Bangalore District Court
Tata Motors Finance Ltd vs Murugesh C on 15 April, 2019
IN THE COURT OF THE XVII ADDL. JUDGE, COURT OF
SMALL CAUSES &
ADDL. CHIEF METROPOLITAN MAGISTRATE,
MAYO HALL UNIT, BENGALURU (SCCH-21).
Dated: This the15th Day of April 2019
PRESENT: Smt.VANI A. SHETTY, BA.Law, LL.B,
XVII ADDL. JUDGE, Court of Small
Causes & ACMM, Bengaluru.
C.C. No.50832/2018
Complainant/s : TATA Motors Finance Ltd.,
No.45, Prestige Libra, 3rd floor,
Lalbagh Road, Bengaluru-560027
Landmark: Above Regional Passport office
Rept: By its State Collection Manager
Mr. Raghavendra M.C.,
(By S.A. Associates)
V/s.
Accused/s : Murugesh C., Major,
No.135, Bhattaramarenahalli,
Budigere Post,
Devanahalli Taluk,
Near Water Tank,
Bangalore - Ka-562129.
((By Sri/Smt. D.G.R., Advocate)
JUDGEMENT
The accused in this case is tried for the offence punishable under Section 138 of Negotiable Instrument Act 1881, on the complaint of the complainant.
SCCH-21 2 C.C. No.: 50832/182. The summary of the complainant's case is that:
The accused took vehicle loan from the complainant and towards discharge of sum of Rs.5,38,620/-, issued a cheque in favour of the complainant bearing No.018061 dated 15.07.2017 for Rs.5,38,620/- drawn on Cauvery Kalpatharu Grameena Bank, Mylanahally branch, assuring that the cheque would be honoured if presented for payment. The complainant presented the said cheque for encashment through its banker HDFC bank, Richmond Road branch, Bengaluru, on 17.07.2017. But the said cheque came to be dishonoured on the ground of 'Funds Insufficient' on 18.07.2017. Thereafter, on 29.07.2017 complainant got issued legal notice through RPAD demanding for repayment of the cheque amount within 15 days from the date of receipt of the notice. The notice sent through RPAD was returned as 'not claimed' on07.08.2017. The accused has not paid the amount and therefore, this complaint filed on 30.08.2017.
3. On filing of the complaint cognizance was taken for the offence punishable under section 138 of N.I. Act and sworn statement was recorded. As there was sufficient ground to proceed further, a criminal case has been registered against the accused and he was summoned. The substance of accusation is orally stated to the accused and his plea was recorded. Accused pleaded not guilty and submitted that he has defence to make.
4. In support of the complainant's case, GPA holder of the complainant got examined himself as P.W1 and got marked 7 documents as per Ex.P1 to Ex.P7. The statement SCCH-21 3 C.C. No.: 50832/18 of the accused is recorded under Section 313 of Cr.P.C and his answers were recorded. The accused submitted that he has defence evidence and got examined himself as DW.1 and got marked Ex.D1 and Ex.D2 documents.
5. Heard the arguments and perused the written arguments submitted by the complainant and accused.
6. The points that arise for my consideration are:
1. Whether the complainant proved that accused has committed an offence punishable under Section 138 of N.I. Act 1881?
2. What order?
7. My answer to the above points is as follows:
Point No.1 : In the Affirmative,
Point No.2 : As per final order for
the following:
REASONS
8. POINT No.1: In order to constitute an offence
under Section 138 of N.I. Act, the cheque shall be presented to the bank within a period of 3 months from its date. On its dishonor, the drawer or holder of the cheque as the case may be shall cause demand notice within 30 days from the date of dishonor, demanding to repay within 15 days from the date of service of the notice. If the drawer of the cheque fails to repay the amount mentioned in the cheque within 15 days from the date of service of notice, cause of action arises for filing complaint.
SCCH-21 4 C.C. No.: 50832/189. The GPA holder of the complainant filed affidavit in lieu of his oral chief examination. In the affidavit, the he has testified regarding lending of vehicle loan, issuance of cheque, issuance of demand notice and also failure of the accused to pay the cheque amount. The complainant has produced cheque bearing No018061 dated 15.07.2017 for Rs.5,38,620/- drawn on Cauvery Kalpatharu Grameena Bank, Mylanahalli branch, alleged to be issued by the accused. Ex.P1 stands in the name of complainant for Rs.5,38,620/-. Ex.P2 is the endorsement issued by the bank stating dishonor of Ex.P1 cheque. Ex.P2 shows that Ex.P1 was dishonoured for 'Funds Insufficient'. Ex.P3 is the office copy of legal notice dated 29.07.2017. Ex.P4 is the postal receipt for having sent legal notice to the accused and Ex.P5 is the returned postal cover.
