Kerala High Court
K.M.Narayanan vs State Of Kerala on 12 September, 2012
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS
FRIDAY, THE 21ST DAY OF JULY 2017/30TH ASHADHA, 1939
Crl.MC.No. 1240 of 2017 ()
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CC 606/2016 OF JUDICIAL FIRST CLASS MAGISTRATE COURT-II,
THRISSUR
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PETITIONER(S)/ACCUSED:
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1. K.M.NARAYANAN
AGED 67, S/O. DHODA MANA NARAYANAN EMBRANTHIRI,
RAJ BHAVAN, MEIKKAD DESOM, NEDUMBASSERY P.O., ALUVA.
2. LAKSHMI.,
AGED 57 YEARS, W/O. SRI.K.M.NARAYANAN, DO.DO.
BY ADVS.SRI.S.EASWARAN
SRI.P.MURALEEDHARAN (IRIMPANAM)
SRI.M.A.AUGUSTINE
SRI.P.SREEKUMAR (THOTTAKKATTUKARA)
SMT.SOUMYA JAMES
RESPONDENT(S)/STATE & COMPLAINANT:
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1. STATE OF KERALA
REPRESENTED BY THE PUBLIC PROSECUTOR,
HIGH COURT OF KERALA, ERNAKULAM, KOCHI - 682 031.
2. SREE GOKULAM CHITS AND FINANCE COMPANY PRIVATE LIMITED
HEAD OFFICE AT 66, ARCOT ROAD,
KODAMBAKKAM, CHENNAI - 600 024, DIVISIONAL OFFICE M.G.ROAD,
THRISSUR - 680 001, REPRESENTED BY
BUSINESS MANAGER A. SASIDHARAN, S/O. VELLIYAT GOPALAN NAIR,
KODANNUR DESOM, THRISSUR TALUK.
R1 BY PUBLIC PROSECUTOR SRI. JESTIN MATHEW
R2 BY ADVS. SMT.N.SUDHA (BY ORDER)
SRI.K.S.BABU
SMT.N.SUDHA
SRI.BABU SHANKAR
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD
ON 21-07-2017, THE COURT ON THE SAME DAY PASSED THE
FOLLOWING:
sdr/-
Crl.MC.No. 1240 of 2017 ()
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APPENDIX
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PETITIONER(S)' ANNEXURES
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ANNEXURE A1 COPY OF PLAINT IN OS NO. 298/2012 DATED 12.9.2012 ON THE
FILE OF THE SUBORDINATE JUDGE'S COURT, OTTAPALAM.
ANNEXURE A2 COPY OF JUDGMENT DATED 19.9.2015 IN OS NO. 298 OF 2012
OF THE SUBORDINATE JUDGE, OTTAPALAM.
ANNEXURE A3 COPY OF CHEQUE NO. 015110 DATED 09.1.2013.
ANNEXURE A4 CERTIFIED COPY OF COMPLAINT DATED 20.3.2013 CC NO. 606 OF
2016 PENDING ON THE FILE OF THE JUDICIAL MAGISTRATE OF
FIRST CLASS - II, THRISSUR.
ANNEXURE A5 COPY OF STATEMENT OF ACCOUNT RELATING TO THE DISPUTED
ACCOUNT OF THE PETITIONERS.
ANNEXURE A6 COPY OF THE MEMO DATED 01.12.2013 ISSUED BY FEDERAL BANK
LIMITED, THRISSUR MAIN BRANCH.
RESPONDENT(S)' ANNEXURES NIL
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/TRUE COPY/
PA TO JUDGE
sdr/-
C.R.
ALEXANDER THOMAS, J.
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Crl.M.C.No.1240 of 2017
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Dated this the 21st day of July, 2017
O R D E R
The two petitioners herein are accused for the offence punishable under Section 138 of the Negotiable Instruments Act in C.C.No.606 of 2016 on the file of the Judicial First Class Magistrate Court-II, Thrissur, instituted on the basis of a complaint filed by the second respondent Chit Company.
