Judgment:
K.N. Keshavanarayana, J.
1. This appeal under Section 378 of Cr.P.C. by the complainant is directed against the judgment and order dated 06.01.2007 passed by the Presiding Officer, Fast Track Court-V, Mysore, in Crl.A. 211/2005 acquitting the respondent/accused by setting aside the judgment and order of conviction passed by the Additional Civil Judge (Jr.Dn.). JMFC. Nanjangud, in C.C. No. 371/2003 convicting the respondent/accused for offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act').
2. The appellant filed a private complaint under Section 200 Cr.P.C. against the respondent for offence punishable under Section 138 of the Act infer alia alleging that, the respondent/accused borrowed a sum of Rs. 2.50.000/- from her on 14.08.2000 agreeing to repay the same with interest at 12% p.a. However, subsequently, the accused failed to pay the amount in spite of repeated demands by her and ultimately, the accused issued a cheque dated, 30.07.2002 for Rs. 3,00.000/- drawn on Syndicate Bank, Kuvenmpunagar Branch, Mysore, in favour of the complainant towards repayment of the said debt and when the said cheque was presented for encashment, the same was returned un-paid with the Bankers endorsement dated 09.01.2003 'insufficient Funds' and the said endorsement was received by the complainant from her Banker on 13.01.2003. Thereafter, she issued a legal notice as required by law on O8.02.2003 informing the accused about dishounouring of the cheque and also calling upon her to pay the amount covered under the cheque within the statutory period. However, the accused in spite of service of notice failed to pay the amount, as such, she has committed offence punishable under Section 138 of the Act.
3. The learned Magistrate, who took cognizance of the offence alleged, after recording the sworn statement of the complainant, issued summons to the accused. Upon service of summons, the accused appeared before the learned Magistrate and pleaded not guilty for the accusation made against her and claimed to be tried.
4. During the trial, the complainant examined herself as PW.1 and got marked Exs. P1 to P11. During her examination under Section 313 Cr.P.C. the accused denied all the incriminating circumstances appearing against her in the evidence of the complainant. In defence, the husband of the accused was examined as DW.2 and two more witnesses were examined as DW.1 and DW.3 and Exs. D1 to D23 were marked. The defence of the accused was one of denial. It was her defence that, there was some transactions between her and the brother of the complainant and in connection with the said transaction, the cheque in question had been delivered as a blank cheque to the brother of the complainant and the same has been misused by the complainant by filling-up the blanks. It was also her defence that there was no monetary transaction between her and the complainant, and die cheque in question was not issued for discharge of any debt or liability due to the complainant. It. was also her defence that the notice dated 08.02.2003 was barred by time provided by Clause (b) of Proviso to Section 138 of the Act, therefore, there was no cause-of-action for the complainant to file complaint alleging offence under Section 138 of the Act and the Court could not have taken cognizance of the offence on the complaint filed on the basis of such a notice issued beyond the period of time allowed under law.
5. The learned Magistrate after hearing both sides and on assessment of oral and documentary evidence, by the judgment dated 11.08.2005 convicted the accused for offence under Section 138 of the Act and sentenced her to undergo S.I. for 2 years and also to pay compensation of Rs. 4,00,000/- Being aggrieved by the said judgment and order of conviction, the accused filed appeal before the Sessions Court at Mysore in Crl.A. No. 211/2005. The said appeal was subsequently made over to the Presiding Officer, Fast Track Court-V. Mysore.