10. In the present case, cheque is dated 15.07.2017. Ex.P2 shows that the cheque was presented on 17.07.2017 i.e., within three months from the date of cheque. Ex.P2 further shows that cheque in question was dishonoured on 18.07.2017. The notice was issued within the statutory period of time. The notice was returned as 'not claimed' on 07.08.2017 as per Ex.P5 postal cover. The accused has admitted his address as stated in the complaint and notice. On the other hand, the notice sent under the address of accused returned with an endorsement not claimed. That itself shows that though the intimation delivered to the accused, he has failed to collect it. The learned counsel appearing for the accused in this regard relied upon the decision rendered in the case of Devi Prasad Rai vs. A.M.Ganesh Rai (2005(3)KCCR 1576) and D.Vinod Shivappa SCCH-21 5 C.C. No.: 50832/18 vs. Nanda Belliappa ((2006) 6 SCC 456). However, the Hon'ble Supreme Court in the decision rendered in the case of Alavi Haji vs. Palapetty Muhammed(2007(6) SCC 555), held that when a notice is returned with postal endorsement refused or unclaimed, due service has to be presumed. Further, in Para No.17 of the judgment, the Hon'ble Supreme Court has held as hereunder:
"It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of criminal law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can within 15 days of receipt of summons from the court in respect of the complaint under section 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and therefore, the complaint is liable to be rejected. As person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under section 138 of the Act cannot be obviously contend that there was no proper service of notice as required under section 138, by ignoring statutory presumption to the contrary under section 27 of the G.C. Act and Section 114 of the Evidence Act in our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskar's case (supra), if the 'giving of notice in the context of clause(b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape consequences of Sec.138 of the Act."
The above 3 judge decision of the Hon'ble Supreme Court is the law of land which is required to be followed by this court. As per the decision, even notice was not actually received by the accused, on receipt of summons/notice by the Court, he can pay the cheque amount within 15 days.
SCCH-21 6 C.C. No.: 50832/18Therefore the accused cannot take up this contention. The cause of action for filing the complaint arose on 23.08.2017. The complainant has filed this complaint on 30.08.2017 i.e. within 30 days from the date of arisal of cause of action. In this way the complainant has complied all the mandatory requirements of Section 138 & 142 of N.I. Act.
11. Section 118 of N.I. Act lays down that, until the contrary is proved, it shall be presumed that every Negotiable Instrument was made or drawn for consideration. Section 139 of N.I. Act, contemplates that unless the contrary is proved, it shall be presumed that the holder of the cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole of any debt or liability. In the decision reported in 2001 Crl.L.J. page 4647 (SC) (Hiten P.Dalal -Vs- Bratindranath Banerjee) and in various other decisions of Hon'ble Supreme Court and our Hon'ble High Court, repeatedly observed that in the proceeding under Section 138 of N.I. Act the complainant is not required to establish either the legality or the enforceability of the debt or liability since he can avail the benefit of presumption under Section 118 and 139 of N.I. Act in his favour. It is also observed that, by virtue of these presumptions, accused has to establish that, the cheque in question was not issued towards any legally enforceable debt or liability. Later in the year 2006, the Hon'ble Supreme Court in the decision M.S. Narayan Menon @ Mani
-vs- State of Kerala and another (2006 SAR Crl. 616) has held that, the presumption available under Section 118 and 139 of N.I. Act can be rebutted by raising a probable defence and the onus cast upon the accused is not as heavy as that SCCH-21 7 C.C. No.: 50832/18 of the prosecution. It was compared with that of a defendant in civil proceedings. Subsequently, in the year 2008, in Krishna Janardhana Bhat -Vs- Dattatreya G. Hegde (2008 Vo.II SCC Crl.166) Hon'ble Supreme Court has held that, existence of legally recoverable debt is not a presumption under Section 138 of N.I. Act and the accused has a constitutional right to maintain silence and therefore, the doctrine reverse burden introduced by Section 139 of N.I. Act should be delicately balanced.