2. The dishonoured cheque dated 9.1.2013 is for Rs.56lakhs drawn from a joint account of both the accused maintained in the State Bank of Travancore, Thottakkattukara Branch. According to the averments in the complaint, the said cheque has been issued by the accused to discharge the liability owed by them in a transaction with the second respondent Chit Company. Annexure-A4 is the copy of the abovesaid complaint dated 20.3.2013 which has led to the institution of C.C.No.606 of 2016. The prayer in this Crl. Miscellaneous Case is for quashing the abovesaid complaint.
3. Heard Sri.S.Easwaran, learned counsel appearing for the petitioners/accused, Smt.N.Sudha, learned counsel appearing for Crl.M.C.No.1240/17 ::2::
R2/complainant and Sri.Jestin Mathew, learned prosecutor appearing for R1/State.
4. Among the various contentions urged on behalf of the petitioners, Sri.S.Easwaran, learned counsel appearing for the petitioners, has also raised a contention that the impugned Annexure-A4 complaint is said to be filed on 20.3.2013, whereas Annexure-A6 memo which is said to have been issued by the collection Bank of the complainant (Federal Bank Ltd., Thrissur Main Branch) is on 1.12.2013 wherein the date of the presentation of the dishonoured cheque has been shown as 1.11.2013 at 12 A.M. and that the reason for dishonour shown therein as "no such account". On this basis, it is contended by the petitioners that if Annexure-A6 produced by none other than the complainant is true, then the said document dated 1.12.2013 would not have been produced along with Annexure-A4 complaint on 20.3.2013. Further it is argued that going by the admitted case of the complainant, the dishonoured cheque is dated 9.1.2013, whereas even the date of presentation of the said cheque before the collection Bank is on 1.11.2013 and therefore, the date of presentation of the cheque before the drawee Bank would have been only subsequently thereafter and so obviously, the cheque has been presented much after the expiry of its three months validity period as prescribed by the amended RBI Crl.M.C.No.1240/17 ::3::
notification dated 4.11.2011 made effective from 1.4.2012. On this basis it is argued by Sri.S.Easwaran, learned counsel appearing for the petitioners, that the impugned action of the Magistrate in having taken cognizance in such a complaint where the cheque itself has been presented after its expiry period is Illegal and ultravires. Alternatively, it is pleaded that if the date shown in Annexure-A6 produced by the complainant is mistaken, then also the action of the Magistrate in taking cognizance on the basis of such a crucial document is per se illegal and ultravires as only a proper dishonour memo will get the benefit of presumption envisaged under Section 146 of the N.I.Act. Accordingly, it is argued that even going by this alternative plea, the very basis on which the learned Magistrate has taken cognizance in this case is without any proper and adequate materials and so, the complaint is liable to be quashed.
5. After considering the said contention, this Court had passed an order dated 12.7.2017 in this petition directing the Registry to forward a copy of that order to the learned Magistrate who was directed to submit a report in the matter and it was also ordered that the trial court should make available photocopies of the entire case papers in relation to the present complaint in C.C.No.606 of 2016.
6. Now the learned Magistrate has made available a report Crl.M.C.No.1240/17 ::4::
dated 20.7.2017 addressed to the Registry of this Court. The said report discloses that originally the complaint was filed before the Chief Judicial Magistrate's Court, Thrissur, on 20.3.2013 as Crl.Miscellaneous Petition No.2525 of 2013. Thereafter, the case was filed before the Judicial First Class Magistrate Court, Aluva, as Crl.Miscellaneous Petition No.478 of 2015 and the said complaint was returned on 7.9.2015 for filing before the proper court. Accordingly, the complaint was filed before the Chief Judicial Magistrate's Court, on 23.9.2015 and the learned Magistrate by the order dated 18.12.2015 took cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act and had taken the case on file as S.T.C.No.2638 of 2015 and then made over the case to the present Magistrate Court (Judicial First Class Magistrate Court-II, Thrissur). Accordingly, the trial court has refiled the case as C.C.No.606 of 2016. More crucially, it is reported by the learned Magistrate that it is seen that the cheque is dated 9.1.2013 and as per the cheque return memo issued by the Federal Bank, Thrissur Main Branch, the date of presentation of the cheque is shown as 1.11.2013 and the date of memo is shown as 1.12.2013. However, as per the averments in the complaint, the cheque was allegedly returned as per the memo dated 1.12.2013, but the complaint was originally filed on 20.3.2013. The photocopies of case papers have also been made available before this Crl.M.C.No.1240/17 ::5::
Court and it is seen that Annexure-A6 produced before this Court is the document in that regard filed along with the complaint.
