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Smt. Villa Naga Lakshmi Vs. Mutta Srinivasa Rao and anr. - Court Judgment

SooperKanoon Citation
SubjectCriminal
CourtAndhra Pradesh High Court
Decided On
Case NumberCri. Petn. Nos. 4350 to 4352 of 2004
Judge
Reported in2007CriLJ502
ActsNegotiable Instruments Act, 1881 - Sections 138 and 142; Negotiable Instruments (Amendment) Act, 2002; KP Act - Sections 64 and 64(3); Parent Act, 1995 - Sections 15; Income Tax Act - Sections 149 and 150(1); Code of Civil Procedure (CPC) , 1908 - Sections 20; Code of Criminal Procedure (CrPC) , 1973 - Sections 467, 468 and 473
AppellantSmt. Villa Naga Lakshmi
RespondentMutta Srinivasa Rao and anr.
Appellant AdvocateC. Praveen Kumar, Adv.
Respondent AdvocateT. Niranjan Reddy, Adv. for Respondent No. 1 and ;Public Prosecutor for Respondent No. 2
DispositionPetition allowed
Excerpt:
- cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of the maharashtra act cannot entertain appeals filed under section 9 by the employees working in schools which are established and administered by the cantonment board. teacher employed in the school run by cantonment board being covered under.....orderramesh ranganathan, j.1. seeking to have the proceedings in c.c. nos. 172, 277 and 287 of 2004, on the file of vii metropolitan magistrate, visakhapatnam quashed, the sole accused, in these three criminal cases, has filed criminal petition nos. 4350, 4351 and 4352 of 2004 before this court. since the petitioner-accused is the same in all the three cases, and as the question of law which arises for consideration is similar, all the three criminal petitions were heard together and are now being disposed of by a common order.2. the allegations in the complaint, filed in c.c. no. 172 of 2004 under sections 138 and 142 of negotiable instruments act, is that complainant is the absolute owner of 28 sq. yards of undivided and unspecified share of land, from out of an extent of 400 sq. yards.....
Judgment:
ORDER

Ramesh Ranganathan, J.

1. Seeking to have the proceedings in C.C. Nos. 172, 277 and 287 of 2004, on the file of VII Metropolitan Magistrate, Visakhapatnam quashed, the sole accused, in these three criminal cases, has filed Criminal Petition Nos. 4350, 4351 and 4352 of 2004 before this Court. Since the petitioner-accused is the same in all the three cases, and as the question of law which arises for consideration is similar, all the three criminal petitions were heard together and are now being disposed of by a common order.

2. The allegations in the complaint, filed in C.C. No. 172 of 2004 under Sections 138 and 142 of Negotiable Instruments Act, is that complainant is the absolute owner of 28 sq. yards of undivided and unspecified share of land, from out of an extent of 400 sq. yards situated in Sy. No. 23/5 part Butchirajupalem, which he purchased under Registered sale deed dated 17-10-2001 and Registered Document No. 3170 of 2001. He entered into an agreement for construction of a flat in a plinth area of 825 sft. in Sri Gayatri Nilayam and paid the entire construction cost of the said flat to the accused. On finding that the construction was inferior in quality, and not in accordance with the quality assured, the complainant requested the accused to replace the inferior material with quality material. The accused is said to have expressed her inability to replace the same and to have informed the complainant that, if he was not satisfied with the quality of work done by the accused, she was ready to refund the amount and take back the constructed flat. It is alleged that the accused did not obtain any permission from the Corporation, had induced the complainant and had deceived him to deliver the property. After deliberations and discussions with the Complainant, and other flat owners, the accused is said to have agreed to refund the amount due of Rs. 3,40,000/- by 30th November, 2002 and in turn the complainant had agreed to vacate, and handover vacant possession of the said flat to the accused, on receipt of the entire consideration. The accused is said to have issued cheque bearing No. 319607 dated 30-9-2002 for Rs. 1,40,000/- requesting the complainant to present the cheque by the end of the 1st week of October, 2002. The accused is said to have issued another post dated cheque dated 30-11-2002 for Rs. 2,00,000/-. On the complainant presenting the cheque, through his banker on 12-10-2002, the cheque was returned unpaid for the reason 'Insufficient Funds'. The complainant got issued registered notice dated 17-10-2002, which was received by the accused on 24-10-2002, to which the accused issued a reply on 26-10-2002. the complainant was filed, nearly a year later, on 16-10-2003. The petition filed to condone the delay in filing the complaint, in Crl. M.P. No. 1140 of 2004, was ordered and the delay was condoned.

