In the above noted
matter tagged with eight other criminal appeals, a three judge bench of hon’ble
Supreme Court of India headed by Mr. T. S. Thakur J. looked into the legal nodus of substantial public
importance pertaining to Court’s territorial jurisdiction concerning criminal
complaints filed under Chapter XVII of the Negotiable Instruments Act, 1881.
After
hearing the counsels and going through the provisions of the Negotiable Instruments
Act and number of precedents, said hon’ble bench of Supreme Court opined that section 138 of the Act in question is in two parts. The
enacting part of it, clarifies as to what constitutes
an offence punishable with imprisonment and/or fine is the dishonor of a cheque
for insufficiency of funds etc. in the account maintained by the drawer with a
bank, which was issued for discharge of a debt or other liability whether in
full or part. Thereby said enacting part constitutes of three elements as
follows:
- Cheque is drawn by the accused on an account maintained by him with a banker.
- The cheque amount is in discharge of a debt or liability. AND
- The cheque is returned unpaid for insufficiency of funds or that the amount exceeds the arrangement made with the bank.
Whereas the other part of section is
the proviso, which draws an exception to the generality of the enacting part of
the provision, by stipulating two steps that ought to be taken by the complainant
holder of the cheque before the failure of the drawer gives to the former the
cause of action to file a complaint and the competent Court to take cognizance
of the offence. These two steps, which only postpones the actual prosecution of
the offender till prescribed statutory period is as follows:
- The complainant has demanded the payment of the cheque amount from the drawer by issuing a written notice within thirty days of receipt of information by him from the bank regarding the dishonor. AND
- The drawer has failed to pay the cheque amount within fifteen days of the receipt of the notice.
Thus those two steps stipulated in
the proviso to section 138 are distinct from the ingredients of the offence
which the enacting provision creates and makes punishable. Under this kind of
interpretation, offence under section 138 is complete with the dishonor of the cheque
but taking cognizance of the same by any Court is forbidden so long as the
complainant does not have the cause of action to file a complaint in terms of
clause (c) of the proviso to section 138 read with Section 142 of the
Negotiable Instruments Act.
The overall scheme of legislature by
stipulating such law seems to have granted a concession and prescribe a way out
under which dishonor need not necessarily lead to penal consequence if the
drawer makes amends by making payment within the time stipulated once the dishonor
is notified to him. Payment of the cheque amount within the stipulated period
will in such cases diffuse the element of criminality that Section 138
attributes to dishonor by way of a legal fiction implicit in the use of the
words “shall be deemed to have committed an offence”. The drawer would by such
payment stand absolved by the penal consequences of dishonor.
The hon’ble bench of the apex court, hence, respectfully
concured with K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510 so far as concatenation of concomitants, constituents or ingredients
of Section 138 Negotiable Intruments Act is essential for the successful
initiation or launch of the prosecution is concerned. But so far as commission
of the offence itself is concerned the proviso has no role to play. Accordingly
a reading of Section 138 of the Negotiable Act in conjunction with Section 177
of 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.
In the detailed and critical analysis
of their lordships which ran as many as 87 pages, they hold that the place, situs or venue of judicial inquiry and trial of
the offence under section 138 of the Negotiable Instruments Act must logically
be restricted to where the drawee bank, is located.
Consequent on considerable consideration,
Supreme Court thought it expedient to direct that only those cases where, post summoning
and appearance of the alleged Accused, the recording of evidence has commenced
as envisaged in Section 145(2) of the Negotiable Instruments Act, 1881, the
proceedings will continue at that place the same is going on. They have also clarified
that regardless of whether evidence has been led before the Magistrate at the
pre-summoning stage, either by affidavit or by oral statement, the Complaint
will be maintainable only at the place where the cheque stands dishonoured. To
obviate and eradicate any legal complications, the category of Complaint cases
where proceedings have gone to the stage of Section 145(2) or beyond shall be
deemed to have been transferred by Supreme Court from the Court ordinarily
possessing territorial jurisdiction to the Court where it is presently pending.
All other Complaints (obviously including those where the accused/respondent
has not been properly served) shall be returned to the Complainant for filing
in the proper Court, in consonance with our exposition of the law.
Such Complaints may be filed/ refiled within thirty days of their return to be
deemed to have been filed within the time prescribed by law, unless the initial
or prior filing was itself time barred.
Those willing to read detailed judgement may follow following link:
