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Zenith Fashions Makers (P) Ltd v. Ultimate Fashion Makers Ltd & Anr
Judgment Summary — Manju Goel, J.
Factual and Procedural Background
The respondent filed a complaint under Section 138 of the Negotiable Instruments Act for the dishonour of two cheques:
- Cheque No. 615385 dated 20.7.2003 for Rs. 8,00,000/-;
- Cheque No. 615387 dated 20.9.2003 for Rs. 3,00,000/-.
Both cheques were dishonoured for insufficiency of funds; the bank return memo is dated 20.9.2003. A legal notice under Section 138 was issued on 15.10.2003 by registered post and speed post; the postal acknowledgment card shows service on 18.10.2003. The complainant asserted that no payment was made within 15 days of the notice. The complaint was presented on 31.10.2003. The Metropolitan Magistrate took cognizance and directed issuance of process on 31.10.2003 itself.
The petitioner filed a petition under Section 482 Cr.P.C. contending that, because service was on 18.10.2003, the 15-day period for compliance expired on 3.11.2003, and therefore the complaint presented and taken cognizance of on 31.10.2003 was premature and the summoning order was bad and liable to be quashed. The petitioner also disputed liability on the cheques and stated it would not pay the amounts; there was no assertion that the petitioner would have paid if given time.
Legal Issues Presented
- Whether a complaint under Section 138 of the Negotiable Instruments Act, presented and taken cognizance of before the expiry of the 15-day period specified in the demand notice, is prematurely filed and therefore liable to be quashed.
- Whether the Magistrate's taking of cognizance before the maturity of the cause of action can defeat the complainant's right to prosecute, particularly where limitation under Section 142 of the Negotiable Instruments Act would bar a fresh complaint if the present proceedings are set aside.
Arguments of the Parties
Petitioner's Arguments
- The notice of demand was served on 18.10.2003, so the 15-day period for compliance expired on 3.11.2003; therefore the complaint presented on 31.10.2003 was premature.
- There was no offence at the time the complaint was presented and the Magistrate wrongly took cognizance on 31.10.2003; consequently the order summoning the petitioner is bad and the complaint should be quashed.
- The petitioner maintained that it disputed liability and would not pay the cheque amounts; there was no contention that it would have paid if given the 15 days.
Complainant's Position (as recorded)
- The complainant asserted that the demand notices were duly received and that no payment in respect of the dishonoured cheques was made within 15 days as required by law.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Narsingh Das Tapadia v. Goverdhan Das Partani & Anr. reported as 2000 (56) DRJ (Suppl) 293 (SC) : 2000 (2) JCC (SC) 615 | The principle that mere presentation of a complaint at an early date does not necessarily render it liable to be dismissed; cognizance taken by the Magistrate when the cause of action has matured is the relevant factor. | The court relied on this authority to explain that premature presentation alone is not fatal; what matters is when cognizance is taken. The opinion distinguishes the present case because the Magistrate here did take cognizance before maturity. |
| A.R Antulay v. R.S Nayak & Anr. reported as ((1998) 2 SCC 602 (671)) | Affirms the maxim actus curiae neminem gravabit — an act of the court shall prejudice no man — and the duty of courts to prevent their acts from injuring suitors; justice requires remedying wrongs caused by court action. | The court invoked this authority to support the proposition that a mistake by the Magistrate should not be permitted to defeat the complainant's right to prosecute when no prejudice to the accused is shown and when quashing would prevent any fresh complaint because of limitation. |
| Rodger v. Comptoir D'escompte De Paris | Statement (via Lord Cairns) that courts must take care that acts of the court do no injury to suitors; the duty extends through the hierarchy of courts. | Quoted (via A.R. Antulay) to reinforce the principle that the aggregate judicial system must ensure that an act of the court does not prejudice a party. |
| Soni Vrajlal v. Soni Jadavji | Referred in the context of discussion about judicial errors and per incuriam directions; used to illustrate that basic fundamentals of administration of justice require remedying wrongs caused by court mistakes. | The opinion cites this case’s discussion (via A.R. Antulay) to support the proposition that procedural errors of the court should not lead to an unjust result. |
| Anwar Ali Sarkar case (referenced) | Referenced as binding precedent in the context of procedural correctness (Sections 6 and 7 of the 1952 Act were mentioned in relation to per incuriam findings). | Mentioned in the context of explaining the judicial principle that court errors should be remedied; not applied directly to the facts beyond this contextual reference. |
Court's Reasoning and Analysis
The court analysed the sequence of events and the relevant legal principle from precedent:
- The court acknowledged that the complaint was presented and that the Magistrate took cognizance before the expiry of the 15-day period specified in the notice; thus at the moment of cognizance the statutory cause of action had not yet matured.