7. It is not in dispute that the complaint in question has been filed on 20.3.2013 wherein it has been averred that the cheque was returned on 12.1.2013 along with the memo of the Bank concerned.
Annexure-A6 is the copy of the memo of the complainant's collection Bank (Federal Bank, Thrissur Main Branch) which has also been produced along with the complaint filed on 20.3.2013. The said Annexure-A6 return memo issued by the Federal Bank reads as follows :
"Branch Name : THRISSUR MAIN - THRISSUR DATE 1/12/2013 2:29:15 PM To SREE GOKULAM CH Dear Sir, Subject : 10140200013524 about : blank 1.12.2013 Page 4 of 8 Being unable to obtain payment for the undermentioned instrument, we return the same Presentment Bank Code Branch Code Instrument Instrument Reason for Date No. Amt Dishonour 1/11/2013 9 25 15110 5,600,000.00 No such 12:00:00 account AM Yours faithfully Sd/-
THE FEDERAL BANK LIMITED
Asst. Manager Manager"
Crl.M.C.No.1240/17 ::6::
On a perusal of the said document, it is crystal clear that the dates shown therein are obviously typographical and clerical mistakes. If Annexure-A6 truly reflects the correct factual details as if the said document is issued on 1.12.2013 and the date of presentation of the cheque referred to therein was on 1.11.2013, then it would have been impossible for anyone to have produced such a document along with the complaint filed on 20.3.2013. It may be that the staff/clerk of the collection Bank would have committed typographical and clerical mistakes in typing the said letter and showing the date for presentation of the cheque. On the one hand, the date portion shows as if it is on 1.12.2013 and even the time is shown as 2:29:15 P.M. whereas the date of presentation of the cheque is shown as 1.11.2013 and the time of presentation is shown as 12:00 A.M. which should be during the midnight hours. Presumably what was meant by 12:00 A.M. was 12:00 noon. As per the averments in the complaint, the collection Bank of the complainant is Federal Bank, Thrissur Main Branch, and the drawee Bank (from which the cheque has been drawn by the accused) is the State Bank of Travancore, Thottakkattukara Branch. Even if any court could have indisputably concluded that the dates shown in Annexure-A6 was vitiated by typographical and clerical mistakes, that cannot be the justified reasons for any criminal court to have taken cognizance in such Crl.M.C.No.1240/17 ::7::
a complaint on the basis of a defective document at Annexure-A6. It is by now well established that the time of commission of the offence under Section 138 of the Negotiable Instruments Act is at the time of the dishonour of the cheque by the drawee Bank. It will be profitable to refer the three Judge Bench decision of the Apex Court in Dashrath Rupsingh Rathod v. State of Maharashtra and another reported in (2014) 9 SCC 129, which reads as follows "18. Section 138 of the N.I.Act is structured in two parts-the primary and the provisory. It must be kept in mind that the legislature does not ordain with one hand and immediately negate it with the other.
The proviso often carves out a minor detraction or diminution of the main provision of which it is an appendix or addendum or auxiliary. Black's Law Dictionary states in the context of a proviso that it is "[a] limitation or exception to a grant made or authority conferred, the effect of which is to declare that the one shall not operate, or the other be exercised, unless in the case provided.
