Arora Distilleries Private Ltd. vs Vijay Associates and Another

Brij Mohan Gupta, J.

This revision is for impugning the order dated 1st March, 2004, passed by Session Judge, Vidisha, in Criminal Revision No. 89/03, whereby the learned Judge has modified the order dated 24th April, 2003 passed by Additional Chief Judicial Magistrate, Vidisha in Criminal Case No. 444/02, framing of the charge against the respondents for the offence punishable u/s 420 of IPC only, while the complaint was filed for the offence punishable u/s 138 of the Negotiable Instruments Act, 1981 (hereinafter referred to as ''the Act'') alongwith Sections 406 and 420 of IPC. While modifying the order, the learned Judge has observed that no charge u/s 420 of IPC and Section 138 of the Act is made out and only a charge u/s 406 of IPC is made out.

2(A). The facts which are not disputed by the parties in brief are, that one complaint dated 28-4-93 has been filed by the petitioner against the respondents for the offence punishable u/s 420 read with Section 406/34 of IPC and also u/s 138 of the Act. It is alleged in the complaint that the petitioner is having a legal plant alongwith machineries fitted thereon, for production of liquor. Vide agreement dated 14-5-92, this plant was given to the respondents for ten years on the terms, that for first three months Rs. 33,333/-per month, thereafter upto five years Rs. 65,000/- per month and subsequent to that Rupees One lac per month was to be paid by the respondents to the petitioner. The aforesaid amount was to be paid in advance upto 10th of every month and in default of payment, Rs. 500/- per day was to be paid as penalty. From the very beginning the petitioner entered into this contract having intention of dishonesty and cheating in their mind. Initially the amount for first three months, was paid, thereafter they avoided making payment. Some allegations have been mentioned in Paragraph 5 of the complaint with regard to an offence u/s 406 of IPC, which are now not relevant to be reproduced, as with regard to that offence, a separate order has been passed by this Court today in M.Cr.C. No. 4414/2004.

2(B). It is further alleged in the complaint, that when demand was made, one cheque amounting to Rupees Two lacs was drawn by the respondent No. 1 on behalf of the respondents in favour of the complainant, which was dishonoured. On 5-1-93, on the basis of oral information received by him, the petitioner sent a notice to the respondents informing that the amount of cheque is to be paid. Thereafter, the respondent No. 1 orally informed the petitioner that within a few days he will deposit the amount in the bank, but despite that the bank did not pay the amount and informed in writing about dishonour of the cheque on 26-3-93. Thereafter, another notice was issued by the petitioner on 3-4-93 which was neither replied nor the payment was made. On the basis of these averments after recording evidence at before charge stage, the learned Magistrate framed charge on 24-4-2003 u/s 420 of IPC only and negated framing of the charge u/s 406 of IPC and u/s 138 of the Act.

2(C). Feeling aggrieved by the aforesaid order of the learned Magistrate, the respondents filed Criminal Revision No. 89/03 praying therein that charge u/s 420 of IPC is not made out. Vide impugned order dated 1-3-2004 passed by learned Sessions Judge, Vidisha, it has been observed that only charge u/s 406 of IPC is made out and no charge u/s 138 of the Act and Section 420 of IPC is made out. Feeling aggrieved by that order of the learned Judge, dated 1-3-2004, the present Criminal Revision No. 253/04 has been filed by the petitioner praying therein that charge u/s 420 of IPC and u/s 138 of the Act also ought to have been framed.

Parties have not argued anything with regard to the offence u/s 420 of IPC, nor the same has been pressed during arguments on behalf of the petitioner. With regard to offence u/s 138 of the Act, it is only-submitted by Shri Kaushik for the petitioner, that as per Paragraph 8 of the complaint, notice issued on 5-1-93 was without receiving any written information from the bank. It was issued only on an oral information. The period of limitation can be counted from the notice after receiving the written information about dishonouring of the cheque from the bank, as observed by the Kerala High Court in the case of John v. George Jacob 2000(1) Crimes 401. As per the averment in Paragraph 8, the petitioner received written information on 26-3-93. Thereafter, he issued notice on 3-4-93 and on that notice the complaint has been filed on 28-4-93 which is within time. With regard to the service of the notice, as to on what date the first or second notice was served, Shri Kaushik could not reply.

