Judgment:
S.D. Pandit, J.
Rule.
1. Satishkumar Jayantilal Shah, the original accused in Criminal Case No. 2361 of 1992, on the file of the learned Metropolitan Magistrate, Court No. 9, Ahmedabad, has filed the present petition under section 482 of the Code of Criminal Procedure, 1973.
2. The petitioner has been prosecuted by respondent No. 2 for the alleged offence punishable under section 138 of the Negotiable Instruments Act, by alleging that the present petitioner had taken goods worth Rs. 1,43,248.40 from respondent No. 2-company, Unipole Plastics Pvt. Ltd., in the period running between January 10, 1992, and February 8, 1992, and that towards the said dues four cheques bearing Nos. 384226, 384246, 384243 and 384249, dated February 15, 1992, March 15, 1992, March 16, 1992, and March 25, 1992, for the respective amounts of Rs. 46,926.20, Rs. 1,234.90, Rs. 46,920.20 and Rs. 48,168.10 were given and that the said cheques were presented to respondent No. 2's bankers and they were dishonoured by endorsement 'refer to drawer' and the petitioner failed to pay the amount of those cheques though he was served with registered notice informing him about dishonouring of his cheques.
3. The petitioner is seeking the quashing of the said criminal proceeding on three grounds :
(i) That the cheques were presented a second time after they were dishonoured on the first occasion and the prosecution is lodged after the second dishonour by taking recourse to provisions of section 138 of the Negotiable Instruments Act and the complainant had failed to take action against the petitioner when the cheques were dishonoured on the first occasion, and he is not entitled to lodge the prosecution on the dishonour of the cheques on second presentation.
(ii) That in all there are four cheques, therefore, in view of the provisions of section 219 of the Code of Criminal Procedure, the court can take cognizance and frame a charge only as regards three cheques and consequently prosecution for all the four cheques is not legal.
(iii) That the complaint in question is not lodged by the complainant as per the provisions of section 142 of the Negotiable Instruments Act.
4. The contentions raised by the petitioner are contested by the respondent and in addition it is contended on behalf of respondent No. 2 that this court should reject this petition on account of delay and laches and on account of the petitioner not coming before the court with clean hands.
5. Before dealing with the three questions raised by the advocate for the petitioner, I would deal with the contentions raised on behalf of respondent No. 2-original complainant. It is true that Criminal Case No. 2361 of 1992, was filed by respondent No. 2 in the year 1992. The present petition is filed in the year 1996, and, therefore, it is contended by Mr. Sanjanwala, the learned advocate for respondent No. 2, that the petitioner has delayed in coming before this court, and consequently, his petition should be rejected. As against this, it is contended by the learned advocate for the petitioner that though the complaint is filed in the year 1992, the petitioner is in fact served in the year 1995, and he has further submitted that even he was not served with a clear copy of the complaint, i.e., a readable copy of the complaint and he had repeatedly asked for it and he got it in 1996 only. The learned advocate for respondent No. 2 disputed the said claim. In my opinion, it is not at all necessary to go into this controversy as to when the present petitioner was served. It is settled law that if the contentions raised before the court exercising powers under article 227 of the Constitution of India, or under section 482 of the Code of Criminal Procedure are based on pure questions of law and if the same are going to the root of the matter and if the original criminal proceeding amounts to a clear abuse of process of law, then the court would not refrain from considering the contentions raised before the court for quashing the said proceeding. The learned advocate for the petitioner has cited before me in support of his contention the decision of High Court of Himachal Pradesh in Gopal Chauhan v. Smt. Satya [1979] Crl. LJ 446. Even in that case though it is observed in one para, that the petition of the petitioner deserves to be dismissed on the ground of laches, the petition was not dismissed on that ground but the contentions raised by the petitioner were considered by the Chief Justice of the said High Court and he has given his decision on the contention raised before him. Therefore, I am unable to accept the contention raised by Mr. Sanjanwala that the present petition is liable to be dismissed only because it is filed in the court about four years after the filing of the complaint in the trial court.