A clause or part of a clause in a statute, the office of which is either to except something from the enacting clause, or to qualify or restrain its generality, or to exclude some possible ground of misinterpretation of its extent." It should also be kept in perspective that a proviso or a condition are synonymous. In our perception in the case in hand the contents of the proviso synonymous. In our perception in the case in hand the contents of the proviso place conditions on the operation of the main provision, while it does (sic not) form a constituent of the crime itself, it modulates or regulates the crime in circumstances where, unless its provisions are complied with, the already committed crime remains impervious to prosecution. The proviso to Section 138 of the N.I.Act features three factors which are additionally required for prosecution to be successful. In this aspect Section 142 correctly employs the term "cause of action" as compliance with the three factors contained in the proviso are essential for the cognizance of the offence, even though they are not part of the action constituting the crime. To this extent Crl.M.C.No.1240/17 ::8::
we respectfully concur with Bhaskaran in that concatenation of all these concomitants, constituents or ingredients of Section 138 of the N.I.Act, is essential for the successful initiation or launch of the prosecution. We, however, are of the view that so far as the offence itself the proviso has no role to pay.
Accordingly, a reading of Section 138 of the N.I.Act in conjunction with Section 177 Cr.P.C leaves no manner of doubt that the return of the cheque by the drawee Bank alone constitutes the commission of the offence and indicates the place where the offence is committed.
19. In this analysis we hold that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee Bank is located. The law should not be warped for commercial exigencies. As it is Section 138 of the N.I.Act has introduced a deeming fiction of culpability, even though, Section 420 is still available in case the payee finds it advantageous or convenient to proceed under that provision. An interpretation should not be imparted to Section 138 which will render it as a device of harassment i.e., by sending notices from a place which has no causal connection with the transaction itself, and/or by presenting the cheque(s) at any of the Banks where the payee may have an account. In our discernment, it is also now manifest that traders and businessmen have become reckless and incautious in extending credit where they would heretofore have been extremely hesitant, solely because of the availability of redress by way of criminal proceedings. It is always open to the creditor to insist that the cheques in question be made payable at a place of the creditor's convenience. Today's reality is that every Magistracy is inundated with prosecutions under Section 138 of the N.I.Act, so much so that the burden is becoming unbearable and detrimental to the disposal of other equally pressing litigation. We think that courts are not required to twist the law to give relief to incautious or impetuous persons ; beyond Section 138 of the N.I.Act.
20. We feel compelled to reiterate our empathy with a payee who has been duped or deluded by a swindler into accepting a cheque as consideration for delivery of any of his property; or because of the receipt of a cheque has induced the payee to omit to do anything resulting in some damage to the payee. The relief introduced by Section 138 of the NI Act is in addition to the contemplations in IPC. It is still open to such a payee recipient of a dishonoured cheque to lodge a first information report with the police or file a complaint directly before the Magistrate concerned. If the payee succeeds in establishing that the inducement for accepting a cheque which Crl.M.C.No.1240/17 ::9::
subsequently bounced had occurred where he resides or ordinarily transacts business, he will not have to suffer the travails of journeying to the place where the cheque has been dishonoured. All remedies under IPC and Cr.P.C. are available to such a payee if he chooses to pursue this course of action, rather than a complaint under Section 138 of the N.I.Act and of course, he can always file a suit for recovery wherever the cause of action arises dependent on his choosing.
21. The interpretation of Section 138 of the N.I.Act which commends itself to us is that the offence contemplated therein stands committed on the dishonour of the cheque, and accordingly JMFC at the place where this occurs is ordinarily where the complaint must be filed, entertained and tried. The cognizance of the crime by JMFC at that place however, can be taken only when the concomitants or constituents contemplated by the section concatenate with each other. We clarify that the place of the issuance or delivery of the statutory notice or where the complainant chooses to present the cheque for encashment by his Bank are not relevant for purposes of territorial jurisdiction of the complaints even though non-compliance therewith will inexorably lead to the dismissal of the complaint. It cannot be contested that considerable confusion prevails on the interpretation of Section 138 in particular and Chapter XVII in general; of the N.I.Act. The vindication of this view is duly manifested by the decisions and conclusions arrived at by the High Courts even in the few cases that we shall decide by this judgment. We clarify that the complainant is statutorily bound to comply with Section 177, etc. of Cr.P.C and therefore, the place or situs where the Section 138 complaint is to be filed is not of his choosing. The territorial jurisdiction is restricted to the court within whose local jurisdiction the offence was committed, which in the present context is where the cheque is dishonoured by the Bank on which it is drawn."
