He was not legally qualified person and therefore, it has been the lodgment of the complaint on 10.10.2008 was well within limitation, since neither any payment was made after receipt of Page 6 of 21 R/CR.A/1680/2017 JUDGMENT notice dated 04.09.2008 nor was any reply given to the statutory notice. Heavy reliance is placed on the decision of the Apex Court rendered in case of Pawan Kumar Ralli vs. Maninder Singh Narula, reported in (2014) 15 SCC 245.
7. Per contra, Mr.Zubin Bharda, learned advocate appearing with Mr.Dhruv Dave, learned advocate appearing for the respondent No.2 has emphatically argued that no interference is desirable at the end of the Appellate Court when the view taken by the Trial Court is also permissible under the law. He has pointed out to this Court that soon after the Bank intimated the return of cheques due to insufficiency of the fund, the communication dated 19.08.2008 had been received from the appellant, wherein he had asked the respondent No.2 to make payment, and in default, he had specified that he would be taking legal action against him under Section 138 of Indian Penal Code, according to him, this misquoting would not have much bearing. The fact Page 7 of 21 R/CR.A/1680/2017 JUDGMENT remains that it was meant to be a notice as contemplated statutorily and hence, the lodgment of the complaint on 10.10.2008 would clearly bar the complaint. Therefore, the Trial Court was right in holding that any complaint, which had been filed beyond the period of 30 days, without moving any application for condonation of delay, would defeat the right of the parties and this being a requirement of the law, the Trial Court was right in acquitting the respondent No.2. He has also distinguished the decision of the Apex Court by urging that against the petition of quashing under Section 482 of the Code of Criminal Procedure, 1973, the High Court had exercised the powers where the issue of limitation was raised for the first time before the High Court. Whereas in the instant case, after recording of evidence the Trial Court has held against the appellant and therefore, these peculiar facts and circumstances would not permit the Court to follow the case of Pawan Kumar Ralli Page 8 of 21 R/CR.A/1680/2017 JUDGMENT (supra). He has also alternatively urged that in the event of this Court following the decision of Pawan Kumar Ralli(supra), the rights of the parties should be kept open which should include the rights to resist the application for condonation of delay. He has sought to rely upon the decision of the Apex Court rendered in case of Rakesh Kumar Jain vs. State through CBI, reported in (2007) SCC 66. Reliance is also placed on the decision of the Apex Court rendered in case of N.Paraeswaran Unni Versus G.Kannan, reported in (2017) 5 SCC 737. He has emphasized that twice the trial has proceeded as the first time when on the ground of the decision of Apex Court rendered in case of Nitinbhai Saevantilal Shah & Anr vs Manubhai Manjibhai Panchal & Anr, reported in (2011) 9 SCC 638 the de novo trial was directed and the second time when such trial was completed as per the direction of the Court and therefore, third time the matter may not be sent back to the Court concerned.
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8. Upon hearing learned advocates on both the sides, the decision of Pawan Kumar Ralli(supra) shall need to be regarded, which was a case where the High Court of Delhi had quashed the criminal proceedings initiated by the appellant before the Trial Court under Section 138 of the N.I.Act. The appellant had given a loan of Rs.60 Lakh to the respondent. In discharge of such obligation, the respondent on 25.04.2012 had issued three cheques. When presented in his Bank for realization, the cheques were dishonoured with the remark 'stop payment'.
8.1 On receiving communication from his Banker about such dishonour of the cheques, the appellant had issued a hand written notice to the respondent calling upon him to make payment on 27.04.2012.
8.2 Upon noncompliance, a formal legal notice was issued on 24.05.2012 under Section 138/142 of the N.I.Act, requesting the respondent to pay the Page 10 of 21 R/CR.A/1680/2017 JUDGMENT cheque amount with the cost and interest. The respondentaccused disagreed with the allegation of taking loan and naturally therefore, did not pay any amount. The appellant filed a complaint against the respondent and the cognizance was taken by the learned Metropolitan Magistrate. 8.3 During the pendency of such trial, the respondentaccused preferred Criminal Misc. Application before High Court of Delhi under Section 482 of the Code of Criminal Procedure, 1973 for quashing the criminal proceedings before the Trial Court. The High Court of Delhi took a view that the complaint was not filed within a period of one month after the expiry of 15 days of receipt of notice dated 27.04.2012 and hence, it was barred by limitation under Section 142 (b) of the N.I. Act.