6. He has further submitted before me that the present petitioner had given an application in the trial court that he would pay the dues due from the petitioner and he has also sought time for making payment of the same and in spite of this he is coming in this court, and, therefore, he is not an honest person. But it must be remembered that the question is not about whether the petitioner is liable to pay the amount to respondent No. 2 or not. The question is as to whether the criminal proceeding is justified or not. If the provisions of section 138 of the Negotiable Instruments Act are seen, then it would be quite clear that in order to take a cognizance under section 138 of the Negotiable Instruments Act, there must be issuance of a cheque towards the outstanding debt. Therefore, the liability of the drawer of the cheques has no bearing in considering the questions which are raised before me.
7. From the papers which are produced in this criminal miscellaneous application, it is quite clear that the cheque bearing No. 384226 for the amount of Rs. 49,926.20 dated February 15, 1992, was presented to the banker of respondent No. 2 on February 17, 1992, as well on April 21, 1992. Therefore, it is quite obvious that the said cheque was presented by respondent No. 2 to its banker on two occasions. After it was dishonoured on the first occasion, it was again presented in April, 1992. Therefore, it is contended before me by the learned advocate for the petitioner that when the cheque was once dishonoured, the payee of the cheque ought to have taken recourse to the provisions of section 138 of the Negotiable Instruments Act, and he cannot wait for taking recourse to section 138 of the Negotiable Instruments Act by making a second presentation of the cheque. In support of his submission, he has cited before me the case of a Division Bench of the Kerala High Court in N. C. Kumaresan v. Ameerappa [1992] 74 Comp Cas 848; [1992] 2 Crimes 23. In the said case, His Lordship Thomas J., who is at present elevated as judge of the apex court, has held that more than one cause of action on the same cheque is not contemplated or envisaged under Chapter XVII of the Negotiable Instruments Act, 1881, and the prosecution in that case on account of the dishonouring of the cheque on the second presentation of the cheque has been quashed.
8. As against this, Mr. Sanjanwala, the learned advocate for respondent No. 2 has contended before me that section 138 or any other provision of Chapter XVII of the Negotiable Instruments Act, 1881, does not lay down that the cheque is to be presented only once and that there could not be the prosecution of the person on the presentation of the cheque on the second Occasion. In support of that contention of his he has also cited before me the cases of K. P. v. Textiles v. Malook Chand Naresh Chand [1992] 3 Crimes 594 [1994] 79 Comp Cas 125 (P&H;), Richard Samson Sherrat v. State of Andhra Pradesh [1992] Crl. LJ 2566; [1993] 78 Comp Cas 28 (AP), S. Ravi Kumar v. Rajesh Kumar Jain [1995] 83 Comp Cas 750 [1995] 2 Crimes 195 (Mad), Manivannan v. Ever King Garments [1994] 3 Crimes 262; [1995] 83 Comp Cas 473 (Mad) and Satishkumar v. G. Krishna Gopal [1994] Crl. LJ 887 (Bom).
9. Before considering the cases cited by both the sides it is necessary to consider the provisions of section 138 of the Negotiable Instruments Act. If the provisions of section 138 of the Negotiable Instruments Act are carefully read, then it would be quite clear that the said section is creating a criminal offence on account of the dishonouring of a cheque issued by a debtor to his creditor. The dispute or controversy between the parties is initially and substantially a civil dispute and by the creation of the said provisions of section 138 of the Negotiable Instruments Act, criminal liability is created. Therefore, when a civil right has been converted into a criminal liability the provisions of the said section would have to be construed very liberally. In the case of N. C. Kumaresan v. Ameerappa [1992] 74 Comp Cas 848, 852; [1992) 1 Crimes 23 (Ker), His Lordship Thomas J. has considered this aspect and has made the following observations in para. No. 7 of the said judgment.
'It is contended that since the view adopted by the learned single judge in Mahadevan Sunil Kumar's case [1992] 74 Comp Cas 805 (Ker) is also possible, the complainant cannot be denied the right to proceed against the petitioner for the offence under section 138 of the Act. Even if such a view is possible, it is one of the settled principles of interpretation of statutes that, when two interpretations are possible of a penal provision, only that which is less onerous to the accused should be preferred (vide Maxwell on the Interpretation of Statutes, 12th edition, at page 239) :
'The principle applied in construing a penal Act is that if, in construing the relevant provisions, there appears any reasonable doubt or ambiguity, it will be resolved in favour of the person who would be liable to the penalty'.