Before parting with this case, this Court would invite the attention of the trial Magistracy involved in such cases about the repeated words of caution given by the Apex Court and by various High courts including this Court that the trial court should be extremely cautious in taking cognizance and issuing summons and that they are judicially obliged to Crl.M.C.No.1240/17 ::10::
carefully analyse and scrutinize the complaint and to ascertain as to whether the allegations made in the complaint proceedings meet with the basic ingredients in the offence, whether the concept of territorial jurisdiction is satisfied, etc. The decisions of the superior courts are in legion. It has been held by the Apex Court in paragraphs 22 and 30 of the judgment in Pooja Ravinder Devidasini v. State of Maharashtra and another reported in (2014) 16 SCC 1 = 2014 KHC 4807 as follows :
"22. As held by this Court in Pepsi Foods Ltd. v. Judicial Magistrate summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused.
30. Putting the criminal law into motion is not a matter of course. To settle the scores between the parties which are more in the nature of a civil dispute, the parties cannot be permitted to put the criminal law into motion and courts cannot be a mere spectator to it. Before a Magistrate taking cognizance of an offence under Sections 138/141 of the N.I. Act, making a person vicariously liable has to ensure strict compliance with the statutory requirements. The superior courts should maintain purity in the administration of justice and should not allow abuse of the process of the court. The High Court ought to have quashed the complaint against the appellant which is nothing but a pure abuse of process of law."
Crl.M.C.No.1240/17 ::11::
In one of the latest judgments in the case in Mahendra Singh Dhoni v. Yerraguntla Shyamsundar and another reported in AIR 2017 (SC) 2392 = 2017 (2) KLT SN 68 (C.No.96) (SC), their Lordships of the Supreme Court have held in paragraph 14 thereof as follows :
"14. Before parting with the case, we would like to sound a word of caution that the Magistrates who have been conferred with the power of taking cognizance and issuing summons are required to carefully scrutinize whether the allegations made in the complaint proceeding meet the basic ingredients of the offence; whether the concept of territorial jurisdiction is satisfied; and further whether the accused is really required to be summoned. This has to be treated as the primary judicial responsibility of the court issuing process."
8. Of course, such an offence becomes a prosecutable one only after the complainant meticulously follows the statutory formalities like service of statutory demand notice in terms of Section 138 proviso
(b) of the N.I. Act and the other formalities stipulated in that provision. But one of the essential ingredients on the basis of which the learned Magistrate in rendering a decision to take cognizance of such an offence in a complaint is that learned Magistrate should be fully satisfied that there is adequate materials before him which would indisputably show that the dishonour of the cheque has indeed taken place within the acceptable parameters of Section 138 of the N.I.Act. Proviso to Section 138 (a) mandates that the cheque has been presented to the Bank within a period of six months from the date on which it is drawn or within Crl.M.C.No.1240/17 ::12::
the period of its validity, whichever is earlier. It is not in dispute that the Reserve Bank of India has issued notification No.RBI/2011-12/251, DBOD.AML BC No.47/14.01.001/2011-12 dated 4.11.2011 with effect from 1.4.2012 whereby it has been held that the validity period of the cheque in force is to be only three months. This notification has been issued by the Reserve Bank of India in exercise of the enabling powers conferred by Section 35A read with Section 56 of the Banking Regulation Act, 1949. It has been held by the Apex Court in the decisions as in Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. reported in 2001 (3) SCC 609 and Rameshchandra Ambalal Joshi v. State of Gujarat and another reported in (2014) 11 SCC 759, that the time prescribed for presenting the cheque within the validity period is to be adjudged at the point of time of the presentation of the cheque at the drawee Bank. In this context, it is also relevant to note that an amendment has been introduced to Chapter XXVII of the Negotiable Instruments Act by inserting Section 146 thereof with effect from 6.2.2003 which reads as follows :
"146. Bank's slip prima facie evidence of certain facts : - The Court shall, in respect of every proceeding under this Chapter, on production of Bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved."