12. In the decision, Rangappa - Vs - Mohan (AIR 2010 SC 1898) Hon'ble Supreme has considered this issue and clarified that, existence of legally recoverable debt or liability is a matter of presumption under section 139 of N.I. Act. In para 14 of the judgment the Hon'ble Supreme Court observed as here below:
"In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a SCCH-21 8 C.C. No.: 50832/18 strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. "
13. In view of the above decision, now it is clear that the presumption mandated by Section 139 of N.I. Act does indeed include the existence of legally enforceable debt or liability. It is a rebuttable presumption. It is open to the accused to raise the defence wherein the existence of legally enforceable debt or liability can be contested. For rebutting presumption, the accused do not adduce evidence with unduly high standard of proof but, the standard of proof for doing so with that of preponderance of probabilities. If the SCCH-21 9 C.C. No.: 50832/18 accused is able to raise a probable defence, which creates doubt about the existence of legally enforceable debt or liability, the onus shifts back to the complainant. It is also clear for rebutting the presumption accused can rely on the materials submitted by the complainant or his cross- examination and he need not necessarily adduce his evidence in all the cases.
14. In the present case, complainant has complied all the mandatory requirements of Section 138 and 142 of N.I. Act by producing the documents and evidence. As per the case of the complainant, the complainant company being the public limited company disbursed the loan to the account No.5001282412 to the accused on his application for purchase of vehicle. Further, towards the repayment of loan amount, accused issued Ex.P1 cheque and when it was presented for encashment, it came to be dishonored. The accused has admitted the availment of loan from the complainant to purchase vehicle from Prerana motors. He has also contended that, at the time of availing loan, he issued 9 signed blank cheques on 24.05.2013. He has also admitted that, he had used the vehicle for a month and thereafter the complainant company seized it.He has admitted that, he has not repaid the loan amount to the complainant.
15. One of the contention raised by the accused is that, the transaction was civil in nature and therefore, prosecution under section 138 of N.I. Act is not maintainable. In support of the contention, the accused SCCH-21 10 C.C. No.: 50832/18 also placed reliance on the decision of Hon'ble Gujarat High Court rendered in the case of Shanku Concrets Pvt., Ltd., and others vs. State of Gujarat and another (2001 DCR
100). The facts in the said case found in Para No.12 and 13 of the judgment which reads as hereunder:
12. Considering the facts and circumstances of this case, the answer to the above question must be in the negative because as per the agreement executed between the parties, liability which was to be discharged within the meaning of Sec.138 of the Negotiable Instrument act, was still to be arisen only on 05.12.1995 i.e. after the six months of the execution of the contract. This clearly denotes that when the cheques were delivered, there was no liability on the part of the accused to discharge any debt."
13. The above view further strengthen from the agreement executed between the parties. It is amply clear in the agreement that accused shall repay the amount after six months of the execution of agreement and it is also made it clear that for the due performance (in Gujarati Vernacular matter is omitted) is mentioned in the agreement) of the contract. The intention of the parties is clear from this averments that the cheques were issued as the collateral security for the due performance of the contract, by which the Company and the Director i.e. accused No.2 bound themselves to repay the said amount. It is, therefore, clear that cheques were not issued to discharge any existing debt."
The fact of the above case clearly shows that as on the date of presentation of cheque, there was no subsisting liability. But in the present case, since the accused has admitted the availment and non-repayment of loan, the facts in said case are totally different from the present case. Hence, the reliance placed on the said decision is misconceived.
SCCH-21 11 C.C. No.: 50832/1816. The next contention raised by the accused is that, complainant has not submitted the income tax return particulars. In support of the same, accused placed reliance on the decision of Hon'ble Delhi High Court rendered in the case of Devendra Kumar vs. Khem Chand (2016 (1) DCR
147). In the present case, accused has admitted the availment of loan. Therefore, the complainant need not produce the income tax return particulars. Hence, the said decision is no where helpful to the present case.
17. Accused has contended that, the complainant has seized his vehicle and the same is not taken into consideration. But, the seizure is denied by the complainant. There is nothing on record to show that vehicle was seized by the complainant. The accused claims that, he had run the vehicle only for a month and by that time, the complainant seized the vehicle. This contention is totally improbable and the complete inaction and silence of the accused speaks otherwise. Therefore, the seizure of the vehicle by the complainant is not proved. The accused has also contended that the complainant has not got registered the vehicle in his name. There was no obligation on the part of the complainant to register the vehicle in the name of the accused. It is the duty of the accused to register the vehicle in his name. Accused has admitted the delivery of the vehicle to him and use of vehicle for a period of one month. That being the case, it was his duty to get it registered in his name.