The learned author quoted Lord Esher M.R. from the decision in Tuck and Sons v. Priester [1887) 19 QBD 629, 633 thus :
'If there are two reasonable constructions, we must give the more lenient one. That is the settled rule for the construction of a penal section.' The Supreme Court has adopted the, same principle for interpretation of penal statutes (vide M. v. Joshi v. M. U. Shimpi, : [1961]3SCR986 ). Departure from this principle is permitted if the object and scheme of the statute would be defeated otherwise (vide Chief Inspector of Mines v. Lala Karam Chand Thapar, : (1961)IILLJ146SC and Maharaja Book Depot v. State of Gujarat : 1978CriLJ1859 .'
10. Thus, the above observations of the Division Bench of the Kerala High Court supports my view that when the civil liability is converted into a criminal liability, the construction of provisions of section would have to be made very liberal and in favour of the person who has to face the prosecution. If the provisions of Chapter XVII of the Negotiable Instruments Act are considered, then it would be quite clear that by the provisions of section 138 a creditor has been given a right to have recourse to the criminal prosecution in case the cheque by his debtor is dishonoured on presentation to the bank. So when that right is conferred on the creditor, the creditor must promptly act for exercising the same. In the case of Satishkumar v. Krishna Gopal [1994] Crl. LJ 887, His Lordship P. S. Patankar J. of the Bombay High Court, similarly a single judge of the Andhra Pradesh High Court in the case of Richard Samson Sherrat v. State of Andhra Pradesh [1992] 2 Crimes 150; [1993] 78 Comp Cas 28 (AP) and a single judge of the Madras High Court in the case of Manivannan v. Ever King Garments [1994] 3 Crimes 262; [1995] 83 Comp Cas 473 (Mad) have observed in their judgments that it is a common practice amongst the mercantile community to present the cheque on a number of occasions. There could not be any dispute with the said observations of the said Lordships but the question is when a criminal liability is fastened on a person, whether the practice in the mercantile field could be made use of to fix the liability on the person. If the provisions of the Negotiable Instruments Act are taken into consideration then it would be quite clear that after a cheque is dishonoured, no one can be a holder of the same in due course for the said cheque and the cheque loses its negotiability. In Ram Sarup v. Hardeo Prasad : AIR1928All68 , it has been held that after a cheque is dishonoured no one can be a holder in due course. So under the civil liability when the cheque has been dishonoured, the payee of the cheque cannot negotiate it and there could not be a holder in due course of such dishonoured cheque, it is very difficult to accept the contentions raised on behalf of respondent No. 2 that he is entitled to present the said cheque again and to prosecute the drawer of the cheque. No doubt in the cases of Satishkumar v. Krishna Gopal [1994] Crl. 887 Richard Samson Sherrat v. State of A.P. [1992] 2 Crimes 150; [1993] 78 Comp Cas 28 (AP); Ravindranathan v. Hussain [1992] 2 Crimes 809; S. Ravi Kumar v. Rajesh Kumar Jain [1995] 83 Comp Cas 750; [1995] 2 Crimes 195 (Mad) and Shekhar Gupta v. Subhas Chandra Mondal [1992] 73 Comp Cas 590, the High Courts of Bombay, Andhra Pradesh, Kerala, Madras and Calcutta have accepted the prosecution under section 138 of the Negotiable Instruments Act, on account of the dishonouring of the cheque on the second occasion. But in all these cases, the facts clearly show that after the first dishonour of the cheque, the creditor had approached the debtor either by giving the notice or by personal contact, and the debtor had made in some cases part payments and in all cases the debtor had requested the creditor that he should present the cheque again and he would make arrangements to create sufficient funds to honour the cheque. Therefore, in those cases, by making such representation, the debtor instead of issuing a second cheque for his outstanding dues had made alive the first cheque. Therefore, in view of those peculiar facts of those cases, namely, that the debtor promised to see that the cheque is honoured on the second time and thereby induced and prevented the complainant not to take recourse under section 138 of the Negotiable Instruments Act, he has no jurisdiction to say that the prosecution under section 138 of the Negotiable Instruments Act, on account of the dishonouring of the cheque on the second occasion is not tenable in law. Therefore, in view of those peculiar facts, the decisions given in those cases will have to be considered and accepted.
