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Judgment
Umesh Chandra Banerjee, CJ
Since the decision of the Privy Council in the oft-cited decision in Emperor v. Ncizir Ahmed, AIR 1945 PC 18, the law as regards the interference with the investigation by the police in matters which are within their province and domain stands well settled to the effect and in the words of Lord Porter, "no doubt, if no cognizable offence is disclosed and still more if no offence of any kind is disclosed the police would have no authority to undertake an investigation" and the converse situation, therefore, is that an investigation cannot be quashed if some cognizable offence is disclosed by the first information report. The observations of the Supreme Court in State of West Bengal and Others Vs. Swapan Kumar Guha and Others, and in the case of State of Haryana and others Vs. Ch. Bhajan Lal and others, as also in the case of Union of India and others Vs. B.R. Bajaj and others, , lend concurrence to the view as above. The factum of exercise of revisional jurisdiction u/s 482 ofthe Code of Criminal Procedure or that of the provisions under Article 226 of the Constitution does not really make any difference to this well settled proposition that investigation can be quashed only in the event of non-disclosure of a cognizable offence in the first information report.
The revisional jurisdiction as conferred on to the High Court in terms of provisions of Section 482 of the Code of Criminal Procedure may be exercised to give effect to an order under the Code; to prevent abuse of the process of the Court; to otherwise secure the ends of justice. It is undoubtedly true that no genera! principle of rule can be evolved to govern the exercise of this inherent jurisdiction of the Court as saved by the Cede and it will be a matter for determination in each individual case whether the circumstances obtaining in that case make it incumbent on the Court to exercise such power to acliieve the objects mentioned in the Section. The legislative intent for retention of !he inherent power of a Court is clear and categorical to the effect that the law Courts exist to subserve the ends of justice and in the event of justice of the situation demands any interference, (here ought not to be any hesitation in the matter of exercise of jurisdiction. But this exercise of jurisdiction is also restrictive and cannot be said to be available in any and every matter and it is for this purpose only judicial decisions lay a guiding principle that in the event of there being a complaint without disclosure of an offence, it would be a plain exercise of judicial power to quash the same- on the same breath the law Courts have also settled since die decision of Nazir Ahmed''s case (supra) that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes upon them the duty of enquiry.
The principal issue involved in this petition is in regard to the effect of Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 19S5onaproceeding initiated u/s 138 of the Negotiable Instruments Act. For convenience sake, Section 138 of the Negotiable Instruments Act is set out herein below. Section 138 reads:
"Where any cheque drawn by a person on an account maintained by him with a banker for pa>Tncnt 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 tliat 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 provision of this Act. be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twee 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 a 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 tlie receipt of the said notice.
Explanation .''-For the purposes of this Section, "debt or other liability" means a legally enforceable debt or other liability."
Incidentally be it noted that the Chapter containing the penalties in case of dishonour of cheques for insufficiency of funds in the accounts has been inserted by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment Act), 1988 with effect from 1-4-1989. The Section finds itself in Chapter XVII of the Negotiable Instalments Act which stands incorporated by the Act of 1988 in place and state of the '' ''Notaries Public'' by reason of the repeal of the same by the Notaries Act, 1952. This Chapter has been inserted with a view to enhance the acceptability of the cheques in settlement of the liabilities by making the drawer liable for penalties in case of bouncing of cheques due to insufficiency of funds in the accounts or for reasons that it exceeds the arrangements made by the drawer, with adequate safeguards to prevent harassment of honest drawers as is noticed in the body of the Section itself. In the Statement of Objects and Reasons appended to the Bill explaining the provisions of the new Chapter, it has been provided:
"Ihis clause (Clause (4) of the Bill) inserts a new Chapter XVII in the Negotiable Instruments Act, 1881. The provisions contained in the new Chapter provide that where any cheque drawn by a person for the discharge of any liability is returned by the bank unpaid for the reason of the insufficiency of the amount of money standing to the credit of the account on which the cheque was drawn or for the reason that it exceeds the arrangements made by the drawer of the cheque with the bankers for that account, the drawer of such cheque shall be deemed to have committed an offence. In that case, the drawer, without prejudice to the other provisions of the said Act, shall be punishable 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.