SCCH-21 12 C.C. No.: 50832/1818. The main contention raised by the accused is that liability is barred by limitation as the proceedings were not instituted within the period of 3 years from the date of cause of action to sue. In this regard, learned counsel appearing for the accused placed reliance on the decision of our Hon'ble High Court rendered in the case of Vishnudas vs. Mr.Vijaya Mahantesh (ILR 2007 KAR 1708) and unreported decision rendered in the case of K.N.Raju vs. Manjunath T.V. (Criminal Appeal No.302 of 2010 dated 16.03.2018). In view of this contention, this court is required to deal with both factual and legal aspects in this regard.
19. As per the case of the complainant, the loan of Rs.3,34,000/- was advanced to the accused on 28.06.2013 and period for repayment of loan was 4 years. If that period of 4 years is taken into consideration from the date of advancement of loan, it expires on 28.06.2017. The legal proceedings should be initiated within the period of 3 years from the date of expiry of time fixed for repayment. The period fixed for the complete repayment was expired on 28.06.2017. Therefore, the legal proceedings should have been initiated within 3 years thereafter. On this context, the period of limitation is calculated from the presentation of cheque on 17.07.2017 and filing of the complaint on 30.08.2017, is within the period of limitation. But, if there was a specific condition that the loan installment should have been paid on monthly installment with fixed month and amount, the circumstances would be different. In the present case, the accused has not contended that, the SCCH-21 13 C.C. No.: 50832/18 particular number of installments was required to be paid on specific date/month. If that was the situation, the liability/installment which was supposed to be paid for more than 3 years prior to the filing of the complaint would have been barred by limitation. At any rate, the installments which were required to be paid within the period of 3 years from the date of institution of present complaint is not at all barred by law of limitation. If the accused has given the particulars of total amount of installment which was to be mandatorily paid prior to 3 years from the date of presentation of complaint i.e. before 30.08.2014, that amount could have been calculated from the total amount of liability. It was the burden of the accused to give such calculation. The statement of account produced by the complainant along with memo on 26.03.2019 shows that, total loan liability is Rs.7,23,116.16. Since the complainant has not offered it in his evidence, I do not like to say further on this aspect.
20. It is also relevant to mention here the legal principle that, the limitation bars the remedy but not the right. In other words, the limitation act does not destroy or extinguish the right. It is also settled law that, if a debtor pays the amount of first installment after it has become barred or if he pays an amount without specifying towards which of the installment it may be credited and if the creditor applies it to the installment which was barred under law, by exercising the principle that limitation bars the remedy but not the right, he will be fully justified in doing so. This concept is required to be applied taking into SCCH-21 14 C.C. No.: 50832/18 consideration Sec.20 of the Negotiable Instrument Act, 1881. In the present case, the accused stated to have issued Ex.P1 cheque leaf duly signed on 28.06.2013. By virtue of Sec.20 of Negotiable Instrument Act, it is an authority to the complainant to fill up it. It was an unconditional authority. In this regard, it is relevant to refer the recent decision of Hon'ble Supreme Court rendered in the case of Bir Singh vs. Mukesh (2019 SCC online SC 138), wherein it is observed as hereunder:
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
39. It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent- accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. The second question is also answered in the negative.SCCH-21 15 C.C. No.: 50832/18
40. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
42. In the absence of any finding that the cheque in question was not signed by the respondent-accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant-complainant, it may reasonably be presumed that the cheque was filled in by the appellant-complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration. There was no change in the amount of the cheque, its date or the name of the payee. The High Court ought not to have acquitted the respondent- accused of the charge under Section 138 of the Negotiable Instruments Act.
In view of above legal and factual position, it is clear that the liability was existing to an extent of Rs.5,38,620/- as on the date of presentation of cheque and filing of the complaint. The accused had authorized the complainant to fill the cheque and present it for encashment. Therefore, the complainant had exercised its right by presenting the cheque and on its dishonor it resulted into an offence
21. While considering the question of limitation, the court must borne in mind the special features of a cheque. Sec.25(3) of Indian Contract Act, 1872 is also relevant for the issue in dispute. The cheque can be presented and enforced even for a time barred debt. In this regard, I rely upon the decision of Hon'ble High Court rendered in the SCCH-21 16 C.C. No.: 50832/18 case of H.Narasimha Rao vs. R. Venkataram (ILR 2006 KAR 4242), wherein the Hon'ble High Court has observed as hereunder:
10. Admittedly, the loan transaction took place in the month of May, 1994. The accused issued two cheques one cheque dated 15.5.1999 for a sum of Rs. 50,000/- and another cheque dated 25.5.1999 for a sum of Rs. 10,000/-(both drawn on Bangalore City Co-operative Bank Limited, Bangalore,) in favour of the complainant towards discharge of the loan amount. As on 12.6.1997, the entire debt of Rs.
