S. Shamsuddin, J.
1. This criminal revision petition is directed against an order passed by the court below holding that prosecution against the first respondent was not maintainable in view of Article 20(1) of the Constitution of India.
Short facts which are necessary for determination of the question raised in the criminal revision petition are as follows : The first respondent approached the petitioner herein for a loan of Rs. 17,000 and represented that the amount would be returned within a month. The petitioner paid the amount. Towards the discharge of debt, the first respondent drew a cheque in favour of the petitioner on the State Bank of India, Statue Branch, Thiruvananthapuram, on December 2, 1988. On April 8, 1989, the petitioner presented the cheque for encashment. The State Bank of India dishonoured the cheque with the endorsement 'refer to drawer' on the same day. Thereupon, the petitioner demanded payment of the amount through a registered notice dated April 13, 1989. The first respondent received the same on April 17/1989. As there was no response to the notice, nor any payment, the petitioner filed a complaint before the lower court on May 19, 1989, alleging that the first respondent committed an offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the Act') as amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988.
3. The first respondent raised a preliminary objection before the lower court that the complaint is not maintainable in view of the bar contained in Article 20(1) of the Constitution.
4. Section 138 of the Act came into force only on April 1, 1989 (see the Gazette of India, dated March 29, 1989, Part II, s. 3(ii)). The court below held that inasmuch as the cheque was drawn on December 2, 1988, before the commencement of the Act, the complaint is not maintainable in view of Article 20(1) of the Constitution of India.
5. One of us (Thomas J.) had occasion to consider the question whether prosecution was maintainable in a similar situation in Paramjith Singh v. N.C. Job [1989] 2 KLT 740 ; [1990] 67 Comp Cas 570. It was held in that case that though the cheque was drawn before the coming into force of the Act, prosecution was maintainable as the failure to pay the amount on demand after dishonour of cheque was subsequent to the commencement of the Act.
6. Then this revision petition came up for consideration before a learned single judge. He entertained a doubt about the correctness of the decision and thought that Paramjith Singh's case [1989] 2 KLT 740 ; [1990] 67 Comp Cas 570 requires reconsideration by a Division Bench. It is thus that the matter has come up before us.
7. The Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (Act No. 66 of 1988), brought about certain amendments to the Negotiable Instruments Act, 1881, as well as to some other enactments. Section 4 of the Amendment Act inserted Chapter XVII in the Negotiable Instruments Act. Section 138 is a new provision introduced in Chapter XVII. In order to appreciate the contentions raised, it is profitable to refer to Section 138 which reads as follows :
'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 the amount of money standing to the credit of that account is insufficient to honour the cheque or 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 from the receipt of the said notice.
Explanation.--For the purpose of this section, 'debt or other liability' means a legally enforceable debt or other liability.'
8. In order to attract the penalty provided under Section 138 of the Act, the following ingredients have to be established.
1. The cheque should have been issued for the discharge, in whole or part, of any debt or other liability.
2. The cheque should have been presented within the period of six months or within the period of its validity, whichever is earlier.
3. The payee or the holder in due course should have issued a notice in writing to the drawer within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.
4. After the receipt of the said notice by the payee or the holder in due course, the drawer should have failed to pay the cheque amount within fifteen days of the receipt of the said notice.
9. Section 142 of the Act provides that 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, within one month of the date on which the cause of action arises under Clause (c) of proviso to Section 138 of the Act, before the Metropolitan Magistrate or a Judicial Magistrate of the first class. It is argued by learned counsel for the revision petitioner that the complaint is maintainable in view of Section 142 of the Act which states that the cause of action arises only when the drawer of the cheque fails to pay the amount to the payee or holder in due course of the cheque, as the case may be, within fifteen days of receipt of notice of demand provided in Clause (b) to the proviso to Section 138;
Article 20(1) of the Constitution reads :
'No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.'
10. The crucial question to be considered in this case is, what is the date of commission of the offence under Section 138 Is it on the date on which the cheque was issued or on the date on which it was dishonoured by the bank or on the failure of the drawer to pay the amount to the payee or holder in due course within fifteen days of receipt of notice In our view, Clause (b) of Section 142 of the Act itself gives a clear answer to this question by prescribing that no court shall take cognizance of the offence unless a 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. Clause (c) of Section 138 speaks of failure to make payment to the payee or the holder of the cheque, as the case may be, within fifteeen days of the notice contemplated in Clause (b) of Section 138, that is a notice by the payee or holder of cheque demanding payment of the amount within fifteen days of receipt of information regarding return of cheque as unpaid.
11. The act of issuing a cheque cannot be considered as the starting point of the commission of the offence. As pointed out in Paramjith Singh's case [1990] 67 Comp Cas 570 (Ker), when the main body of the section is read along with the proviso, it is clear that the offence is committed only if the drawer of the cheque fails to make the payment within fifteen days of receipt of notice. Dishonour of cheque by itself does not give rise to a cause of action, because payment can be made on receipt of notice of demand contemplated in Clause (b) of Section 138 and in that event, there is no offence, nor any attempt to commit the offence, nor even a preparation to commit the offence. Failure to pay the amount within fifteen days of receipt of notice alone is the cause of action and nothing else.
12. Offence has been defined in Section 3(38) of the General Clauses Act as meaning any act or omission made punishable by any law for the time being in force. The definition contained in Section 2(n) of the Code of Criminal Procedure is also to the same effect. In the instant case, it is omission to pay the amount on demand by issue of notice after the cheque is returned that is made an offence. Since that event was after the coming into force of Section 138, the bar contemplated in Article 20(1) of the Constitution is not applicable to this case.
13. The Madras High Court had occasion to consider an identical question in Kody Elcot Ltd. v. Down Town Hospital [1990] MLJ (Crl.) 178 ; [1991] 71 Comp Cas 125 (Mad). On a consideration of the provisions contained in Sections 138 and 142, a learned single judge of the Madras High Court held that even if the cheque was issued prior to the commencement of the Act, the offence stands committed only if payment was not made on demand made after return of the cheque. Ratio of the said decision is in tune with the view adopted by us.
14. What is envisaged as an offence under Section 138 is omission to pay the amount on demand after return of the cheque and if the law was in force at that relevant time, no question of bar contemplated in Article 20(1) of the Constitution of India would arise.
15. The foregoing discussion would show that the order of the lower court holding that the complaint would violate Article 20 of the Constitution is unsustainable and it is, accordingly, quashed. The court below is directed to proceed with the complaint in accordance with law.