8.4 Aggrieved appellant approached the Apex Court by way of Special Leave Petition. It was a contention of the appellant that the High Court of Delhi has incorrectly considered the hand Page 11 of 21 R/CR.A/1680/2017 JUDGMENT written notice as the legal notice and calculated the limitation period accordingly. Such note was only an intimation to the accused and the actual notice was issued on 24.05.2010. Therefore, the criminal proceedings were well within the time. Therefore, on merely the ground of 25 days of delay from the date of service of hand written note, the criminal proceedings have been closed. The High Court had overlooked the fact that if, there was a delay beyond 30 days, the same could have been condoned by the Court as provided under Section 142 (b) of the N.I.Act.
8.5 The Apex Court after examining the material on record concluded that the hand written notice issued firstly was the valid notice contemplated by the legislature. It also referred to the decision of the Apex Court rendered in case of Central Bank of India and Anr vs Saxons Farms and Others, reported in (1999) 8 SCC 221, which says that the object of the notice is to give a chance to the drawer of the cheque to rectify his Page 12 of 21 R/CR.A/1680/2017 JUDGMENT omission and also to protect an honest drawer. The Court also clarifies that there is no form of the notice prescribed in Clause (b) of the proviso to Section 138 of the N.I.Act. What all is required is that the notice shall be in writing within a period of 15 days on receipt of information from the Bank regarding return of the cheque as unpaid and in the notice, a demand for payment of the amount of the cheque has to be made. In the notice, which was sent there was a line "Kindly arrange to make the payment to avoid the unpleasant action of my client" and the Court held that this was a demand required by Clause
(b) of Section 138 proviso.
8.6 Accordingly, in the decision of Pawan Kumar Ralli (supra) the Apex Court held that keeping in mind the legislative intent and the specific plea of the appellant raised in the ground for Special Leave Petition that he should have been allowed to move an application for condonation of delay before the Trial Court as the respondent has not Page 13 of 21 R/CR.A/1680/2017 JUDGMENT suffered any prejudice by reason of 25 days of delay.
8.7 Apt would be to reproduce necessary findings and observations which are as follow:
"19. However, when the issue of limitation has come up for the first time before the High Court, it ought to have dealt with the same on merits as per proviso to Section 142(b) of the Act. The said proviso appended to clause (b) of Section 142 of the Act was inserted by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 and the legislative intent was, no doubt, in order to overcome the technicality of limitation period. The Statement of Objects and Reasons appended to the Amendment Bill, 2002 suggests that the introduction of this proviso was to provide discretion to the Court to take cognizance of offence even after expiry of the period of limitation [See MSR Leathers Vs. S. Palaniappan (2013) 1 SCC 177]. Only with a view to obviate the difficulties on the part of the Complainant, Parliament inserted the proviso to clause
(b) of Section 142 of the Act in the year 2002. It confers a jurisdiction upon the Court to condone the delay [See Subodh S. Page 14 of 21 R/CR.A/1680/2017 JUDGMENT Salaskar Vs. Jayprakash M. Shah (2008) 13 SCC 689].
20.It is no doubt true that at the time of filing the complaint, the Magistrate has to take cognizance of the complaint when it is within limitation and in case of delay in filing the complaint, the complaint has to come up with the application seeking condonation of delay. But, the peculiar fact of the present case is that in the complaint, the complainant had only averred that he has sent the legal notice dated 24th May, 2012 but not mentioned about the handwritten note dated 27th April, 2012.
Basing on the said averment, the learned Trial Judge was satisfied that the complaint is within the prescribed period of limitation. Hence, in this case, raising the plea of limitation and Court exercising the discretion to condone the delay did not arise at all.
21. In the peculiar facts and circumstances of the case, while keeping in mind the legislative intent and the specific plea of the appellant raised in the grounds for the Special Leave Petition that he should have been allowed to move an application for condonation of delay before the Trial Court as the respondent has not suffered any Page 15 of 21 R/CR.A/1680/2017 JUDGMENT prejudice by reason of 25 days delay, we strongly feel that the appellant should not have been deprived of the remedy provided by the Legislature. In fact, the remedy so provided was to enable a genuine litigant to pursue his case against a defaulter by overcoming the technical difficulty of limitation. Hence, the High Court has committed an error by not considering the issue of limitation on merits.