Countering the contention Shri Gupta has submitted that upon perusal of notice dated 5-1-93, it appears that the same was given u/s 138 of the Act. Even upon oral information if the notice has been issued, the limitation starts from that notice. It is not necessary that notice is required to be issued only after receiving written information from the bank. With regard to the order of the Kerala High Court in the case of John (supra), Shri Gupta has submitted that in that case no notice was issued on oral information. He has further submitted that as observed by the Apex Court in the case Sadanandan Bhadran Vs. Madhavan Sunil Kumar, , limitation starts from the first notice and not from the second notice and in view of this, the observation of the learned Judge in Paragraphs 13 and 14 of the impugned order that the complaint u/s 138 of the Act is barred by limitation is not erroneous.

Considering the aforementioned contentions of the rival parties, interpretation of Section 138 Proviso (b) is only required. The provision goes as under:

Dishonour of cheque for insufficiency, etc. of funds in the account.-- 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 the bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless

(a)..... ..... ..... (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said 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;

(c) ..... ..... ..... .....Explanation:--..... ..... ..... ..... (Emphasis supplied)

Both the parties have admitted that the earlier existing words-- ''within fifteen days'' for issuance of notice has been subsequently amended. The words-- ''within fifteen days'' have been substituted by Section 7 of the Act of 55 of 2002, which came in force from 6th February, 2003 by the words-- ''within thirty days''. Thus, prior to this, the period prescribed was fifteen days. It is also admitted that both the notices have been given in the year 1993 which is a period prior to the aforesaid date 6-2-03. Hence, at that time, the time of fifteen days was provided. Considering this period, this Court has to pass this order.

In aforementioned provision, only highlighted words therein require interpretation. Upon perusal, the notice was required to be given by the payee within a period of fifteen days of the receipt of information by him, from the bank regarding the return of cheque as unpaid. Admittedly, in the present case, the first notice was issued on 5th January, 1993, on the ground that the payee, the petitioner herein, had received an oral information that the amount of cheque is not being paid. Upon this knowledge, the following notice was issued on 5th January, 1993:

izfr] Jh fot; ,lksfl,V~l] 2&,] bUnziqjh] Hkksiky

}kjk & Jh ,l- ds- vkUun ikVZuj

fo"k;%& psd dza- 102427 nsuk cSad] Hkksiky fnukad 17&11&92 ds fMl vkWuj gksus fo"k;d

lanHkZ%& gekjk i= fnukad 26&12&92

fiz; egksn;] vkids }kjk gesa ekg flrEcj 92] vDVwcj 92] uoEcj 92] ,oa jkW;Vhfj;y ds vkaf''kd Hkqxrku isVs :i;s nks yk[k dk ,d psd dza- 102427 tks fd nsuk cSad Hkksiky dk fnukad 17&11&92 dk fn;k x;k Fkk] gekjs cSadj LVsV cSad vkWQ bUnkSj us gesa blds cxSj Hkqxrku ds okil vkus ckor~ lwfpr fd;k gS A ,oa bldh lwpuk fnukad 26&12&92 dks vkidks nh xbZ Fkh ,oa vkidks rqjUr Hkqxrku ckor~ fy[kk x;k Fkk A vkids ikVZuj Jh lat; tk;loky ,oa vki Loa; us Hkh ,d nks jkst esa jde tek djus ckor~ cSad vf/kdkjh;ks dks lwfpr �ekSf[kd :i ls� fd;k Fkk A ysfdu vkt fnu rd mDr jde vki }kjk Hkqxrku ugha dh xbZ gS A vki }kjk mDr psd gekjh ns;rkvks dks pqdkus ds fy, fn;k Fkk ,oa bldk fMl vkuj gksuk cSfdad dkuwu fof/k �la''kks/ku� vf/kfu;e] 1988 dh /kkjk 4 }kjk ykxw ijdzkE; fy[kr vf/kfu;e] 1881 dh /kkjk 138 dk mYya?ku gS A vr% vkils fuosnu gS fd i= izkfIr ds rqjUr ckn 15 fnu ds vUnj vki mDr jde dk Hkqxrku dj gels jlhn izkIr dj ysos A bfr fnukad 5&1&93-