9. The definition of "cheque" referred to in Section 6 of the Crl.M.C.No.1240/17 ::13::
Negotiable Instruments Act has been amended by Amendment Act 26 of 2015 as per Section 2(i) thereof with effect from 15.6.2015 and the provisions of Section 6 of the Negotiable Instruments Act as if it stands now opposite to the said amendment reads as follows :
"6. Cheque : - A "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. Explanation I:-For the purposes of this Section, the expressions -
(a) "a cheque in the electronic form" means a cheque drawn in electronic form by using any computer resource and signed in a secure system with digital signature (with or without biometrics signature) and asymmetric crypto system or with electronic signature, as the case may be ;
(b) "a truncated cheque" means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the Bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing.
Explanation II.- For the purposes of this Section, the expression "clearing house" means the clearing house managed by the Reserve Bank of India or a clearing house recognised as such by the Reserve Bank of India.
Explanation III.- For the purposes of this Section, the expressions "asymmetric crypto system", "computer resource", "digital signature", "electronic form" and "electronic signature"
shall have the same meanings respectively assigned to them in the Information Technology Act, 2000 (21 of 2000)."
10. The statement of objects and reasons of the Negotiable Instruments (Amendment) Bill, 2015, Bill No.151 of 2015 would show that Explanation I has been introduced under Section 6 of the N.I.Act relating to meaning of the expression "a cheque in the electronic form"
Crl.M.C.No.1240/17 ::14::
as the said meaning is found to be deficient because it presumes the drawing of a physical cheque, which is not the objective in preparing "a cheque in the electronic form" and inserting a new Explanation III in the said Section giving reference to the expressions contained in the Information Technology Act, 2000.
11. It is also brought to the notice of this Court that the current cheque clearing mechanism in banks does not involve physical movement of cheques from one location to another. The cheques, which are presented by the payee before the branch of his collection bank, remain with that branch concerned of the payee's collection bank, where it is presented and an image of the cheque is captured and the same is transmitted through an electronic/digital grid to the branch of the drawee Bank concerned. The cheques are then cleared through a straight through process and debited to the account of the drawer. The proceeds are then digitally transmitted to the collection bank concerned, which through another straight through process credits to the account of the payee. This process is carried out by "Cheque Truncation" and hence banks have now provided their customers with CTS (Cheque Truncation System) cheques. The CTS cheques carry a rectangular encryption in the bottom left side. This enables the scanner to decipher the bank and the branch, for transmissions electronically. With the introduction of the Crl.M.C.No.1240/17 ::15::
Core Banking Solutions, banks have now done away with the concept of customer of a specific branch and instead, the customer is for the bank and customer may transact through any branch of the bank, save for certain restrictions on cash transactions and cash transactions could be done at any branch, but certain caps are stipulated for such transactions at branches other than the branch, where the account is maintained. Having regard to these sweeping technological changes brought about to banking practices and also taking into account the amended provisions of the N.I. Act, more particularly those in Section 6 thereof, ordinarily complainant/payee might receive the cheque return memo, as intimated to them by their collection Bank and having regard to the amended provisions of the N.I. Act more particularly in Section 6 thereof, ordinarily, the complainant/payee, might receive only the cheque return memo, i.e., intimated to them by their collection Bank and the complainant/payee may not get the intimation conveyed by the drawee Bank to the complainant's Bank, as such communication may be on the basis of the electronic media. Therefore, in order to get the presumption under Section 146, it cannot now be insisted that the complainant/payee should necessarily produce the cheque return memo which is issued by the drawee Bank and they can make available only the cheque return memo as intimated to them by the complainant Bank. Therefore, there Crl.M.C.No.1240/17 ::16::
