Kerala High Court
Paramjith Singh vs N.C. Job on 18 October, 1989
Equivalent citations: [1990]67COMPCAS570(KER)
Author: K.T. Thomas
Bench: K.T. Thomas
JUDGMENT K.T. Thomas, J.
1. The petitioner is the proprietor of Man-Jog Investments which is a financial enterprise. Two cheques issued by the petitioner to the respondent were dishonoured by the drawee-bank. As the petitioner did not pay the amount covered by the two cheques, even after receiving notice of demand, the respondent filed a complaint alleging commission of an offence under Section 138 of the Negotiable Instruments Act, 1881 (for short, "the, Act"). The Magistrate who took cognizance of the offence issued summons to the petitioner. This criminal miscellaneous case is filed by the petitioner praying for quashing the complaint.
2. The two cheques in question were issued on December 31, 1988 (one for Rs. 7,272 and the other for Rs. 10,369). The cheques were presented for encashment, but the drawee-bank dishonoured them on April 30, 1989, with the endorsement "account closed". On May 6, 1989, the respondent issued a notice to the petitioner demanding payment of the amount covered by the dishonoured cheques. No amount was paid by the petitioner. Hence, the complaint was filed on May 29, 1989. These are the bare facts.
3. The complaint is sought to be quashed on two grounds : (1) Inasmuch as Section 138 of the Act came into force only on April 1, 1989, no prosecution is maintainable in respect of the cheques issued on December 31, 1988. (2) As the cheques were issued from Bangalore, the court at Ernakulam has no jurisdiction to try the offence.
4. The petitioner did not even appear before the court which issued summons to him where he could raise the objections regarding territorial jurisdiction. However, in view of Section 179 of the Code of Criminal Procedure (for short, "the Code"), the court within the limits of whose jurisdiction the consequence ensues has also territorial jurisdiction to try the case. Hence, it is not necessary to consider the question of jurisdiction now. Be that as it may, it is still open to the petitioner to raise the question of jurisdiction in the trial court, since I am not pronouncing my decision on that question in these proceedings finally. I will advert to the first point raised, as it involves a fundamental right embodied in Article 20(1) of the Constitution of India. It reads thus :
"No person shall be convicted of any offence except for violation of the law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence".
5. It cannot possibly be disputed, in the light of the clear constitutional safeguard that, if the facts constituting the offence had taken place before-introduction of Section 138 of the Act, the prosecution is bad and is liable to be quashed. Hence, the real question is whether the commission of offence under Section 138 of the Act is performed by drawing the cheques. Central Act 66 of 1988 by which Section 138 was inserted in the Act has been brought into force on April 1, 1989. It is contended that since the cheques were issued on December 31, 1988, the petitioner cannot be deemed to have committed the offence on any day subsequent to the introduction of Section 138 in the Act. The main body of Section 138 reads thus :
"Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part, of any debt or other liability, is returned by the bank unpaid either because of the amount of money standing to the credit of that 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque or with both."
6. The main body of the section is subject to the proviso which consists of three clauses. The proviso, says that "nothing contained in this section shall apply unless" there is compliance with the three conditions enumerated in the sub-clauses incorporated in the proviso. The first condition is that the cheque must have 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. The second condition is that the person who is entitled to get money under the cheque should have made a demand for payment of the amount covered by the cheque through a written notice addressed to the drawer within fifteen days of the return of the cheque. The third condition which is embodied in Clause (c) of the proviso is that the drawer of the cheque should have failed to make payment of the amount within fifteen days of receipt of the notice.
7. When the main body of the section is read along with the proviso, it is clear that the offence will be deemed to have been committed only if the drawer of the cheque failed to make the payment within fifteen days of receipt of the notice. An "offence" as defined in Section 2(n) of the Code includes not only the doing of a positive act but also by omitting to do something as well. Here the relevant provision says that the offence is the omission to make payment within fifteen days of the receipt of the notice.
Drawing the cheque is not the act by which the offence is deemed to have been committed. When the drawer fails to make the payment within the period specified in Clause (c) of the proviso, the offence is completed. This aspect is made further clear in Section 142(b) of the Act. Under the said clause, no court shall take cognizance of any offence punishable under Section 138 unless "such complaint is made within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138". Normally, a cause of action does not arise until the offence was committed. When Section 142(b) says that the cause of action is the one which arises under Clause (c) of the proviso, such cause of action is the omission to make payment within fifteen days of the receipt of the notice. Even otherwise, the commencing words in Section 138 are sufficiently indicative that the Legislature did not intend to treat the act of drawing the cheque as amounting to commission of the offence. If the intention was different, the Legislature would possibly have employed the words such as "whoever draws any cheque ..... .". Instead the statute has employed the words "where any cheque drawn by a person ....... is returned by the bank unpaid .......... .". Here the stress of the provision is on the fact of return of the cheque unpaid by the bank whereas drawing of the cheque has no emphasis except as a prefatory reference. Hence, the mere fact that the cheques in question were drawn prior to the date of commencement of Act 66 of 1988 is no reason to hold that the law was not in force at the time of commission of the offence under Section 138 of the Act. I, therefore, hold that the prosecution is not hit by Article 20(1) of the Constitution.
8. Criminal miscellaneous case is, accordingly, dismissed.