3. The allegations in the Complaint, filed in C.C. No. 277 of 2004 under Sections 138 and 142 of Negotiable Instruments Act, are that the complainant is the absolute owner of 28 Sq. yards of undivided and unspecified share of land, from out of an extent of 400 sq. yards situated in Sy. No. 23/5 part Butchirajupalem, which he purchased under Registered sale deed dated 17-10-2001 and Registered Document No. 3170 of 2001, that he had entered into an agreement for construction of a flat in a plinth area of 825 sft. in Sri Gayatri Nilayam and had paid the entire construction cost of the said flat to the accused. On finding that the construction was inferior in quality, and not in accordance with the quality assured, the complainant requested the accused to replace the inferior material with quality material. The accused is said to have expressed her inability to replace the same and to have informed the complainant that, if he was not satisfied with the quality of work done by the accused, she was ready to refund the amount and take back the constructed flat. It is alleged that the accused did not obtain any permission from the Corporation, had induced the complainant and had received him to deliver the property. Eventually the accused agreed to refund the amount of Rs. 5,00,000/- by the end of 30th November, 2002 and the complainant agreed to vacate, and handover vacant possession of the flat to the accused, on receipt of the entire consideration of Rs. 5,00,000/-. The accused is said to have issued cheque bearing No. 319603 dated 30-9-2002 for Rs. 1,50,000/-requesting the complainant to present the cheque by the end of the 1st week of October, 2002. The accused is said to have issued another post dated cheque dated 30-11-2002 for Rs. 3,50,000/-. On the complainant presenting the cheque bearing No. 319603 for clearance on 10-10-2002 the cheque was returned unpaid, for the reason 'Insufficient Funds', vide memo dated 12-10-2002. The complainant got issued legal notice dated 17-10-2002 which was received by the accused on 24-10-2002, to which the accused sent a reply on 26-10-2002. The complaint was filed, nearly a year later, on 16-10-2003. The petition filed to condone the delay in filing the complaint, in Crl. M.P. No. 1142 of 2004, was ordered and, by order dated 7-4-2004, the delay was condoned.

4. The allegations, in the Complaint filed in C.C. No. 277 of 2004, under Sections 138 and 142 of the Negotiable Instruments Act, are that the complainant is the absolute owner of 28 sq. yards of undivided and unspecified share of land, from out of an extent of 400 sq. yards situated in Survey No. 23/5 part Butchirajupalem, which he had purchased under Registered sale deed dated 17-10-2001 and registered Document No. 3170 of 2001. He entered into an agreement for construction of a flat in a plinth area of 825 sq. feet in Sri Sai Gayatri Nilayam and paid the entire construction cost of the said flat to the accused. On finding that the construction was inferior in quality, and not in accordance with the quality assured, the complainant requested the accused to replace the inferior material with quality material. The accused is said to have expressed her inability to replace the same and to have informed the complainant that, if he was not satisfied with the quality of work done by the accused, she was ready to refund the amount and take back the constructed flat. It is alleged that the accused did not obtain any permission from the Corporation, had induced the complainant and had deceived him to deliver the property. After deliberations and discussions with the complainant, and other flat owners, the accused is said to have agreed to refund the amount due by 30th November 2002 and, in turn, the complainant had agreed to handover vacant possession of the flat, to the accused, on receipt of the entire consideration of Rs. 5,00,000/-. The accused is said to have issued cheque dated 30-9-2002 for Rs. 1,50,000/- requesting the complainant to present the said cheque by the end of the first week of October, 2002. The accused ina said to have issued another post dated cheque dated 30-11-2002 for Rs. 3,50,000/-. When the complainant presented the cheque for clearance, through his banker, on 7-10-2002, the cheque was returned unpaid, for the reason 'Insufficient Funds'. The complainant got issued a registered notice dated 12-10-2002, to which the accused sent her reply on reply on 26-10-2002. The complaint was filed, nearly a year later, on 16-10-2003. The petition filed to condone the delay in filing the complaint, in Crl. M.P. No. 1141 of 2004, was ordered and, by order dated 7-4-2004, the delay was condoned.