is nothing wrong in the complainant submitting a cheque return memo that is intimated to him by his collection Bank if he has not received any intimation from the drawee Bank. The gist of the information conveyed in such cheque return memo as intimated to the complainant by the collection Bank would be sufficient to get the presumption of Section 146. This is all the more so particularly in the light of the amendment made to Section 6 of the N.I.Act and going by the statement of objects and reasons of the abovesaid bill which introduced the amended provisions. If the said cheque return memo made available by the complainant's Bank discloses that the cheque was dishonoured within the prescribed validity period of the cheque, on the ground of insufficiency of funds, etc. then certainly the complainant would draw the presumption envisaged in Section 146 of the N.I.Act. But if the said cheque return memo itself shows that the dishonour is much after the validity period of the cheque or if the said document is not clear as to whether or not the presentation of the cheque before the drawee Bank was within the validity period of the cheque, etc., then the court may have to secure additional materials either at the stage of Section 200 Cr.P.C. preliminary enquiry or at the stage of Section 202Cr.P.C. inquiry. However, in cases where the complainants are served with intimations by way of cheque return memos, both by the complainant's collection Crl.M.C.No.1240/17 ::17::
bank as well as by the drawee Bank, then the complainant should produce necessary cheque return memo issued by the drawee Bank concerned. If the accused has a case that the details contained in such cheque return memos produced by the complainant do not reflect the correct position, then certainly he can rebut the presumption under Section 146 of the N.I. Act by leading contra evidence in that regard so as to disprove the case of the complainant. Though it is stated in Annexure- A6 memo issued by the Federal Bank (Collection Bank) that "no such account", it is stated by the petitioners themselves that the account in question is in operation as per Annexure-A5 statement of their accounts.
12. Now coming to the facts of this case, it cannot be disputed by any ordinary prudent person that Annexure-A6 is vitiated by typographical and clerical mistakes as otherwise if the document truly reflected the contents disclosed therein, then it would have been impossible for the complainant to have produced such a document along with the complaint. But that is no excuse for the learned Magistrate to have taken cognizance of the offence involved in this complaint on the basis of such a defective document. Of course, if additional materials were available with the complainant, he could have produced such materials during Section 200 Cr.P.C. preliminary enquiry.
Crl.M.C.No.1240/17 ::18::
If such materials were still lacking even after the conduct of Section 200 Cr.P.C. inquiry, then the learned Magistrate was under the judicial obligation to conduct a proper and effective inquiry under Section 202 Cr.P.C. so that the court could have summoned witnesses and documents from the drawee Bank and the collection Bank in order to satisfy itself about the true and correct state of affairs. Such proper materials alone could have been the lawful foundation to enable the learned Magistrate to render a decision on the issue of taking cognizance, on the basis of proper and necessary materials. It appears that the counsel for the complainant and the learned Chief Judicial Magistrate have completely overlooked these elementary defects which could have been noted by anyone on a casual perusal of the said document. The upshot of the above discussion is that this Court is constrained to come to the considered conclusion that the decision of the learned Magistrate to have taken cognizance of the offence involved in this complaint was illegal and improper as he has taken cognizance without any proper and sufficient materials before him to render a considered decision on that issue.