The provisions have also been made that to constitute the said offence-
a) such cheque should have been presented to the bank within a period of six months of the date of its drawal or within the period of its validity, whichever is earlier; and
(b) the payee or holder in due course of such cheque should have made a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within fifteen days of the receipt of the infonnation by him from the bank regarding the return of the cheque unpaid; and
(c) the drawer of such cheque should have failed to make the pajmcnt of the said amount of money to the payee or the holder in due course of the cheque within fifteen days of the receipt of the said notice.
It has also been provided that it shall be presumed, unless the contrary is proved, that the holder of such cheque received the cheque tn the discharge of a liability.
Defence which may or may not be allowed any prosecution for such offence have also been provided to make the provisions effective. Usual provision relating to the offences by companies has also been included in the said new Chapter. In order to ensure that genuine and honest bank customers are not harassed or put to inconvenience, sufficient safeguards have also been provided in the proposed new Chapter. Such safeguards are -
(a) that no Court shall take cognizance of such offence except on a complaint, in writing, made by the payee or the holder in due course of the cheque;
(b) that such complaint is made within one month of the date on which the cause of action arises; and
(c) that no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate or a Judicial Magistrate of the first class shall try any such offence."
At this juncture, it would also be convenient to note Section 22(1) of the Sick Industries Act for its true purport and for proper appreciation of the submissions made in the matter. Section 22(1) reads as follows:
"Where in respect of an industrial company, an inquiry u/s 16 is pending or any scheme referred to u/s 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal u/s 25 relating to an industrial Company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) of any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding-up of (he industrial company or for execution distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans, or advance granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority."
The contextual facts depict that a cheque was issued duly signed by the Managing Director on beltalf of the Company on 21-10-1995 and the same was dishonoured on 7-2-1996. The service of notice in terms of provisions of Section 138 of the Negotiable Instruments Act was effected on 24-2-1996. The oflcnce,therefore, admittedly stands completed on 10-3-1996 in terms of the provisions of Section 138 of the Negotiable Instruments Act. It is at this juncture it has been contended that since the liability of the Company stands suspended by reason of expressed provision as laid down in Section 22{1) of the Sick Industries Act, question of continuation of the criminal proceeding u/s 138 of the Negotiable Instruments Act docs not and cannot arise. It has been contended that the language of Section 138 is clear and categorical to the effect that the cheque has been issued in discharge of whole or part of a debt or liability and by reason of suspension of such liability, no prosecution can be allowed to be continued to the harassment of the petitioner. At the first blush, however, the issue raised seems to be an interesting one. But on a detailed scrutiny of facts and tiic law, question of the same having any efficacy does not arise. Our criminal jurisprudential system envisages that once an offence is committed, that offence continues to be an offence - this is, however, apart from the applicability of the Sick Industries Act in the matter in issue and which should be dealt with presently herein below. But for the present, as has been noted earlier, the offence stands completed on 10-3-1996 and the declaration of the Company as a sick Company was effected on 17-7-1997, that is to say more than one year and four months later than the completion of offence. In any event, once the offence is complete and the liability for prosecution has accrued, question of stay of prosecution does not arise without there being a specific exclusion clause in the relevant statute. Oblique reference, if at all, would not do. It is on this score, we shall have to appreciate as to whether Section 22(1) of the Sick Industries Act has any effect on the pending proceeding. The language of Section 22, in particular the heading records: "Suspension of legal proceedings, contracts, etc.," and it is on this score it has been contended that ''legal proceedings'' ought to be read to include both civil and criminal proceedings and as such Section 22(1) authorises the Court atleast to suspend the proceedings pending against the Director till after the matter is concluded by the Board in terms of the provisions of the Sick Industries Act. We are, however, unable to lend our concurrence to the same. Section 138 is a penal provision and incorporates a strict liability and the law Courts cannot also but interpret the language used (herein strictly. The Legislature has taken great care and consideration in the matter of user of the language by reason of the user of the expression "discharge in whole or any part of any debt or other liability" - it, therefore, envisages that in the event a cheque is issued not for the purposes of discharge of any debt or liability, the maker of the cheque is not liable for prosecution, to wit, if a cheque is given by way of a gift and the same stands dishonoured, question of attributing any liability on the basis thereof in terms of Section 138 docs not arise. The experience obviously disclosed that in recent years a deliberate fraud is being perpetrated to avoid or to postpone the liability through the process of issuance of cheques. Be it recorded that there is a statutory exclusion of the essential element of mem rea in the matter and thefaclittn of dishonour of the cheque by itself embraces the commission of an offence provided of course the cheque has been issued to discharge a debt or liability either in full or any part.