- The court considered the Supreme Court's decision in Narsingh Das Tapadia, which holds that mere early presentation of a complaint does not necessarily require dismissal; the crucial factor is when the Magistrate takes cognizance.
- The present case differs from Narsingh Das because here the Magistrate did take cognizance immediately upon presentation, i.e., before maturity; the court therefore examined whether that judicial action can be permitted to prejudice the complainant.
- The court reasoned that setting aside the proceedings on the ground of the Magistrate's premature cognizance would destroy the complainant's right to prosecute because Section 142 of the Negotiable Instruments Act would bar a fresh complaint due to limitation.
- The court found no prejudice to the petitioner caused by the Magistrate's premature action; the petitioner had not shown any substantive prejudice (and indeed denied liability to pay), so the error was a technical flaw of the court rather than a fault of the complainant.
- The court invoked the maxim actus curiae neminem gravabit and authorities (including A.R. Antulay and Rodger v. Comptoir D'escompte De Paris) to support the proposition that an act of the court should not operate to the prejudice of a party and that procedural mistakes should not defeat substantive rights where justice requires relief.
- Balancing these considerations, the court concluded that quashing the complaint on this ground would be incorrect and unjust because it would deny the complainant a remedy for no fault of its own.
Holding and Implications
Holding: The petition under Section 482 Cr.P.C. is dismissed.
Implications:
- The complaint under Section 138 of the Negotiable Instruments Act is not quashed and may proceed despite the Magistrate having taken cognizance prior to the expiry of the 15-day period.
- The court emphasised that the Magistrate's premature taking of cognizance was a mistake of the court which should not be permitted to defeat the complainant's right, particularly because Section 142 of the Negotiable Instruments Act would bar a fresh complaint if these proceedings were set aside.
- The opinion does not purport to lay down a new precedent; it applies established principles (as discussed above) to prevent an injustice that would arise from allowing a judicial error to work prejudice on the complainant.
Disposition: Petition under Section 482 Cr.P.C. dismissed.
Manju Goel, J.:— Courts are often accused of delaying disposal of cases. A peculiar question has cropped up in this case because a Metropolitan Magistrate (in short ‘M.M’) has been too quick to take action on a complaint. The complaint under Section 138 of Negotiable Instrument Act was filed by the respondent for dishonour of two cheques No. 615385 dated 20.7.2003 of Rs. 8,00,000/- and No. 615387 dated 20.9.2003 of Rs. 3,00,000/-. Both the cheques were dishonoured on account of insufficiency of funds. The return memo of the bank is dated 20.9.2003 The legal notice under Section 138 of Negotiable Instrument Act was issued on 15.10.2003 through Regd. Post as well as through speed post. The postal acknowledgment card shows service on 18.10.2003 The complainant pleaded that the notices were duly received but no payment in respect of the dishonoured cheques was made within 15 days of the notice as was required by the law as well as by the notice. The complaint is presented on 31.10.2003 The Magistrate took cognizance on 31.10.2003 itself and directed issue of process on the same day. What is contended in this petition under Section 482 Cr.P.C is that the notice of demand being of 15.10.2003, despatched on 17.10.2003 and received on 18.10.2003, the complaint was filed within 15 days after service of notice and hence was pre-mature as the cause of action could accrue only after 15 days of the notice, i.e, on 3.11.2003
2. There is no dispute about the fact that the complaint was presented before the expiry of 15 days within which the petitioner/accused could have complied with the notice by paying the amount of the cheques. There is also no dispute about the fact that the Magistrate took cognizance before the expiry of the 15 days, i.e, when the offence had not come into existence. According to the petitioner, since there was no offence on the date the complaint was presented, the Magistrate could not have taken cognizance and, therefore, the order of summoning is bad and the complaint, therefore, can be quashed. At the same time, there is no plea on the side of the petitioner that the petitioner would have paid the cheque amount had the respondent given it the required time. In fact, the petitioner is disputing the very liability under the cheque and is categorical that it shall not pay the amount of the two cheques in question.
