Kumari Sunita Charak vs Ajay Kumar Sharma

Arun Kumar Goel, J.—This is a petition filed at the instance of Kumari Sunita Charak, hereinafter referred to as the accused for quashing

the proceedings u/s 138 of the Negotiable Instruments Act, initiated by Ajay Kumar Sharma, hereinafter referred to as the Complainant, which are

pending in the Court of Judicial Magistrate, Billawar.

Facts as they emerge from the petition and the documents attached with it are by and large brief, which are noticed hereinafter.

As per complainant, a Cheque in the sum of Rs. 20,000/- was issued by the accused in his favour, when presented for encashment, it was

dishonoured by the Banker of the accused on 30-6-1998, intimation regarding such dishonour was received by the complainant on 3-7-1998. No

action was initiated by him nor any notice of dishonour was issued.

Cheque was again represented for encashment. This was again dishonoured by the Banker of the accused on 12-8-1998. Intimation in this behalf

was received by the complainant on 24-8-1998. A notice of dishonour as also calling upon the accused to make the payment was also issued on

2-9-1998 by the complainant. Finally, the complaint u/s 138 of the Negotiable Instruments Act was filed before the trial Magistrate on 9-9-1998.

After the preliminary evidence had been recorded by the trial Court and on its being satisfied that a prima facie case u/s 138 of the Negotiable

Instruments Act is made out against the accused, summoning order was passed against him. Petitioner has questioned that summoning order in the

present proceedings.

Learned counsel appearing for the petitioner placed reliance on the provisions of Section 138 of the Negotiable Instruments Act, particularly

Proviso (c) thereof and on its basis, he urged that the complaint was liable to be dismissed being premature. On the other hand, learned counsel

appearing for the complainant fairly admitted that the complaint is definitely premature but urged that it is not liable to be dismissed, because the

accused even after the expiry of fifteen days of the receipt of notice, which was despatched on 2-9-1998 has not cared to pay the amount of the

Cheque in question therefore, prematurity of the complaint does not entitle the accused to ask for its dismissal. Reliance in this behalf was placed

on a decision of Rajasthan High Court reported in Bhanwar Lal Vs. State of Rajasthan and Others, . With a view to properly appreciate the

respective contentions, provision of Section 138 (supra) need to be referred to, which are extracted herein below :-

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 that 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 extend to one year, 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) the cheque has 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;

(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 notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of

the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due

course of the cheque, within fifteen days of the receipt of the said notice.

Explanation.- For the purposes of this section ""debt or other liability"" means a legally enforceable debt or other liability.

This provision has been brought on the Statute Book by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment)

Act, 1988 with effect from 1st April, 1989.

The purpose of inclusion of Sections 138 to 142 by this Amendment Act was to enhance the acceptability of cheques in settlement of liabilities

by making the drawee liable for penal consequences in case the cheque issued by him bounces for any reasons, may be due to insufficiency of

funds or it exceeds the arrangements or payment having been stopped by providing time schedule within Clauses (b) and (c) of the proviso to

Section 138 (supra) even after the issuance and dishonour of the cheque. In fact adequate protection is given to an honest drawer of the cheque.

Because when a cheque is issued, there may be a situation that the drawer may be anticipating that by the time it is sent for clearance by the

Drawee/its holder in due course for encashment, his funds may pour in or that he had put cheques for clearance, which may come after encashment

and the amount credited to his account. There can be so many such eventualities in the course of business. Irrespective of all those after dishonour,

within the time frame there is another opportunity for the Drawer to make payment of the dishonoured cheque. It is only after the failure of the

Drawer to absolve himself by making payment of the said dishonoured cheque to the Drawee/its holder in due course, that gives the cause of

action to a person like complainant in the present case to maintain an action u/s 138 of the Negotiable instruments Act. Admittedly, as well as in

the face of the facts existing on the file of the trial Court before expiry of the period of notice within the meaning of Clause (c) reproduced here in

above, present complaint has been filed. Unfortunately Magistrate also without either caring to look to the provisions of law and or without

applying his mind to the facts and circumstances of the case including the documents attached with it has issued the process in a mechanical and

perfunctory manner.

5A. It may be worthwhile also to point out here that issuance of process against the accused visits him with serious consequences. May not be by

making an indepth study, yet the Magistrate is to scan the case before him and then if he comes to a conclusion that the unrebutted agreements

made in the com plaint as well as the statement(s) recorded during the course of preliminary evidence a prima facie case is made out, then he will

be justified in issuing process against an accused. As already noticed, there is complete non-application of mind to the facts of the case as also to

law governing the same, when the order of summoning was passed on 9-9-1998 by the trial Magistrate is examined.

Now remains as to be seen as to whether the complainant can take any advantage of the decision of Rajasthan High Court in the case of

Bhanwar Lal v. State of Rajasthan (supra) on which reliance was placed by Mr. Kamal Gupta, learned counsel appearing. It may be noted in this

behalf that the provisions of Section 138 (supra), when invoked result in penal consequences where under an accused can be convicted and in the

process of punishing him he can be imprisoned which may extend to one year, or with fine which may extend to twice the amount of the cheque, or

with both. Keeping in view this penal provision of law, its strict compliance is a quid-pro-quo. In the face of this legal position, failure to meet the

requirement of demand within the stipulated period must visit the party like accused in the present case with penal consequences. Therefore, the

compliance the such provision has also to be strictly made out from the record of the case.

After having given my thoughtful consideration, I have not been able to persuade myself to toe in line with a view taken by the learned Judge of

Rajasthan High Court in the case relied upon on behalf of the complainant referred to here in above.

When a reference is made to the complaint u/s 138 of the Negotiable Instruments Act initiated by the complainant, there was nothing to suggest

that when the notice was issued and whether it was served upon the accused or not. In the context of Clause (c) of Section 138 (supra) date of

receipt of notice assumes significance, because it is only when the Drawer of the Cheque fails to make payment of the amount of money to the

payee ""within fifteen days of the receipt of the said notice"" (Emphasis supplied) that the complaint can be maintained by the former. Thus before an

order summoning an accused person is passed by the Magistrate, it has to be made out by the complainant that the drawer has failed to make the

payment of the amount of money to him within fifteen days of the receipt of the said notice, therefore, unless, the date of receipt of the notice is

clearly made out, it is not possible to reckon this period of fifteen days.

No other point is urged.

In view of the aforesaid discussion, there is prima facie merit in the submission of Mr. J. S. Cheema, learned counsel appearing for the petitioner

and as a consequence of it, complaint filed u/s 138 of the Negotiable Instruments Act in-File No. 35/ Criminal, titled as Ajay Kumar Sharma v.

Kumari Sunita Charak, pending in the Court of Judicial Magistrate, Billawar as also the summoning order dated 9-9-1998 is hereby quashed and

set aside.