Ashok Verma v. Ritesh Agro Pvt. Ltd. .

Harmohinder Kaur Sandhu, J.:— The present petition has been filed by Ashok Verma under Section 482 CrPC for quashing the criminal complaint dated 3.8.1991 Annexure P/4 and the summoning order dated 21.11.1992 Annexure P/5, issued by Judicial Magistrate Ist Class, Ludhiana.

2. The brief facts of the case necessary for the disposal of this petition are that Ritesh Agro Pvt. Ltd. supplied some readymade garments to the petitioner at Delhi on credit. The petitioner had been making part payment for the goods received but still a sum of Rs. 71,640.95 became due as price of the goods. The respondent requested the petitioner to make payment of this amount and on 6.4.1991 the petitioner handed over cheque bearing No. 476724 dated 10.1.1991 drawn on Punjab National Bank, Greater Kailash-I, New Delhi. The cheque was duly endorsed in the name of the respondent and all cuttings on the cheque were attested. The respondent presented the cheque for payment through its banker at Delhi but the cheque was dishonoured and was returned vide memo dated 13.7.1991 on the ground that there were insufficient funds in the account of the petitioner and the bank was not in a position to pay the amount. A notice under Section 138 of the Negotiable Instruments Act (the Act for short) was served on the petitioner on 20.7.1991 against postal receipt No. 4431 which was duly received by the petitioner but no payment was made, so the complaint was filed on 3.8.1991

3. The petitioner alleged that Section 138 of the Act envisaged a clear 15 days' notice to the drawer of the cheque and the time was to be computed from the date of receipt of the notice, but the impugned complaint had been filed before the expiry of 15 days and the complaint was liable to be quashed on this ground. It was further pleaded that the respondent company had been wound up and it merged in Ritesh Industries Limited, so it had no locus standi to pursue the complaint.

4. In the return this fact was denied that the respondent-Company had been wound up and it was maintained that the business of the company had been expanded and it had become a public limited company. It was alleged that condition regarding 15 days clear notice was fulfilled and even otherwise this objection was of hypertechnical nature and superfluous.

5. I have heard the counsel for the parties.

6. The only contention raised by the learned counsel for the petitioner before me is that a period of 15 days had not expired after the issuance of notice when the complainant was presented in Court and its cognizance was taken. It was not open to the complainant to invoke the process of a criminal Court alleging an offence under Section 138 of the Act before the period prescribed in the section and this infirmity was not curable and was fatal to the case of the prosecution. In order to appreciate the contention raised by the learned counsel, it will be proper to go through the provisions of Section 138 of the Act, which run as under:—

“138. 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 provision 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 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 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.”

7. A perusal of the above section shows that while the section defines the necessary ingredients of the offence and punishment that can be awarded for the commission of the offence, the proviso to the section lays down the conditions precedent for the commission of the offence. According to this proviso the necessary ingredients of the offence are that the cheque was presented to the bank within a period of six months from the date on which it was drawn or the period of its validity, that the cheque is returned unpaid because of insufficiency of funds or that the amount of the cheque exceeded the amount arranged to be paid from the bank and the payee gave a notice to the drawer claiming the amount within 15 days of the receipt or the information from the bank regarding the return of the cheque and the drawer failed to make payment within 15 days of the receipt of the notice. Under sub-clause (c) of the proviso, a 15 days time is granted to the drawer of the cheque to make payment and unless this period elapsed and no payment was made, the drawer was not liable for any offence under Section 138 of the Act. This very question was considered in Rakesh Nemkurnar Porwal v. Narayan Dongu Joglakar, 1993 (2) Recent Criminal Reports 210 : 1993 ISJ Banking 251, where a complaint was filed before the expiry of 15 days. It was held that the complaint was pre-mature and still-born. It was further observed that the offence became complete only when the period prescribed under Section 138 proviso (b) of the notice period expired and the payment was not made. The provisions being penal, the ingredients of the offence and the time frame prescribed was to be strictly construed.

8. In Ess Bee Food Specialities v. Kapoor Brothers, 1992 Criminal Law Journal 739, it was held:—

“Under Section 142-B of the Act the cause of Action will be completed only when the payee failed to make the payment of the amount of the cheque within 15 days of the receipt of the notice provided by the proviso (k) to Section 138. The offence under Section 138 will, thus, be completed only when the period of notice expires and the payment is not made.”

9. In the instant case this fact is not denied that the complaint was presented in Court before the expiry of period of 15 days after the service of notice on the petitioner. Notice was sent to the petitioner on 20th July, 1991 and it is not mentioned in the complaint as to when that notice was received by the petitioner. The complaint was presented in the Court of Judicial Magistrate, Ludhiana, on 3.8.1991 On the same day the cognizance of the offence was taken and the case was fixed for the statement of the complainant. 15 days time was not, thus, granted to the party to make payment of the amount and the complaint was premature. It is liable to be quashed on this ground alone.

10. In view of my above findings, I allow this petition and quash the complaint Annexure P/4, summonin order Annexure P/5 and subsequent proceedings arising therefrom.

Petition allowed.