Turning attention on to the point as to the meaning to be attributed to die legal proceedings, we do deem it fit to record that the tenor of the legislative intent is apparently clear by reason of the user of expressions ''no suit for recover)'' of money or for enforcement of any security in respect of any loan or advance granted to the industrial company sliatl lie or be proceeded with except with the consent of the Board or the Appellate Authority as the case may be''. The recovery of money or enforcement of charge as spoken of by the Legislature cannot in turn but be stated to be a civil liability. Tne criminal element, in the event there was any legislative intent, could have been introduced by the Legislature itself in the event there was any such intent. Be it placed on record that the law Courts ought not read in the Section anything which docs not require it to be read having due regard to the language used therein. Criminal liability in terms of Section 138 is an absolute liability and, thus, stands irrespective of the provisions of Section 22(1) of the Sick Industries Act. The Sick Industries Act also applies to tlie recovery of debts by way of a suit or proceeding for winding up or enforcement of security for the industrial company. It is a special enactment brought into existence to meet the specific contingencies therein and this cannot be applied in the absence of a specific provision to negate the effect of another legislative provision, to wit, Section 138 of the Negotiable Instruments Act, specially in the absence cf extending the ambit of the provision of Section 22(1) to the criminal element involved by reason of the other statute. A plain reading of Section 22 of the Sick Industries Act reveals the true intent of the legislature to keep in abeyance the civil liability or debt of an industrial company. Sub-section (3) of Section 22 of the Sick Industries Act also lends support to the observation as above. For convenience sake, sub-section (3) is set out herein below. It reads as under:
"Where an inquiry u/s 16 is pending or any scheme referred to in Section 17 is under preparation or during the period of consideration of any scheme u/s 18 or where any such scheme is sanctioned thsreunder, for due implementation of the scheme, the Board may by order dclcare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or tliat all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified by the Board:
Provided that such declaration sliall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall net exceed seven years in the aggregate.''''
It is, thus, clear that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force to which such sick industrial company is a party or which may be applicable to such sick industrial company shall remain suspended. The offence if committed earlier has not been spoken; neither, therefore is covered within the ambit of either sub-section (1) or subsection (3) of Section 22 of the Sick Industries Act. In this context, the observations of this Court in the case of B. Mohan Krishna v. Union of India 1996 Crl. IJ 636 seem to be very apposite. This Court in paragraph 47 of the report observed:
"Evidently, the learned Counsel for the petitioner had in view Section 22 of the Sick Industrial Companies (Special Provisions) Act. The Section contemplates suspension of legal proceedings in respect of aii industrial Company when an enquiry u/s 16 is pending or a scheme u/s 17 is under preparation or sanctioned or where an appeal u/s 25 relating to an industrial company is pending. Notwithstanding anything contained in the Companies Act, 1956, no proceedings for winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of security against an industrial company or any guarantee in respect of any loans or advances granted to the industrial company shall lie or be proceeded with further except with the consent of the Board or as the case may be me appellate authority. What the section contemplates is that none of the diings mentioned therein can be allowed to take place without the consent of the Board or the appellant audiority despite the provisions to the contrary in me Companies Act, 1956. Its sphere of operation is confined to proceedings for the winding up of an industrial company. It docs not in any way bar prosecution of a company or any of its employees under the provisions of the Negotiable Instruments Act or any other penal law."