60,000/- had become time barred, but there is no legal bar for the debtor agreeing to pay the time barred debt. No fresh consideration is required for debtor's promise to pay the time barred debt. There is moral obligation on the accused, who is none other than the friend of the complainant, to refund the loan amount. It would be useful to refer to the observation made by Lord Mansfield, in Hawkers v. Saunders (1782) 98 ER 1091 which reads as under:
Where a man is under a legal or equitable obligation to pay, the law implies a promise, though none was ever actually made. A fortiori, a legal or equitable duty is a sufficient consideration for an actual promise. Where a man is under a moral obligation, which no Court of Law or Equity can enforce, and promises, the honesty and rectitude of the thing is a consideration. As if a man promises, to pay a just debt, the recovery of which is barred by the Statute of Limitations; or, if a man, after he comes of age, promises to pay a meritorious debt contracted during his minority, but not for necessaries; or if a bankrupt, in affluent circumstances after his certificate, promises to pay the whole of his debts; or if a man promises to perform a secret trust, or a trust void for want of writing, by the Statute of Frauds.SCCH-21 17 C.C. No.: 50832/18
In such and many other instances, though the promise gives a compulsory remedy, where there was none before either in law or equity; yet as the promise is only to do what an honest man ought to do, the ties of conscience upon an upright mind are a sufficient consideration.
11. The Hon'ble Apex Court in A.V. Murthy v.
B.S. Nagabasavanna, supra, has made an observation in para-5 of the judgment as under:
...Under Section 118 of the Act, there is a presumption (hat until the contrary is proved, every negotiable instruments was drawn for consideration. Even under Section 139 of the Act, it is specifically stated that it shall be presumed, unless the contrary is proved that, the holder of a cheque received the cheque of the nature referred to in Section 138 of discharge, in whole or in part, of any debt or other liability. It is also pertinent to note that under Sub- section (3) of Section 25 of the Indian Contract, 1872, a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits, is a valid contract....
12. The Division Bench of the Kerala High Court in Ramakrishnan case, supra, following the ratio laid down in the A. V. Murthy's case, supra, held that when a person writes, signs and delivers a cheque to another it is an acknowledgement of a legally enforceable liability and therefore, if the cheque is dishonoured such a person shall not be entitled to plead that at the time of his writing the cheque the claim had become barred by limitation and thus, he is not liable to be punished under Section 138 of the Act.
If a cheque leaf is signed and delivered either without mentioning the date or with a post date, it is only a bill of SCCH-21 18 C.C. No.: 50832/18 exchange and so long the same remains a bill of exchange, the provision of Sec.138 of N.I. Act is not applicable to the said instrument. The undated/post dated cheque leaf becomes a cheque within the meaning of Sec.138 of N.I.Act on the date which it is written thereon. This is because, under Section 6 of Negotiable Instrument Act, a cheque is also a bill of exchange. But it is drawn on a banker and payable on demand. An undated or post dated cheque is not payable till the date written on it arrives and will become cheque on the said date and prior to that date, same remains as a bill of exchange. In other words, effect of issuing a post dated cheque is equivalent to giving a promissory note not payable until the date written on the cheque. In this regard, it is relevant to refer 3 judge bench decision of Hon'ble Supreme Court rendered in the case of Ashok Yeshwanth Badave vs. Surendra Madhavarao Nighojakar and another ((2001) 2 SCC 726), wherein the Hon'ble Supreme Court has observed as hereunder:
19. From a bare perusal of Sections 5 and 6 of the Act it would appear that a bill of exchange is a negotiable instrument in writing containing an instruction to a third party to pay a stated sum of money at a designated future date or on demand.
On the other hand, a "cheque" is a bill of exchange drawn on a bank by the holder of an account payable on demand. Under Section 6 of the Act a "cheque" is also a bill of exchange even though drawn on a banker, if it is not payable on demand, it is not a cheque. A "post-dated cheque" is not payable till the date which is shown thereon arrives and will become cheque on the said date and prior to that date the same remains bill of exchange.