11. Thus, in my opinion, when a cheque is given by a debtor to his creditor, the dishonouring of the cheque by the banker of the creditor gives the cause of action to lodge the criminal case. The proviso to section 138 of the Negotiable Instruments Act is merely laying down procedure for prosecution. The proviso to section 138 is not creating any cause of action. It lays down the procedure for lodging the prosecution just as under the Criminal Procedure Code. The provisions of section 195 of the Criminal Procedure Code is a condition for lodging certain prosecutions and the court taking cognizance of certain prosecution. The taking of cognizance by the court or condition for lodging prosecution on account of certain provision could not be said to be the cause of action for the criminal offence. No doubt, in certain cases, those conditions for the prosecution might save the period of limitation and might also save the second prosecution of the person if the earlier prosecution has been rejected on account of non-fulfilment of those conditions. But in no case, can it be said that the proviso to section 138 is creating the cause of action for prosecution in question or it is the cause of action for lodging of complaint. In my opinion, it is only a condition for lodging the complaint.
12. Therefore, in the above circumstances in the instant case, when the complainant has not alleged in his complaint that after the dishonouring of the first cheque bearing No. 384226, dated February 15, 1992, of Rs. 46,926.20 he had approached the debtor, the present petitioner and that the petitioner had requested him to present it a second time, his lodging of a complaint after presenting the cheque on the second occasion for the said cheque could not be accepted. It is submitted before me by the learned advocate for the petitioner that other cheques were also presented a second time and they were dishonoured on the second occasion. But from the material on record, I am unable to accept the said submission of him. But if that be the case, the petitioner can urge the said contention before the learned magistrate.
13. The next contention raised on behalf of the petitioner is that there are four cheques and consequently the court was not competent to frame a charge against the petitioner for four cheques in view of section 219 of the Code of Criminal Procedure. It is contended that in view of section 219, the court could have taken cognizance for only three cheques and the charge could be only as regards three cheques. Now in view of my finding, this contention regarding the provision of section 219 has remained academic as I have found that the cognizance of the first cheque dated February 15, 1992, bearing No. 384226 could not be taken, but even then, it would be proper to decide this question of law, and, therefore, I proceed to decide the same.
14. It must be remembered that as per the allegations made by the complainant in his complaint, the present petitioner had taken goods on credit from the complainant during the period running between January 10, 1992, and January 8, 1993. It is the further claim of the complainant that towards his dues for the goods taken on credit these four cheques were given by him. Now if these averments made in the complaint are taken into consideration along with the provisions of section 220 of the Code of Criminal Procedure, then it would be quite clear that the issuance of these four cheques could be said to be part of the same transaction. If issuance of these four cheques are said to be part and parcel of one and the same transaction, then taking cognizance of the four cheques and framing a charge for those four cheques could not be said to be any illegality as the said action would be covered by the provisions of section 220 of the Code of Criminal Procedure.
15. The next contention raised on behalf of the petitioner is as regards the provisions of section 142 of the Negotiable Instruments Act, 1881. It is contended before me by the learned advocate for the petitioner that in the title of the complaint the name of the complainant is given as under :
Arunbhai Motilal Parikh
Age about - adult, Occupation - Service
Residence - Unipole Plastics Pvt. Ltd.
1st Floor, H.K. House, Ashram Road, Ahmedabad-380 009.
16. Thus, as per the title of the complaint it is lodged by Arunbhai Motilal Parikh and not by Unipole Plastic Pvt. Ltd. Admittedly, the cheques in question were issued to Unipole Plastics Pvt. Ltd., and, therefore, the complaint in question is not lodged by the payee of the cheque and consequently in view of the provisions of section 142 of the Negotiable Instruments Act, the court cannot take cognizance of the complaint in question. In support of that submission of his, he has put reliance on the judgment of this court in the case of Dipendra G. Choksi v. Kailashchandra C. Dhoot : (1995)1GLR424 .