Some reliance was placed on the decision of the Supreme Court in the case of Maharashtra Tubes Ltd. Vs. State Industrial and Investment Corporation of Maharashtra Ltd. and Another, in support of the petition, wherein the Supreme Court observed that the expression ''proceedings'' in Section 22(1) cannot be confined to legal proceedings understood in the narrow sense of proceedings in a Court of law or a legal tribunal for attachment of debt as property. While it is true that the Supreme Court desired that a wider meaning and a broader interpretation ought to be had in so far as the word ''proceedings'' is concerned, but the contextual facts of the Supreme Court decision does not, in fact, lend any support to the submissions on the part of the petitioner herein. The Supreme Court recorded its opinion to the effect: "''We arc, therefore, of the opinion dial where an inquiry is pending u/s 16/17 or an appeal is pending u/s 25 of the 1985 Act, there should be cessation of the coercive activities of the type mentioned in Section 22(1) to permit the B1FR to consider what remedial measures it should take with respect to the sick industrial company". We, mereforc, have to fall back upon the language of the statute which is unambiguous and clear enough to exclude the criminal prosecution. Incidentally, be it noted that the Act did undergo a change even in 1993 wherein ''the suit for recovery of money or for enforcement of any security against industrial company'' has been amended (vide Sick Industrial Companies (Special Provisions) Amendment Act, 1993) and that amendment has been effected into the statute book long after the incorporation of the Chapter XVII of the Negotiable Instruments Act (Banking, Public Financial Institutions and Negotiable Instruments Law (Amendment) Act, 1988 (66 of 1988) with effect from 1-4-1989, comprising of Section 138 - 142) and in the event of mere being a specific intent of the Legislature to incorporate a situation, as has been urged in the matter under consideration, there was no difficulty existing in the matter of expression of such an intent in more specific and clear language. The law is well settled to the effect diat however wider meaning may be attributed to the particular word, the same cannot be read de hors the true intent and purport of the Legislative intent and the meaning to be conferred on to the words used by the Legislature must have a strict correlation with the intent of the Legislature. The Supreme Court judgment in Maharashta Tubes'' case (supra) does not lend any concurrence to the submissions in support of the petition in any way whatsoever and in this perspective it can safely be concluded that the view expressed by the Supreme Court does not, in any way, militate against the view as above, more so by reason of the fact that Section 22(1) docs not take within its sweep the criminal prosecution against the Company. In this context also the observations of the single Bench judgement of this Court in Nagarjuna Finance Ltd., Hyd. Vs. Kanosika Laboratories Ltd. and Another, , ought to be noted wherein the learned single Judge observed that the words ''other legal proceedings'' will not embrace proceedings like those u/s 138 of the Negotiable Instruments Act. The learned single Judge went on to observe that the criminal proceedings, particularly like Section 138 of the Act, have no bearing whatsoever to the purposes for which this section has been enacted.
In the case of Sri Srinivasa Trading Co. v. Slate of A. P., 1997 (2) ALT (Crl) 626 another learned single Judge of this Court while dealing with a matter pertaining to the Provincial Insolvency Act vis-a-vis Section 138 of the Negotiable Instruments Act observed that the offence u/s 138 is a statutory offence and the petitioners 1 to 3 are being prosecuted for the issue of cheque without there being sufficient funds in the bank and thus the proceedings are totally different and by no stretch of imagination it can be said that Section 28(2) prohibits the continuation of criminal proceedings initiated for dishonour of cheques u/s 138 of the Negotiable Instruments Act without the leave of the Court against a person who is seeking to adjudicate as insolvent.
Reference has also been made to the decision of the Supreme Court in the case of Real Value Appliances Ltd. Vs. Canara Bank and Others, . But in our view the same does not really advance the matter any further. As such we need not dilate further in regard thereto.
In that view of the matter, we are unable to record our concurrence to the submissions made in support of the petition. The petition, therefore, fails and is dismissed. There shall, however, be no order as to costs.