5. Sri. C. Praveen Kumar, learned Counsel for the petitioner-accused, would submit that the amended proviso to Section 142(b) of the Negotiable Instruments Act came into force with effect from 6-5-2003 long after the 'Cause of Action' in these three criminal cases had arisen and that the learned Magistrate had erred in taking the complaint on file on the erroneous premise that the amended provision applied to the cases on hand. Learned Counsel would submit that, since the amendment affects the substantive rights of the petitioner-accused, it can only be prospective in its application and would not apply to cases where the 'Cause of Action' had arisen much prior to the date on which the amended provision came into force on 6-5-2003. Learned Counsel would submit that, even otherwise, the delay in filing the complaint was condoned by the learned Magistrate without putting the petitioner-accused on notice and without giving her an opportunity of being heard and, as such, was in violation of principles of natural justice. Learned Counsel would place reliance on Garikapati Veeraya v. N. Subiah Choudhry : [1957]1SCR488 and Shyam Sunder v. Ram Kumar : AIR2001SC2472 .

6. Sri T. Niranjan Reddy, learned Counsel for the respondent-complainant, on the other hand, would submit that since the amendment, by insertion of the proviso to Section 142, only enables the delay in filing the application to be condoned, the said provision is procedural in nature and since it does not affect any vested rights of the accused, the amendment would also apply to cases even if the 'cause of action' therein had arisen prior to 6-5-2003, the date on which the said amendment came into force.

7. Before examining the rival contentions, it is necessary to take note of Sections 138 and 142 of the Negotiable Instru ments Act which read as under:

138. Dishonour of Cheques 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 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) the cheque has been presented to the bank within a period of six months from the date on which it was 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 thirty 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.

142. Cognizance of offences - Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974):

(a) no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;

(b) such complaint is made within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138:

Provided that the cognisance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint, within such period.

(c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under Section 138.

8. It is also necessary to note that the proviso to Clause (b) of Section 142 was added by the Negotiable Instruments (Amendment) Act, 2002 (Act 55 of 2002) with effect from 6-5-2003.

9. There is considerable force in the submission of Sri C. Praveen Kumar, learned Counsel for the petitioner that the learned Magistrate could not have condoned the delay without putting the petitioner-accused on notice and without giving her an opportunity of being heard.

10. In State of Maharashtra v. Sharadchandra Vinayak Dongre : AIR1995SC231 , the Supreme Court observed (para 9):.Since the Chief Judicial Magistrate condoned the delay for launching the prosecution, without notice to the respondents and without affording any opportunity to the respondents to have their say, the case de serves to be remitted to the Chief Judicial Magistrate for deciding the application filed by the prosecution seeking condonation of delay, if any, afresh in accordance with law after hearing both the parties. It is after the decision of the application for condonation of delay that the Chief Judicial Magistrate shall proceed further in the matter....

11. The order of the learned Magistrate, in condoning the delay, must be set aside on this ground and the matter remanded to enable an opportunity of being heard to be given to the petitioner-accused herein before orders are passed on the petition to condone the delay.

12. This aspect, of giving an opportunity of being heard to the accused before the petition to condone the delay in filing the complaint is decided, would, however, be academic if the other submission of the learned counsel, that the proviso to Section 142 has prospective application, is to be accepted.

13. As noted above, the proviso to Clause (b) of Section 142 has been added, by the Negotiable Instruments (Amendment) Act, 2002, with effect from 6-5-2003. Prior thereto, no Court could take cognizance of an offence punishable under Section 138, except upon a complaint made within one month from the date on which the cause of action arose under Clause (c) of the proviso to Section 138. Under the said proviso, nothing contained in Section 138 would apply unless (a) the cheque has been presented to the bank within a period of six months from the date on which it was drawn or within the period of its validity, Whichever is earlier; (b) the payee makes a demand for payment of money by giving a notice, 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; and (c) the drawer of such cheque fails to make payment of the said amount of money to the payee, within fifteen days of receipt of the notice.