22. In view of the settled principles of law in Rakesh Kumar Jain, MSR Leathers. Subodh S. Salaskar (supra) and in the peculiar facts and circumstances of the case, we are of the considered opinion that the High Court was not right in quashing the complaint merely on the ground that complaint is barred by limitation, that too a plea which was taken for the first time before the High Court. On the other hand, the High Court ought to have remanded the matter to the Trial Court for deciding the issue of limitation. At the same time, we want to make it very clear that by this observation we are not laying down a legal proposition that without even filing an application seeking condonation of delay at an initial stage, complainant can be given opportunity at any stage of the proceeding. As already discussed by us in the foregoing Page 16 of 21 R/CR.A/1680/2017 JUDGMENT paragraphs, we have come to the irresistible conclusion, to afford an opportunity for the complainant to move an application seeking condonation of delay, under the peculiar facts and circumstances of the case.
23. For all the aforesaid reasons, in order to meet the ends of justice, we exercise our discretion under Article 142 of the Constitution and set aside the impugned judgment of the High Court quashing the criminal proceedings and restore the criminal proceedings before the Trial Court. The appellant is permitted to file an application for condonation of delay before the Trial Court and if such an application is filed, the Trial Court shall be at liberty to consider the same on its own merits, without being impressed upon by any of the observations by this Court, and pass appropriate orders."
9. This Court notices that such a plea for the first time has been taken in the cross examination of the appellant. At no stage, prior to the lodgment of the complaint either any response was given to the notice or any payment was made. The appellant for the first time, in the cross examination was asked about the Page 17 of 21 R/CR.A/1680/2017 JUDGMENT technicality of the limitation period. Such issue of limitation, thus, came up for the first time before the Trial Court in the cross examination, where the appellant had admitted of having issued the notice on 19.08.2008. When read the same, it says that for avoiding the legal action, respondent shall deposit the cheque amount of Rs.18,82,830/. Of course, there is a reference of Section 138 of the Indian Penal Code and not the N.I.Act in the said notice. This notice is by a layman, who later on realizing possibly his mistake, had chosen to issue the notice on 04.09.2008. If one takes the notice dated 19.08.2008, as the first notice, the complaint ought to have been filed latest by 03.10.2008, whereas the period of limitation counted from second notice from 04.09.2008. Complaint could have been filed upto the 19.10.2008, which has been instead filed on 10.10.2008. Going by the first notice, as the notice is in statutory compliance, there has been eight days' delay in preferring the complaint.
10. This Court is conscious of the fact that this Page 18 of 21 R/CR.A/1680/2017 JUDGMENT issue had not arisen out of any quashing petition that had been moved before this Court. It is also conscious of the fact that there are two rounds of adjudication arising from the very dishonour of the cheque. First time when the Trial Court had followed the direction of the higher Court and on account of direction of de novo trial, the earlier proceedings were quashed and set aside and the second round of adjudication had begun and yet the fact remains that no response has been given to the first notice or to the second notice. Even at that stage, when the Court took cognizance of the matter after the complaint was filed, no issue of limitation at any point of time has raised, except by referring to the first notice dated 19.08.2008 in the cross examination.
11. In such view of the matter, this Court firmly believes that the decision of the Pawan Kumar Ralli (supra) is required to be followed.
12. It is the trite law that the parties are Page 19 of 21 R/CR.A/1680/2017 JUDGMENT entitled to the decision on merit rather than to be defeated on a technical ground and therefore, it would be in the fitness of the things to quash and set aside the judgment and order of Trial Court.
13. Considering the long drawn litigation between the parties, opportunities were given to both the sides to take necessary instructions whether they needed to proceed before this Court on merit rather than being relegated to the Trial Court once again. However, the respondent No.2 has chosen to adopt the second course of being relegated to the Trial Court and therefore, without entering into the merits of the matter, this Court on quashing and setting aside the judgment and order dated 04.07.2017 passed in Criminal Case No.40498 of 2008 (Old Criminal Case No.948 of 2008) by the learned 10th Additional Chief Judicial Magistrate, Vadodara, directs the parties to approach the Court of learned 10th Additional Chief Judicial Magistrate, where the Page 20 of 21 R/CR.A/1680/2017 JUDGMENT appellant is permitted to move an application for condonation of delay.
14. For the foregoing reasons, judgment and order dated 04.07.2017 passed in Criminal Case No.40498 of 2008 (Old Criminal Case No.948 of 2008) by the learned 10th Additional Chief Judicial Magistrate, Vadodara is quashed and set aside by directing the parties to approach the Court of learned 10th Additional Chief Judicial Magistrate, where the appellant is permitted to move an application for condonation of delay. The right of the parties to contest this application is open. No order as to costs.
With the above direction, present appeal is disposed of accordingly. Direct Service is permitted.
(MS SONIA GOKANI, J) M.M.MIRZA Page 21 of 21