One judgment in above noted case bearing Criminal
Appeal No. 261 - 264 of 2002 was delivered by the bench of Supreme Court of
India comprising of Mr. R. M. Loha J., Mr. T. S. Thakur J. and Mr. Anil R. Dave
J. on September 26, 2012. This judgment marks crucial change in jurisprudence
of proceedings under section 138 of Negotiable Instruments Act as the same over
turns Supreme Court’s own earlier decision in Sadanandan Bhadran v. Madhavan
Sunil Kumara [(1998) 6 SCC 514].
The crucial question of law for decision before the
hon’ble court was whether a payee or holder of a cheque can issue a
statutory notice to the drawer each time the cheque is dishonoured and
institute proceedings solely on the basis of a second or successive statutory
notice?
To answer this question, the hon’ble court relied on
the proviso to Section 138, which stipulates three distinct conditions
precedent that must be satisfied before the dishonour of a cheque can
constitute an offence and become punishable. They are:
1.
The first
condition is that the cheque ought to 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. [Since, as per recent RBI guidelines now
cheques remains valid only for three months, hence now cheques can be presented
for upto three months only instead of six months cap]
2.
The second
condition is that the payee or the holder in due course of the, as the case may
be, ought to make a demand for the payment of the said cheque amount of money
by giving a notice in writing, to the drawer of the cheque, within thirty days
of the receipt of information by him from the bank regarding the return of the
cheque as unpaid.
3.
The third
condition is that the drawer of such a cheque should have failed to make
payment of the said amount of money to the payee or as the case may be, the
holder in due course of the cheque within fifteen days of the receipt of the
said notice.
It is only upon the satisfaction of all the three
conditions mentioned above and enumerated under the proviso to Section 138 as
clauses (a), (b) and (c) thereof that an offence under Section 138 can be said
to have been committed by the person issuing the cheque.
It was further observed that nothing in the proviso to
Section 138 or in Section 142 makes it obligatory for the holder/payee of a
dishonoured cheque to necessarily file a complaint on first dishonor itself
even when he has acquired an indefeasible right to do so. The fact that an
offence is complete need not necessarily lead to launch of prosecution
especially when the offence is not a cognizable one. It follows that the
complainant may, even when he has the immediate right to institute criminal
proceedings against the drawer of the cheque, either at the request of the
holder/payee of the cheque or on his own volition, refrain from instituting the
proceedings based on the cause of action that has accrued to him. Such a
decision to defer prosecution may be impelled by several considerations but
more importantly it may be induced by an assurance which the drawer extends to
the holder of the cheque that given some time the payment covered by the
cheques would be arranged, in the process rendering a time consuming and
generally expensive legal recourse unnecessary. It may also be induced by a
belief that a fresh presentation of the cheque may result in encashment for a
variety of reasons including the vicissitudes of trade and business dealings,
where financial accommodation given by the parties to each other is not an unknown
phenomenon. Suffice it to say that there is nothing in the provisions of the
Act that forbids the holder/payee of the cheque to demand by service of a fresh
notice under clause (b) of proviso to Section 138 of the Act, the amount
covered by the cheque, should there be a second or a successive dishonour of
the cheque on its presentation.
Besides those technical observations, the hon’ble
court referred to the rule of purposive interpretation for interpreting the
provisions of section 138 and 142 of Negotiable Instruments Act. Hence, the
decisions in New India Sugar Mills Ltd. v. Commissioner of Sales Tax, Bihar
(AIR 1963 SC 1207) was referred to, where in following rule of interpretation
was enshrined:
“It
is a recognised rule of interpretation of statutes that expressions used
therein should ordinarily be understood in a sense in which they best harmonise
with the object of the statute, and which effectuate the object of the
Legislature. If an expression is susceptible of a narrow or technical meaning,
as well as a popular meaning, the Court would be justified in assuming that the
Legislature used the expression in the sense which would carry out its object
and reject that which renders the exercise of its power invalid.”
In view of above rule of interpretation of statute,
hon’ble court finally opined that no real or qualitative difference exist
between a case where default is committed and prosecution immediately launched
and in another case where the prosecution is deferred till the cheque is presented
again and gets dishonoured for the second or successive time.
In the result, the decision in Sadanandan Bhadran’s
case (supra) was over ruled and finally it was held that prosecution based upon
second or successive dishonour of the cheque is also permissible so long as the
same satisfies the requirements stipulated in the proviso to Section 138 of the
Negotiable Instruments Act.
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