14. In Prem Chand Vijay Kumar v. Yashpal Singh : (2005)4SCC417 , the Supreme Court held:

Clause (a) of the proviso to Section 138 does not put any embargo upon the payee to successively present a dishonoured cheque during the period of its validity. This apart, in the course of business transactions it is not uncommon for a cheque being returned due to insufficient funds or similar such reasons and being presented again by the payee after some time, on his own volition or at the request of the drawer, in expectation that it would be encashed. The primary interest of the payee is to get his money and not prosecution of the drawer, recourse to which, normally, is taken out of compulsion and not choice. On each presentation of the cheque and Its dishonour, a fresh right - and not a cause of action - Accrues in his favour. He may, therefore, without taking pre emptory action in exercise of his such right under Clause (b) of Section 138, go on presenting the cheque so as to enable him to exercise such right at any point of time during the validity of the cheque.

But once he gives a notice under Clause (b) of Section 138, he forfeits such right as in case of failure of the drawer to pay the money within the stipulated time,, he would be liable for offence and the cause of action for filing le complaint will arise.

In a generic and wide sense (as in Section 20 of the Civil Procedure Code, 1908 (in short 'CPC') 'cause of action' means every fact which it is necessary to establish to support a right or obtain a judgment. Viewed in that context, the following facts are required to be proved to successfully prosecute the drawer for an offence under Section 138 of the Act:

a) that the cheque was drawn for payment of an amount of money for discharge of a debt/liability and the cheque was dishonoured:

(b) that the cheque was presented within the prescribed period:

(c) that the payee made a demand for payment of the money by giving a notice in writing to the drawer within the stipulated period: and

(d) that the drawer failed to make the payment within 15 days of the receipt of the notice.

Proceeding on the basis of the generic meaning of the term 'cause of action', certainly each of the above facts would constitute a part of the cause of action but Clause (b) of Section 142 gives it a restrictive meaning, in that, it refers to only one fact which win give Use to the cause of action and that is the failure to make the payment within 15 days from the date of the receipt of the notice. A combined reading of Sections 138 and 142 makes it clear that cause of action is to be reckoned accordingly. The combined reading of the above two sections of the Act leaves no room for doubt that cause of action within the meaning of Section 142 arises - and can arise - only once.

The period of one month for filing the complaint will be reckoned from the day immediately following the day on which the period of fifteen days from the date of the receipt of the notice by the drawer expires.

As noted in Sadanandan Bhadran case 1999 Cri W 4096 once a notice under Clause (b) of Section 138 of the Act is 'received' by the drawer of the cheque, the payee or holder of the cheque forfeits his right to again present the cheque as cause of action has accrued when there was failure to pay the amount within the prescribed period and the period of limitation starts to run which cannot be stopped on any account.

One of the indispensable factors to form the cause of action envisaged in Section 138 of the Act is contained in Clause (b) of the proviso to that section. It involves the making of a demand 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'. If no such notice is given within the said period of 15 days, no cause of action could have been created at all.

Thus, it is well settled that If dishonour of a cheque has once snowballed into a cause of action it is not permissible for a payee to create another cause of action with the same Cheque.

In SIL Import, USA v. Exim Aides Silk Exporters 1999 Cri LJ 2276, it was held that the language used in Section 142 admits of no doubt that the Magistrate is for bidden from taking cognizance of the offence if the complaint was not filed within one month of the date on which the cause of action arose. Completion of the offence is the immediate forerunner of rising of the cause of action. In other words, cause of action would arise soon after completion of the of fence and period of limitation for filing of the application starts running simulta neously....

(Emphasis supplied)

15. On a combined reading of Sections 138 and 142 of the Negotiable Instruments Act, it is clear that the 'cause of action' can arise only once i.e., when the payee makes a demand for payment of money by giving a notice in writing to the drawer within the stipulated period. Once the dishonour of the cheque has snowballed into a 'cause of action' it is not permissible for the payee to create another cause of action with the same cheque and the learned Magistrate is forbidden from taking cognizance of the offence if the complaint is not filed within one month [from the date on which the 'cause of action' arose. The offence is complete immediately prior to the cause of action having arisen and, as the 'cause of action' arises soon after completion of the offence, the period of limitation for filing the complaint starts to run simultaneously.