17. It is true that section 142 of the Negotiable Instruments Act clearly lays down that the court can take cognizance only if the complaint is filed in writing by the payee or holder in due course of the cheque. When the provisions of section 142 of the Negotiable Instruments Act are to be considered for the purpose of consideration regarding taking of cognizance of a complaint, in my opinion, mere title of the complaint cannot be taken into consideration. The title of the complaint along with the averments made in the complaint are to be taken into consideration. I have already quoted the title of the complaint in question and it is proper to consider the averments made in the complaint. In para. No. 1 of the complaint, the complaint has stated as under :
'I, the complainant reside in Ahmedabad city. I am manager of Unipole Plastics Pvt. Ltd., situated on 1st Floor of H.K. House, Ashram Road, Ahmedabad. I do all the general and banking work of the company. The company is making production of chemicals named 'Nitro Benzine' and does the business regarding supply of the produce, as per the orders of the different parties'.
18. Then in para 2, it is further averred as under :
'I, the complainant know the accused very well since long because he is having business relation with the company. The company of the complainant has been supplying Nitro Benzine to the accused from time to time. The accused used to give the price of the said goods. During the period from January 10, 1992, to February 8, 1992, the company by different invoices sent Nitro Benzine for the value of Rs. 1,47,246.40 to the accused and the same has been received by the accused. Detailed delivery slips of the goods are with the company. The accused had issued separate cheques towards the outstanding amount of the company'.
19. Then in para. 3 after describing various cheques issued by the present petitioner, it is further averred as under :
'As per the instruction of the accused, the company credited the abovesaid four cheques issued in respect of the legal outstanding amount, in the account of the company standing in Central Bank of India, Lal Darwaja. But the said cheques were returned unrealised as there was no sufficient balance in the account of the accused. In this regard, the bank informed the company, vide its letter dated April 22, 1992. The original cheques bearing Nos. 384226, 384246, 384249 and return memo dated April 21, 1992, of Co-operative Bank of Ahmedabad, Station Road Branch, were sent to the company by the Central Bank of India. On receipt of the aforesaid documents by the company, I, the complainant came to know that aforesaid cheques have been returned because of insufficient money in the account of the accused'.
20. Then in para. 4, it is further stated as under :
'In spite of the above promise, the accused did not pay the amount of aforesaid returned cheques to the company. Therefore, on April 29, 1992, within time limit my company under section 138 of the Negotiable Instruments Act sent notice to the accused through the advocate by registered acknowledgment due and by that notice he was requested to pay the amount of the abovesaid returned cheques'.
21. Now, if the above pleadings or averments in the complaint are taken into consideration then it would be quite clear that the complaint in question is lodged by the company through its manager who has been named as the complainant in the case. No doubt, in the title of the complaint there is no specific name of the company, but merely because of non-mention of the company in the title of the complaint, it could not be said that the complaint is not lodged by the company. In the case of Dipendra G. Choksi v. Kailashchandra C. Dhoot : (1995)1GLR424 , from the averments made in the complaint itself the learned advocate for the company was not in a position to point out to His Lordship B. C. Patel J., as to who was the payee of the cheque. It seems that in that complaint, there was no reference to the company in the body of the complaint as well as in the title of the complaint. That would be quite clear from the following observations in para No. 8 (page 426) :
'If there is nothing to show that the complainant is a payee or a holder in due course, the court could not have taken cognizance, and on this short ground alone, petition required to be allowed. Mr. Nanavati, learned advocate appearing for original complainant read out the complaint but could not point out from the complaint as to who is the payee or holder in due course of the cheque. In the absence of this positive averment in the complaint the court ought not to have taken cognizance of the offence and, therefore, the process issued against the petitioner requires to be quashed on this limited ground only'.
22. Therefore, in view of the peculiar facts of that case His Lordship has quashed the criminal prosecution in that case, but in my opinion, in view of the above-quoted averments made in the complaint, the complaint in this case will have to be treated as lodged by the company. In addition to it, the complainant has produced before the trial court the resolution of the company that he has been authorised to lodge the complaint in question. No doubt the said resolution of the company was produced at the time of recording his evidence, but in view of the averments in the complaint, I am unable to hold that the complaint in question was not lodged by the payee of the cheques.
23. Thus, I hold that the learned Metropolitan Magistrate of Court No. 9, Ahmedabad, cannot take cognizance of the cheque No. 384226, dated February 15, 1992, for the amount of Rs. 46,926.20 and his action in taking cognizance for the offence as regards that cheque alone is quashed and set aside. Thus, the petition is partly allowed and substantially rejected with above observation. However, the petitioner would be at liberty to move the trial court for discharge on other legal grounds. Rule is discharged accordingly.