13. Accordingly, the impugned decision taken by the learned Chief Judicial Magistrate in having taken cognizance of the offence involved in the present complaint is set aside and the complaint will Crl.M.C.No.1240/17 ::19::
stand restored to the pre-cognizance stage. The complainant should be afforded a reasonable opportunity to adduce necessary evidence at the stage of Section 200 Cr.P.C. preliminary enquiry. It is quite likely that it is extremely difficult for the complainant to secure necessary materials and details from the drawee Bank, where the accused have maintained their accounts from which the dishonoured cheque has been issued. Therefore, if the complainant is not able to produce adequate materials in that regard, then the learned Magistrate shall conduct a proper and effective Section 202 (2) Cr.P.C. inquiry and should summon necessary documents and witnesses from the drawee Bank and the complainant's collection Bank as may be deemed fit and proper by the learned Magistrate. Through that process, learned Magistrate should get sufficient and proper materials as to the date on which the cheque was actually presented before the drawee Bank and the reasons for such dishonour, etc. Learned Magistrate should also ensure that necessary evidence is taken from the drawee Bank, if that is required to enable the Magistrate to have necessary and proper materials so as to render a considered decision on the issue of taking cognizance in the matter. If the inquiry process reveals that the cheque has been actually presented before the drawee Bank within the validity period of the cheque, etc. then the documents in that regard may also be made available to the Crl.M.C.No.1240/17 ::20::
complainant, so that the complainant can produce the same as additional documents along with their list of documents. The complainant and the learned counsel for the complainant will appear before the trial court at 11 A.M. on 16.10.2017 and will produce a certified copy of this order for perusal of the trial court. The entire formalities as directed above, should be completed by the learned Magistrate within a period of two months from the date of production of a certified copy of this order. All other contentions raised in this petition are left open.
With these observations and directions, the above Crl.Miscellaneous Case stands finally disposed of.
ALEXANDER THOMAS
JUDGE
csl
Crl.M.C.No.1240/17 ::21::
ALEXANDER THOMAS, J.
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Crl.M.C.No.1240 of 2017
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Dated this the 12th day of July, 2017 O R D E R Sri.S.Easwaran, learned counsel appearing for the petitioners/accused would point out that the specific case projected in paragraph 3 of the impugned Annexure A4 complaint is that Annexure A3 cheque dated 9.1.2013 was dishonoured as per the memo dated 12.1.2013, but as per Annexure A6 dishonour memo dated 1.12.2013 issued by the Federal Bank, Thrissur Main Branch, (Collection Bank of the complainant), produced along with the complaint, the date of presentation of the cheque is on 1.11.2013 at 12 Noon. and the reason for dishonour is shown therein as `no such account'. On this basis, it is contended by the petitioners that if Annexure A6 produced by none other than the complainant is true, then the said document dated 1.12.2013 would not have been produced along with Annexure A4 complaint filed on 20.3.2013. Further that going by the admitted case of the complainant the cheque is dated 9.1.2013, whereas even the date of presentation of the said cheque before the collection Bank is on Crl.M.C.No.1240/17 ::22::
1.11.2013 and therefore, the date of presentation of the cheque before the drawer Bank could have been done only subsequently thereafter and so obviously the cheque has been presented much after the expiry of its three months' validity period as prescribed by the amended RBI notification dated 4.11.2011 made effective from 1.4.2012.
On this basis, it is argued that the impugned action of the Magistrate in taking cognizance in such a complaint where the cheque itself has been presented after its expiry period is illegal and ultravires. Alternatively, it is pleaded that if the date shown in Annexure A6 produced by the complainant is mistaken, then also the action of the Magistrate in taking cognizance on the basis of such a crucial document as Annexure A6 is per se illegal and ultravires, as only a proper dishonour memo will get the benefit of the presumption envisaged under Section 146 of the Negotiable Instruments Act. These contentions of the petitioners have to be examined in detail.
2. Accordingly, it is ordered that the Registry will immediately forward a copy of this order to the learned Magistrate who may be instructed to submit a report in the matter. It should also be ensured that the trial court makes available photocopies of the entire case papers in relation to the present complaint in S.T.No.606 of 2016 on the file of the Judicial First Class Magistrate Court-II, Thrissur. This Crl.M.C.No.1240/17 ::23::
should be done within five days from today.
List on 21.7.2017.
ALEXANDER THOMAS JUDGE csl