16. In the present criminal cases, registered notices were sent by the respondent-complainant to the petitioner-accused in October, 2002 to which the petitioner sent a reply in the same month. The period of limitation of one month thereafter, for filing the complaint, expired latest by the end of November 2002 and the learned Magistrate could not have taken cognizance, of the offence under Section 138 of the Negotiable Instruments Act, based on a complaint filed thereafter. Since the complaint was filed only in October, 2003 nearly one year after the 'cause of action' had arisen, and more than eleven months after expiry of the period of limitation stipulated in Clause (b) of Section 142, no cognizance could have been taken by the learned Magistrate of the offence punishable under Section 138 of the Negotiable Instruments Act.

17. In this context, it is also necessary to note that Section 473, Cr.P.C., which provides for extension of the period of limitation, does not operate in resper of the period of limitation prescribed under any other enactment including Section 142 of the Negotiable Instruments Act. In P.P. Unnikrishnan v. Puttiyottil Alikutty : 2000CriLJ4041 , the Supreme Court observed (paras 5-6, 9, 10 and 11):.Section 64 of the KP Act deals with initiation of legal proceedings against police officers or Magistrates. The first two subsections are intended to afford protection against any penalty or action for damages on account of any act done by such officers in good faith in pursuance of any duty imposed or any authority conferred. Sub-section (3) which is relied on by the appellants as the sheet anchor for their safety, is extracted below:

64. (3) No Court shall take cognizance of any suit or complaint, in respect of any offence or wrong alleged to be committed or done by a Magistrate, police officer or other person on account of any act done in pursuance of any duty imposed or authority conferred on him by this Act or any other law for the time being in force or of any rule, order or direction lawfully made or given thereunder unless the suit or complaint is filed within six months of the date on which the offence or wrong is alleged to have been committed or done....

Section 473 of the code is the last of the provisions subsumed in Chapter XXXVI of the Code. The title of that chapter is 'Limitation for taking cognizance of certain offences.' The chapter contains a fasciculus of only seven sections starting with Section 467. It is necessary to extract that commencing provision which is as under:

467. Definitions.- For the purposes of this Chapter, unless the context otherwise requires, 'period of limitation' means the period specified in Section 468 for taking cognizance of an offence.

It is clear from a reading of the said opening provision that the entire chapter concerns only with the period of limitation prescribed in the succeeding provisions. Of course the usual play at the joints is provided therein by using the words 'unless the context otherwise requires'. But on reading Section 473 it would become crystal clear that it is intended to be applied only with reference to the period fixed in Section 468 of the Code. Now we extract below Section 473 of the Code:

473. Extension of period of limitation in certain cases. - Notwithstanding anything contained in the foregoing provisions of this Chapter, any Court may take cognizance of an offence after the expiry of the period of limitation, if it is satisfied on the facts and in the circumstances of the case that the delay has been properly explained or that it is necessary so to do in the interests of justice.

The extension of period contemplated in the said section is only by way of an excep tion to the period fixed as per the provisions of Chapter XXXVI of the Code. Section 473 of the Code therefore cannot operate in re spect of any period of limitation prescribed under any other enactment. Hence we are unable to uphold the view adopted by the learned single Judge of the High Court that Section 473 of the Code can appropriately be invoked by the complainant for circum venting the bar contained in Section 64(3) of the KP Act....

18. The question which, however, remains to be examined is whether insertion of the proviso to Clause (b) of Section 142 of the Negotiable Instruments Act, by Act 55 of 2002 with effect from 6-5-2003, would enable the Learned Magistrate to entertain these complaints and take cognizance of the offence under Section 138 of the Negotiable Instruments Act. The proviso to Clause (b) of Section 142. does not specifically provide for its retrospective operation or to allow proceedings which had already attained fi nality to be re-opened.

19. In Garikapati Veeraya (AIR 1957 SC 540), the Supreme Court observed (para 23):.From the decisions cited above the following principles clearly emerge:

(i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.

(ii) The right of appeal is not a mere matter of procedure but is a substantive right.

(iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit.

(iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis commences and although It may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not, by the law that prevails at the date of its decision or at the date of the filing of the appeal.

(v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise....

