In the peculiar facts and circumstances of the case, while
keeping in mind the legislative intent and the specific plea of the
appellant raised in the grounds for the Special Leave Petition that he
should have been allowed to move an application for condonation of
delay before the Trial Court as the respondent has not suffered any
prejudice by reason of 25 days delay, we strongly feel that the
appellant should not have been deprived of the remedy provided by
the Legislature. In fact, the remedy so provided was to enable a
genuine litigant to pursue his case against a defaulter by overcoming
the technical difficulty of limitation. Hence, the High Court has
committed an error by not considering the issue of limitation on
merits.
23.
In view of the settled principles of law in Rakesh Kumar Jain,
MSR Leathers. Subodh S. Salaskar (supra) and in the peculiar
facts and circumstances of the case, we are of the considered
opinion that the High Court was not right in quashing the complaint
merely on the ground that complaint is barred by limitation, that too a
plea which was taken for the first time before the High Court. On the
other hand, the High Court ought to have remanded the matter to the
Trial Court for deciding the issue of limitation.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1684 OF 2014
ARISING OUT OF
SPECIAL LEAVE PETITION (CRL) NO. 8924 OF 2013
PAWAN KUMAR RALLI
VERSUS
MANINDER SINGH NARULA
N.V. RAMANA, J.
Dated;AUGUST 11, 2014
Leave granted.
2.
This appeal arises out of the judgment and order dated 15 th
January, 2013 of the High Court of Delhi passed in Criminal
Miscellaneous Case No. 2961 of 2012 filed by the respondent herein
under Section 482 of the Criminal Procedure Code. By the said
judgment, the High Court quashed the criminal proceedings initiated
by the appellant under Section 138 of the Negotiable Instruments Act,
1881 (hereinafter referred to as ‘the Act’) against the respondent.
3.
The brief history of the case, according to the appellant, is that
he had given a loan of Rs.60 lakhs to the respondent in the month of
November, 2011. In discharge of his obligation to the appellant, on
25th April, 2012, the respondent issued (i) Cheque No. 889953, drawn
on Allahabad Bank, for Rs.30 lakhs; (ii) Cheque No. 545420, drawn
on ICICI Bank, for Rs.20 lakhs; and (iii) Cheque No. 545409, drawn
on ICICI Bank, for Rs. 10 lakhs. When the appellant presented the
said cheques in his Bank for realization, they were dishonoured by
the respondent’s banker with remarks ‘Stop Payment’.
4.
The appellant, after receiving the communication from his
banker about the dishonour of Cheques, issued a handwritten notice
(Annexure P4) to the respondent on 27 th April, 2012 calling upon him
to make the payment. Upon non-compliance by the respondent, a
formal legal notice dated 24th May, 2012 (Annexpure P5) was issued
under Section 138/142 of the Act requiring the respondent to pay the
cheques amount along with interest and costs. In his reply to the legal
notice, the respondent totally disagreed with the allegation of taking
loan from the appellant. Subsequently, the appellant filed a Complaint
Case against the respondent invoking Sections 138, 141 and 142 of
the Act and Section 420, of the Indian Penal Code. The Metropolitan
Magistrate took cognizance and summoned the respondent who
pleaded not guilty and claimed to be tried.
5.
During the pendency of trial, the respondent filed Criminal
Miscellaneous Case before the High Court under Section 482,
Cr.P.C. for quashing of criminal proceedings pending before the Trial
Court. The High Court expressed the view that the complaint was not
filed within a period of one month after the expiry of 15 days of receipt
of the notice dated 27th April, 2012 and hence it was barred by
limitation under Section 142(b) of the Act and by the impugned
judgment quashed the criminal proceedings against the respondent.
Aggrieved by the order of the High Court, the appellant-complainant
approached this Court by way of Special Leave Petition.
6.
Before us, the case of the appellant is that the High Court was
not justified in exercising extra ordinary jurisdiction under Section
482, Cr.P.C. The High Court incorrectly considered the handwritten
note as legal notice and calculated the limitation period accordingly.
Whereas, the handwritten note was only an intimation to the accused
and according to the provisions of law, the actual notice within 30
days from the date of dishonour of the cheques, was issued on 24 th
May, 2012 and accordingly criminal proceedings were initiated well
within the limitation period. But, the High Court failed to take into
consideration this material fact and merely on the ground of 25 days
delay from the date of service of handwritten note, quashed the
criminal proceedings. The High Court ignored the fact that the Act
clearly enables the Court to condone the delay, if any, beyond 30
days of limitation period under proviso to Section 142(b) of the Act.