6. Before the Appellate Court, on behalf of the appellant, it was strenuously contended that the trial Court has not properly appreciated the defence of the accused that the notice issued on 08.02.2003 was barred by time and that, the learned Magistrate could not have taken cognizance on the basis of the complaint based on the notice issued beyond the time prescribed under Clause (b) of proviso to Section 138 of the Act. This argument was canvassed in the light of the provisions of Clause (b) of the proviso to Section 138 of the Act as existed on 13.01.2003 and in the light of the amendment brought to the said proviso by Act 55/2002 which came into effect from 06.02.2003. However, the Appellate Court held that since the amendment of Clause (b) was in the nature of substitution, the said amendment is deemed to have been brought into force from inception therefore, it was held that the notice issued was in lime. However, the Appellate Court on merits found that the learned Magistrate is not justified in convicting the accused for the offence under Section 138 of the Act. The Appellant Court was of the view that the defence of the accused that the cheque in question had been delivered to the brother of the complainant in respect of some other transaction, appears to be more probable and acceptable. In that view of the matter, the Appellant Court by its judgment dated 06.01.2007 allowed the appeal by setting aside the judgment and order of the learned Magistrate convicting the accused and consequently acquitted the respondent/accused of offence under Section 138 of the Act. Being aggrieved by the said judgment and order passed by the Appellate Court the complainant has presented this appeal.
7. Upon service of notice of this appeal, the respondent/accused has appeared through her learned Counsel. I have heard both sides and perused the records.
8. The learned Counsel for the respondent vehemently contended that the notice issued on 08.02.2003 on the basis of the amendment brought to Clause (b) of proviso to Section 138 by Act 55/2002, is not within the period of time allowed under law which existed on the purported date of the dishonour of the cheque and the date of knowledge of the complainant about such dishonour. Therefore, according to the learned Counsel, the complaint should have been dismissed without going into the merits of the case. He further contended that civil suit filed by the appellant/complainant for recovery of the amount covered under this cheque in O.S. No. 371/2003 came to be dismissed and the appeal filed before this Court against the dismissal of suit has also been dismissed, therefore, there is no ground to interfere with the judgment, of the Sessions Judge acquitting the accused.
9. On the other hand, learned Counsel for the appellant vehemently contended that the interpretation made by the learned Sessions Judge with regard to the amendment brought to Clause (b) of proviso to Section 138 of the Act, is sound and is in accordance with law and therefore, the notice issued on 08.02.2003 was in accordance with law. However, he further submitted that the findings of the learned Sessions Judge on merits is perverse, illegal and contrary to the evidence on record and therefore, the judgment under appeal is liable to be set aside and the judgment of conviction recorded by the trial Court deserves to be up-held.
10. In the light of the above, the points that arise for my consideration are:
i) Whether the statutory notice as per Ex.P5 is within the period allowed under law?
ii) Whether the learned Magistrate was justified in taking cognizance of offence on the complaint based on the notice - Ex.P5?
iii) Whether the lower Appellate Court is justified in acquitting the respondent/accused?
11. The undisputed facts are that, the cheque said to have been issued by the respondent/accused dated 30.07.2002 was presented for encashment in the first week of January 2003 through Vijaya Bank, Nanjangud Branch. The same came to be dishonoured on 09.01.2003 as is evident from the endorsement-Ex.P2 issued by Syndicate Bank. Kuvempunagar. Mysore. Dishonouring of the said cheque was intimated to the complainant by her Banker - Vijaya Bank, Nanjangud Branch, through its letter elated 13.01.2003 as per -Ex.P5. Thereafter, notice dated 08.02.2003 came to be issued as per Ex.P5 to the accused.
12. Section 138 of the N.I. Act was introduced by Act 66/88. The object of bringing this section in the statute book as observed by Apex Court in the case of Electronics Trade and Technology Development Corporation Ltd. v. Indian Technologists and Engineers (Electronics) (P) Ltd. reported in : (1996) 2 SCC 739 is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments and despite civil remedy. Section 138 intended to prevent dishonesty on the part of the drawer of negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a bank and induce the payee or holder in due course to act upon it. In Vinay Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd. reported in : (2008) 2 SCC 305, the Supreme Court has observed that Section 138 was inserted to regulate financial promises in growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters, and it is designed to safeguard the faith of the creditor in the drawer of the cheque and with a view to curb cases of issuing cheques indiscriminately by making stringent provisions and safeguarding interest of creditors. It is in that, context, the dishonouring of the cheques issued for discharge of debt or liability was made an offence. However, the Legislatures have also provided certain safeguards to protect honest and sincere drawers of the cheque before they are proceeded with for a penal action. Proviso to Section 138 of the Act lays down certain conditions before the dishonouring of the cheque could become an offence. To constitute an offence under Section 138 several conditions have to be complied with, viz.:
i) The cheque drawn must, be on an account maintained by the drawer with a Banker
ii) The cheque issued must be towards discharge of debt or other liability either in whole or in part.