Hkonh; Lakpkyd okLrs vjksjk fMLVyjht izk-fy-] iqjkuh lCth eaM+h fofn''kk �e-iz-�

(Emphasis supplied)

Upon perusal of the highlighted part in the aforequoted notice, it appears that the bank of the petitioner had informed him with regard to the fact that the amount of the cheque is not being paid. Upon perusal of the notice as a whole, it also appears that the amount was not being paid on account of insufficiency of fund in the account concerned and it contains all the requirements of a valid notice. In the aforementioned circumstances, whether the aforesaid unwritten information or knowledge received by the petitioner, fulfills the requirement of the aforequoted highlighted part of Section 138 Proviso (b) or not, it is to be seen. While drawing attention on an order of Single Bench of Kerala High Court in the case of John (supra), it is emphasized on behalf of the petitioner, that notice was not required to be issued upon unwritten information. The period of limitation starts from the period when the payee receives the information in writing from the bank with regard to dishonour of the cheque. As per the facts of the case of John (supra), the validity of notice issued by the payee was challenged only on the ground, that after having oral information, notice was to be given by the payee and the limitation was to start from that period. In that case, although an oral information was received by the payee earlier to receiving the written information, he issued notice after receiving of the written information. If the limitation was to be counted from the date of oral information, the notice issued was beyond the period of fifteen days and if the limitation was to be counted from the date of written information, the notice issued by the payee was within time. The learned Judge was observed that the obligation of issuance of notice by the payee, starts only after receiving an information in writing. It is not obligatory on the payee to issue any notice upon oral or unwritten information. It is rightly submitted by Shri Gupta on behalf of the respondent, that in the aforesaid case of Kerala High Court, no notice was given on the oral information and on this ground the present case is having different facts. In my considered opinion also, the obligation of issuance of notice by the payee starts from the date of receiving an information in writing from the bank with regard to dishonour of the cheque.

Whether the aforesaid observation with regard to the obligation of issuance of notice by the payee, only after receiving the information in writing, will invalidate the first notice in this case also? Now it is to be seen. Upon perusal of the aforequoted notice dated 5-1-93, it appears that the same has been issued by the petitioner upon receiving an information (unwritten) from his bank. After receiving such information, the petitioner opted to issue notice u/s 138 of the Act to the respondents. Once he opted this, in my considered view, subsequently he cannot take this defence, that as the notice has been given before receiving the information in writing, hence, the same is not valid. If the notice was not given by him upon that oral information, of course, there was no obligation upon him as observed hereinabove, but once he has opted to issue notice without waiting the written information and only upon receiving the oral or unwritten information he has issued the notice, he has estopped from saying that his first notice ought not to be considered as a valid notice and the limitation ought not to be counted from the date of issuance of the first notice.

Thus, after a deep consideration, it is observed that (1) it is not obligatory upon the payee to issue notice of demand u/s 138 of the Act, before receiving of information in writing from the bank with regard to dishonour of the cheque, and (2) however, if even on an unwritten or oral information the payee opts to issue legal notice of demand u/s 138 of the Act, then subsequently he becomes estopped from taking defence that, as the written information was received subsequently, he was not obliged to issue notice, hence, prior to receiving written information, the limitation ought not to be counted from the first notice. As observed by the Apex Court in the case of Sadanandan Bhadran (supra), limitation will be counted on the basis of the first notice and not on the basis of the second notice. In this case also in view of this observation of the Apex Court, the limitation will be counted from the first notice given by the payee, the petitioner herein from 5-1-93 and not from the subsequent notice dated 3-4-93. As provided by Section 142 of the Act, a complaint is to be filed within thirty days from the date of accruing of the cause of action, i.e., fifteen days time after receiving of the notice. Thus, counting from 5-1-93, fifteen days plus thirty days, total forty five days, the complaint was required to be filed. In this case, it has been filed on 28-4-93. If the limitation is counted from the first notice, then apparently and admittedly the complaint is barred by time.

In view of the above, if the charge u/s 138 of the Act has not been framed by the Court below, there appears no error in the impugned order on this ground. Consequently, the revision is dismissed.