3. The situation, therefore, is that the cause of action in any case would have arisen on the expiry of 15th day of the service which in this case would have been 3.11.2003 A nearly similar situation arose in the case of Narsingh Das Tapadia v. Goverdhan Das Partani & Anr. reported as 2000 (56) DRJ (Suppl) 293 (SC) : 2000 (2) JCC (SC) 615. In this case the conviction by the trial court for an offence under Section 138 of Negotiable Instrument Act was set aside by the High Court holding that the complaint was pre-mature. The Supreme Court held that mere presentation at an early date need not necessarily render the complaint liable to be dismissed and that such a pre-mature presentation would not confer any right upon the accused to be absolved from the criminal liability for the offence committed. In that case although the complaint was presented pre-maturely the Magistrate did not take cognizance immediately on presentation of the complaint. The Magistrate took cognizance subsequently and by the time the Magistrate took cognizance more than 15 days of the notice had passed. Accordingly the Supreme Court held that the Magistrate had taken cognizance when the cause of action had matured and, therefore, there was no illegality in the proceedings. Explaining the law on the subject, the Supreme Court said:
“10. Mere presentation of the complaint in the court cannot be held to mean that, its cognizance had been taken by the Magistrate. If the complaint is found to be pre-mature, it can await maturity or be returned to the complainant for filing later and its mere presentation at an earlier date need not necessarily render the complaint liable to be dismissed or confer any right upon the accused to absolve himself from the criminal liability for the offence committed.”
4. Keeping in view this judgment of the Supreme Court, the complainant could have been entirely safe if the Magistrate had waited for the period of 15 days to lapse. The question, therefore, is whether the complaint can be quashed on this ground. It is clear from the above narration that complaint, even though filed before the maturity of the cause of action, could not have been quashed only on that ground. The additional factor that has taken place in this case is the cognizance by the Magistrate. Can this action of the Magistrate damage the right of the complainant? Can an action of the court defeat the legitimate claim of the complainant to prosecute the accused for the offence? As said earlier the situation would have been entirely safe had the Magistrate waited for three more days before taking cognizance.
5. In my opinion, the action of the court or in other words the mistake of the M.M cannot defeat the claim of the complainant. It cannot be lost sight of the fact that if the order of the Magistrate is set aside now no fresh complaint under Section 138 of Negotiable Instrument Act can be brought in view of the provisions of the limitation prescribed under Section 142 of the Negotiable Instrument Act. Therefore, the complainant, in that eventuality, will be denied the right to justice for no fault of his own. It has to be noticed that no prejudice of any kind has been caused to the petitioner by taking a pre-mature action. The mere technical flaw cannot be allowed to defeat the ends of justice.
6. In this case the age old maxim ‘actus curiae neminem gravabit - an act of the court shall prejudice no man’ can be recalled. Recalling this maxim, the Supreme Court in the case of A.R Antulay v. R.S Nayak & Anr. reported as (1998) 2 SCC 602 (671) had this to say:
“……It has been said long time ago that “actus curiae neminem gravabit” - an act of the court shall prejudice no man. This maxim is founded upon justice and good sense and affords a safe and certain guide for the administration of the law.
82. Lord Cairns in Rodger v. Comptoir D'escompte De Paris observed thus:
Now, there Lordships are of opinion, that one of the first and highest duties of all courts is to take care that the act of the court does no injury to any of the suitors, and when the expression ‘the act of the court’ is used, it does not mean merely the act of the primary court, or of any intermediate court of appeal, but the act of the court as a whole, from the lowest court which entertains jurisdiction over the matter up to the highest court which finally disposes of the case. It is the duty of the aggregate of those Tribunals, if I may use the expression, to take care that no act of the court in the course of the whole of the proceedings does an injury to the suitors in the court.
83. This passage was quoted in the Gujarat High Court by D.A Desai, J. speaking for the Gujarat High Court in Soni Vrajlal v. Soni Jadavji as mentioned before. It appears that in giving directions on February 16, 1984, this Court acted per incuriam inasmuch it did not bear in mind consciously the consequences and the provisions of Sections 6 and 7 of the 1952 Act and the binding nature of the larger Bench decision in Anwar Ali Sarkar case which was not adverted to by this Court. The basic fundamentals of the administration of justice are simple. No man should suffer because of the mistake of the court. No man should suffer a wrong by technical procedure of irregularities. Rules or procedures are the handmaids of justice and not the mistress of the justice. Ex debito justitiae, we must do justice to him. If the man has been wronged so long as it lies within the human machinery of administration of justice that wrong must be remedied. This is a peculiar fact of this case which requires emphasis.”
7. In my opinion, it will be incorrect and unjust to quash the complaint. The petition under Section 482 Cr.P.C is accordingly dismissed.
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