iii) The cheque must be presented within the period of six months from the date on which it was drawn or within the period of its validity, whichever is earlier.
iv) The cheque must have been returned un-paid either because of the money standing in credit is insufficient to honour the cheque or that exceeds the amount arranged to be paid from that account or an agreement made with the bank. etc.
v) The drawer or the holder in due course as the case may be should have made demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 15 days (as it stood prior to 06.02.2003 and subsequently within 30 days) of the receipt of the information by him from the Banker regarding the return of the cheque.
vi) The drawer of the cheque has failed to make payment of the amount covered under the cheque to the payee/drawee or the holder in due course, as the case may be within 15 days from the date of receipt of the notice.
13. As per Section 142 of the Act, the Court can take cognizance of the offence under Section 138 of the Act only on a complaint in writing made by the drawee or the holder in due course of the cheque, as the case may be and such a complaint should have been made within one month of the date on which the cause-of-action arose under Clause (c) of proviso to Section 138 of the Act. Thus, from reading of Sections 138 and 142 of the Act, it is clear that to constitute offence under Section 138 of the Act, several acts should be done by the drawee of the cheque and it is only when the drawer of the cheque fails to make payment within 15 days from the date of the receipt of the notice, the offence is complete. The offence though commences on dishonour of the cheque, becomes complete only upon the failure on the part of the drawer of the cheque to pay the amount covered under the cheque within 15 days from the date of the receipt of the notice. Therefore, issuance of notice as required under Clause (b) of proviso to Section 138 of the Act is a mandatory one and not a mere formality as sought to be contended by the learned Counsel for the appellant. The object behind issuance of notice under Clause (b) proviso to Section 138 is to give intimation to the drawer of the cheque about dishonouring of the cheque and to give him an opportunity to pay the money covered under the cheque and thereby to avoid the criminal prosecution being launched against him. Therefore, issuance of notice as required by Clause (b) is mandatory. In this background, it is necessary to find out as to whether the amendment brought to Clause (b) of the proviso to Section 138 of the Act w.e.f. 06.02.2003 by Act No. 55/2002 has retrospective effect. By this amendment brought in to force from 06.02.2003, the requirement of issuing notice on the part of the drawee of the cheque within 15 days was substituted by 30 days. In other words, by virtue of this amendment, notice should be issued within 30 days from the date of the receipt of the information from the Banker about return of the cheque. In the case on hand as noticed above, admittedly, the complainant received information from her Banker viz., Vijaya Bank, Nanjangud Branch on 13.01.2003 about return of the cheque. As per the law that existed as on 13.01.2003 notice was required to be given by the complainant to the accused within 15 days from 13.01.2003. That 15 days expired by 28.01.2003. There is no dispute that the complainant did not issue notice on or before 28.01.2003 as required by Clause (b) of proviso to Section 138 of the Act. As observed by the Apex Court in Uniplas India Ltd. v. State (Government of NCT of Delhi) : (2001) 6 SCC 8, if no notice is given within the period of 15 days as provided by Clause (b) of proviso to Section 138, no cause-of-action could have been created at all. However, taking advantage of the amendment brought into force on 06.02.2003 extending the period within which the notice could be issued to 30 days, the complainant issued notice as per Ex.P5 on 08.02.2003. By 29.01.2003, the complainant had lost his right to demand payment covered under the cheque from the drawer, as the period provided under Clause (b) had expired by then. As per the scheme of Sections 138 and 142 of the Act, the complainant could not have filed a complaint without issuance of notice. Unless the complaint is filed within 30 days from the date of occurring of the cause-of-action as provided under Clause (c) of proviso to Section 138 of the Act. the learned Magistrate can not rake cognizance.