20. For prosecuting a person for an offence under Section 138 of the Act, it is inevitable that the SCCH-21 19 C.C. No.: 50832/18 cheque is presented to the banker within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier. When a post-dated cheque is written or drawn, it is only a bill of exchange and so long the same remains a bill of exchange, the provisions of Section 138 are not applicable to the said instrument. The post-dated cheque becomes a cheque within the meaning of Section 138 of the Act on the date which is written thereon and the 6 months' period has to be reckoned for the purposes of proviso(a) to Section 138 of the Act from the said date. Thus while respectfully agreeing with the law laid down by this Court in the case of Anil Kumar Sawhney, we hold that six months period shall be reckoned from the date mentioned on the face of the cheque and not any earlier date on which the cheque was made over by the drawer to the drawee."
This position of law is reiterated in the subsequent decision of Hon'ble Supreme Court rendered in the case of A.R.Dahiya vs. Securities and Exchange Board of India ((2016)14 SCC 370) and Sampelly Satyanarayana Rao vs. Indian renewable Energy development agency ltd ((2016) 4 SCC 458).
22. It is also relevant to refer decision of Hon'ble Supreme Court rendered in the case of Jiwanlal Achariya vs. Rameshwarlal Agarwalla (AIR 1967 SC 1118,) wherein Hon'ble Supreme Court has made it clear that the payment for the purpose of Sec.20 would be the date on which the cheque would be actually payable and observing so, the Hon'ble Supreme Court had held that the suit filed on the basis of date of cheque was within time. In view of this discussions and decision rendered in the case of Ashok Yeshwanth Badave as referred above, are the law of land SCCH-21 20 C.C. No.: 50832/18 and operates as binding precedents. Therefore, I am unable to rely upon the decisions relied upon by the learned counsel appearing for the accused.
23. In view of the above reasons, there are no materials to come to the conclusion that, the amount mentioned in the cheque is barred by limitation. Therefore, the complainant has proved the guilt of the accused for the offence punishable under Section 138 of N.I.Act. Accordingly, I answer Point No.1 in the AFFIRMATIVE.
24. POINT No.2: Section 138 of N.I. Act empowers the Court to sentence the accused upto two years and also to impose fine which may extend to twice the amount of cheque or with both. This cheque in question was issued on 15.07.2017 for Rs.5,38,620/-(Rupees five lakhs thirty thousand six hundred and twenty only). The complainant was deprived of money that was rightfully due to it for a period of more than one and half year. However, having regard to the facts of the case and the amount involved, there are no warranting circumstances to award the sentence of imprisonment as substantive sentence. Directing the accused to pay fine and also awarding compensation to the complainant would meet the ends of justice. But adequate default sentence shall have to be imposed to ensure the recovery of fine imposed to the accused. Therefore, the complainant is required to be suitably compensated as per Section 80 and 117 of the Negotiable Instrument Act and also appropriate in default sentence. Having regard to all these fact, I pass the following:
SCCH-21 21 C.C. No.: 50832/18ORDER Acting under Sec.265 of Cr.P.C, the accused is found guilty for the offence punishable under Sec.138 of N.I. Act and he is sentenced to pay a fine of Rs.6,00,000/- (Rupees six lakhs only). In default to pay fine, the accused shall undergo simple imprisonment for a period of one year.
Further, acting under Section 357(1)(b) of Cr.P.C., out of the fine amount, a sum of Rs.5,90,000/- (Rupees five lakhs ninety thousand only) on recovery shall be paid as compensation to the complainant.
The office is directed to supply a free copy of judgment to the accused.
(Dictated to the Stenographer directly on computer, typed by her, same is corrected, signed and then pronounced by me in the open court on this the 15th day of April 2019) (VANI A. SHETTY) XVII ADDL. JUDGE, Court of Small Causes & Addl. CMM, Mayo Hall Unit, Bengaluru.
ANNEXURE List of witnesses examined on behalf of the complainant:
P.W 1: A. Panduranga Kini SCCH-21 22 C.C. No.: 50832/18 List of documents exhibited on behalf of the complainant:
Ex.P.1 : Cheque Ex.P.2 : Bank endorsement Ex.P.3 : Copy of Demand notice Ex.P.4 : Postal receipt Ex.P.5 : Postal cover Ex.P.6 & 7 : Notarised Copy of GPA
List of witnesses examined on behalf of the accused:
DW.1 : Murugesh List of documents exhibited on behalf of the accused:
Ex.D1 & 2 : Acknowledgements
(VANI A. SHETTY)
XVII ADDL. JUDGE,
Court of Small Causes &
Addl. CMM, Mayo Hall Unit,
Bengaluru.
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