(Emphasis supplied)

20. In Shyam Sunder AIR 2001 SC 2472, the Supreme Court held (para 29):

From the aforesaid decisions the legal position that emerges is that when a repeal of an enactment is followed by a fresh legislation, such legislation does not affect the substantive rights of the parties on the date of the suit or adjudication of the suit unless such a legislation is retrospective and a Court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered because the rights of the parties in an appeal are determined under the law in force on the date of the suit. However, the position in law would be different in the matters which relate to procedural law but so far as substantive rights of parties are concerned, they remain unaffected by the amendment in the enactment. We are, therefore, of the view that where a repeal of provisions of an enactment is followed bv fresh legislation by an amending Act, such legislation is prospective in operation and does not affect substantive or vested rights of the parties unless made retrospective either expressly or by necessary intendment. We are further of the view that there is a presumption against the retrospective operation of a statute and further a statute is not to be construed to have a greater retrospective operation than its language renders necessary, but an amending Act which affects the procedure is presumed to be retrospective, unless the amending Act provides otherwise. We have carefully looked into the new substituted Section 15 brought in the par ent Act by the Amendment Act, 1995 but do not find it either expressly or by necessary implication retrospective in operation which may affect the rights of the parties on the date of adjudication of the suit and the same is required to be taken into consideration by the appellate Court. In Shanti Devi v. Hukum Chand : AIR1996SC3525 , this Court had occasion to interpret the substi tuted Section 15 with which we are con cerned and held that on a plain reading of Section 15, it is clear that it has been intro duced prospectively and there is no ques tion of such Section affecting in any man ner the judgment and decree passed in the suit for pre-emption affirmed by the High Court in the second appeal. We are respect fully in agreement with the view expressed in the said decision and hold that the sub stituted Section 15 in the absence of any thing in it to show that it is retrospective, does not affect the right of the parties which accrued to them on the date of the suit or on the date of passing of the decree by the Court of first instance. We are also of the view that the present appeals are unaffected by change in law insofar it related to deter mination of the substantive rights of the par ties and the same are required to be decided in the light of the law of pre-emption as it existed on the date of passing of the de cree....

(Emphasis supplied)

21. An amendment is to be construed as prospective in its application, and as not to affect substantive or vested rights of parties, unless made retrospective either expressly or by necessary intendment.

22. In K.M. Sharma v. ITO : [2002]254ITR772(SC) , the Supreme Court observed (para 13):.Law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to a litigant for an indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings, which had already been concluded and attained finality. The amendment to Sub-section (1) of Section 150 is not expressed to be retrospective and, therefore, has to be held as only prospective. The amendment made to Sub-section (1) of Section 150 which intends to lift the embargo of period of limitation un der Section 149 to enable the authorities to reopen assessments not only on the basis of orders passed in the proceedings under the IT Act but also on order of a Court in any proceedings under any law has to be applied prospectively on or after 1-4-1989 when the said amendment was introduced to Sub-section (1). The provision in Sub-section (1) therefore can have only prospective operation to assessments, which have not become final due to expiry of period of limitation prescribed for assessment under Section 149 of the Act....

23. The law of limitation is intended to give finality to legal proceedings and to avoid a litigant being exposed to the risk of litigation for an indefinite period on future un foreseen events. Proceedings, which have attained finality under the existing law due to the bar of limitation, cannot be revived unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings which had already been concluded and attained finality.

24. Since insertion of the proviso to Clause (b) of Section 142, by the Negotiable Instruments (Amendment) Act, 2002 (Act 55 of 2002), came into force from 6-5-2003, and as the said amendment has not given retrospective application, either expressly or by necessary implication, it cannot be applied to cases where the 'cause of action', under Clause (c) of the proviso to Section 138, had arisen and the period of limitation, for filing the complaint thereafter under the pre-amended Section 142(b)142 of the Negotiable Instruments Act, had expired prior to 6-5-2003, when the amendment came into force.

25. In the present cases the 'cause of action', under Clause (c) of the proviso to Section 138, arose in October 2002 and the period of limitation under the pre-amended Section 142, for filing the complaint, expired by the end of November 2002. In placing reliance on the proviso to Clause (b) of Section 142, and in taking cognizance of the offence under Section 138 on the basis of complaints filed in October 2003, well beyond the period of limitation the Learned Magistrate had exceeded his jurisdiction, as the proviso to Section 142 does not have retrospective operation.

26. Criminal petition Nos. 4350, 4351 and 4352 of 2004 are allowed and the pro-ceedings in C.C. Nos. 172 of 2004, C.C. No. 277 of 2004 and C.C. No. 287 of 2004, on the file of the VII Metropolitan Magistrate, Visakhapatnam, are quashed.


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