14. No doubt, the words '15 clays' occurring in Clause (b) has been substituted by 30 days by the amendment. The question is as to whether by virtue of this amendment, the complainant could have issued a notice on 08.02.2003 though he had lost his right to issue such notice of demand on or after 29.01.2003.
15. It is the submission of the learned Counsel for the appellant that since the amendment was by way of substitution, it is deemed to have been existed from the date of the commencement, of the Statute, as such, the complainant had a right to issue notice within 30 days. In this behalf, he placed reliance on the judgment of the Supreme Court reported in : AIR 1952 SC 324 [Shamrao V. Parvlekar and Ors. v. District Magistrate, Thana, Bombay and Ors.] and : ILR 1993 KAR. 2586 [Vijayakumar Shankarayya Sardar v. State of Karnataka). In : AIR 1952 SC 324. it has been held in Para-7 as under:
(7) The construction of an Act which has been amended is now governed by technical rules and we must first be clear regarding the proper canons of construction. The rule is that when a subsequent Act amends an earlier one in such a way as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed (except where that would lead to a repugnancy, inconsistency or absurdity) as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all.16. In : ILR 1993 KAR 2586 [Vijaykumar Shankarayya Sardar v. State of Karnataka], the Division Bench while referring to the observations made by the Supreme Court in the aforesaid decision (Shamrao's case), has. at Para-11 held thus:.The upshot of this discussion is that whenever an amended Act has to be applied subsequent to the date of amendment, the various unamended provisions of the Act have to be read along with the amended provision as though they are the part of it.' The amended part of the provision having got incorporated into the Act the provision of Section 79A of the Act as such should be read. Section 79A of the Act, has the opening words on and from the commencement of the amended act'. The amended Act, as stated earlier, is defined to be Act 1 of 1974 which came into effect, from 01.03.1974. From that date, no one can acquire an agricultural land if his income from sources other than agricultural lands is in excess of Rs. 50,000/-.
(Underlining as in the original)
17. Thus, in both the above decisions what has been laid down is that once the amendment brought to the existing Act, is incorporated in the principle Act, from that date, there is no need to refer to amending Act. In these decisions, the question as to whether such amendment has the retrospective effect has not been considered. Therefore, these decisions have no application to the case on hand.
18. Article 20(1) of the Constitution directs that no person shall be convicted of any offence except for violation of law in force at the time of the commission of the act charged as an offence.
19. In Shiv Bahadur Singh v. State of Vindhya Pradesh : AIR 1953 SC 394 the Constitution Bench of the Supreme Court while dealing with an expression 'Deemed to be in force' on account of the amendment, in Para-10 has observed thus:
(10) In this contention our attention has been drawn to the fact that the Vindhya Pradesh Ordinance 48 of 1949 though enacted on 11.09.1949, i.e. after the alleged offences were committed, was in terms made retrospective by Section 2 of the said Ordinance which says that the Act 'shall be deemed to have been in force in Vindhya Pradesh from 9th day of the August 1948', a date long prior to the date of the commission of the offences. It was accordingly suggested that since such a law at the time when it was passed was a valid law and since this law had the effect of bringing this Ordinance into force from 9.8.1949 it cannot be said that the convictions arc not in respect of 'a law in force' at the time when the offences were committed. This, however, would be to import a somewhat technical meaning into the phrase 'law in force' as used in Article 20. 'Law in force' referred to therein must be taken to relate not to a law 'deemed' to be in force and thus brought into force but the law factually in operation at the time or what may be called the then existing law. Otherwise, it is clear that the whole purpose of Article 20 would be completely defeated in its application even to 'ex post facto', laws passed after the Constitution. Every such 'ex post facto' law can be made retrospective, as it must be if it is to regulate acts committed before the actual passing of the Act, and it can well be urged that by such retrospective operation it becomes the law in force at the time of the commencement of the Act. It is obvious that such a construction which nullifies Article 20 cannot possibly be adopted. It cannot, therefore, be doubted that the phrase 'law in force' as used in Article 20 must be understood in its natural sense as being the law in fact, in existence and in operation at the time of the commission of the offence as distinct, from the law 'deemed' to have become operative by virtue of the power of legislature to pass retrospective laws. It follows that if the appellants are able to substantiate their contention that the acts charged as offence in this case have become such only by virtue of Ordinance No. 48 of 1949 which has admittedly been passed subsequent to the commission thereof, then they would be entitled to the benefit of Art.20 of the Constitution and to have their convictions set aside. This leads to an examination of the relevant pre-existing law.20. Again in : AIR 2008 SC 899 [Anil Kumar Goel v. Krishna Chand Kaura), the Hon'ble Supreme Court at Para-8, has held thus:
8. All laws that affect: substantive rights generally operate prospectively and there is a presumption against their retrospectively if they affect vested rights and obligations, unless the legislative intent is clear and compulsive. Such retrospective effect may be given where there are express words giving retrospective effect or where the language used necessarily implies that, such retrospective operation is intended. Hence the question whether a statutory provision has retrospective effect or not depends primarily on the language in which it is couched. If the language is clear and unambiguous, effect will have to be given to the provision in question in accordance with its tenor. If the language is not clear then the Court has to decide whether, in the light of the surrounding circumstances, retrospective effect should be given to it or not. (See Punjab Tin Supply Co., Chandigarh etc. etc. v. Central Government and Ors. : AIR 1984 SC 87).21. The law laid down by the Supreme Court in the cases of Shiv Bahadur Singh and Anil Kumar Goel, referred to supra aptly applies to the case on hand. There is nothing to indicate that the amendment brought to Clause (b) of proviso to Section 138 of the Act has retrospective effect. Merely because the said amendment was in the nature of substitution, it cannot have a retrospective effect, more so, when it relates to initiation of penal action. Therefore this Court is of the opinion that the amendment brought to Clause (b) of the proviso to Section 138 cannot be deemed to be in force from the inception and the amendment brought, into effect subsequently cannot create a fresh cause-of-action for the complainant to issue notice and lodge a complaint based on such notice.
22. As noticed above, alter the complainant received information from her Banker on 13.01.2003 about the return of the cheque, cause-of-action for issue of notice began to run. As per the law that existed on that day, she was required to issue notice, within 15 days, which expired on 28.01.2003. On account of the inaction on the part of the complainant in not issuing notice of demand within 15 days from the date of the receipt, of the information from her Banker about the return of the cheque, she had lost her right to file a compliant for an offence under Section 138 of the Act, as there was no demand in writing made by her to the drawer of the cheque as required by law. Unless such a demand had been made and unless an opportunity had been afforded to the drawer of the cheque, the offence was not complete. Therefore, the complainant had no right to present a complaint. The amendment brought into force from 06.02.2003 did not give her a right to issue a notice of demand in respect of dishonouring of the cheque on 09.01.2003, which was intimated to her on 13.01.2003. Therefore, the complaint lodged was defective and the learned Magistrate could not have taken cognizance of the offence alleged. In this view of the matter, the judgment of the learned Sessions Judge in acquitting the accused is just and proper.
23. I have perused the records to find out as to whether the judgment of the Sessions Judge is justified on merits of the case. Having regard to the evidence on record, the learned Sessions Judge is justified in holding that the defence of the accused appears to be probable and acceptable. It may also be noticed that, the civil suit filed by the appellant against the respondent/accused for recovery of the amount covered under the cheque in question has been dismissed on merits on the ground that (lie appellant/plaintiff therein has failed to prove passing of consideration and the appeal filed against the dismissal of the suit has also been dismissed by this Court. In this view of the matter, 1 see no merit in this appeal.
The appeal is dismissed.