7.
During the course of hearing, we felt it justifiable to have
assistance of a senior counsel and we accordingly appointed
Mr. Huzefa Ahmadi, learned senior counsel as Amicus Curiae.
8.
Learned Amicus submitted that the handwritten note dated 27 th
April, 2012 whereby the appellant called upon the respondent to
make payment, would fall within the four corners of ‘notice’ under
Section 138(b) of the Act and there was a delay of 25 days in filing
the Complaint under the provisions of the Act. He further submitted
that the proviso to Section 142(b) of the Act confers power on the
Court to condone the delay, if the complainant satisfies the Court on
the part of delay. As it was believed by the Trial Court that since the
legal notice was issued on 24 th May, 2012 the limitation period would
come into force from that date only, there was no occasion for the
appellant to plead for sufficient cause for condonation of delay as the
question of delay did not arise before the Trial Court. While issuing
process, the Trial Court was clearly of the view that the Complaint
was within limitation on the basis of averments made in the
Complaint. Therefore, the occasion did not arise for the appellant to
raise the plea of ‘sufficient cause’ for the delay. Moreover, the
respondent had also not raised the question of limitation before the
Trial Court and the issue of limitation was raised for the first time
before the High Court.
9.
Even otherwise, before quashing the criminal proceedings on
the ground of limitation, the High Court could have decided whether
sufficient cause was made out by the appellant under the proviso to
Section 142(b) of the Act, and if satisfied, it could have condoned the
delay. Alternatively, the High Court could have remanded the matter
to the Trial Court to determine the issue. In support of his
submissions, he placed reliance on a judgment of this Court in
Rakesh Kumar Jain Vs. State (Through CBI) (2000) 7 SCC 656, in
which while considering the provisions of Section 473, Cr.P.C. and
deciding the question whether on the ground of limitation, the
accused is entitled to seek his discharge, this Court held:
“The mere fact that the complaint was filed 25 days after
the expiry of the period of limitation did not entitle the
accused to seek his discharge under Section 245, Cr.P.C
because the complainant has, under law, a right to seek
for extension of time under Section 473 Cr.P.C. The
complainant could satisfy the Magistrate on the facts and
circumstances of the case that the delay was explainable
which was occasioned on account of their bona fide belief
to obtain the sanction for the purpose of filing the
complaint”.
10.
Learned Amicus finally submitted that the legislative intent in
inserting the proviso to Clause (b) of Section 142 of the Act was only
to protect the Cheque holders from the defaulters who issued the
Cheques and the Court should act reasonably in providing an
opportunity to the Cheque holder to present his version on the issue
of delay if any. After taking into consideration the reasons advanced
by the Cheque holder, the Court should consider the question of
delay and then only it should pass an order. But in the present case,
the High Court adopted an unhealthy approach by passing the
impugned order quashing the criminal proceedings on the ground of
limitation, that too for a delay of only 25 days, without considering the
appellant’s reasons for the delay. He further submitted that the
observation of the High Court in the impugned order that “allowing the
appellant to pursue the Complaint against the respondent would be
an abuse of process” is also not in the interest of justice.
11.
Learned counsel for the respondent, on the other hand,
contended that there is no apparent error in the judgment of the High
Court in quashing the criminal proceedings on the ground of
limitation. The High Court has correctly treated the handwritten notice
sent by the appellant on 27 th April, 2012 as a valid notice in terms of
Section 138 of the Act as the appellant had given the notice in writing
within fifteen days of information of dishonour of the Cheuqes from
his banker. In support of this contention learned counsel has cited the
judgment of this Court in Central Bank of India & Anr. Vs. Saxons
Farms & Ors. (1999) 8 SCC 221 wherein this Court held that though
no form of notice is prescribed in Clause (b) of Section 138 of the Act,
the requirement is that notice shall be given in writing within fifteen
days of receipt of information from the bank regarding return of the
Cheque as unpaid and in the notice a demand for payment of the
amount of the Cheque has to be made. So, learned counsel argued
that looking at this settled legal position, the first notice issued by the
appellant on 27th April, 2012 had since fulfilled the criteria laid down
by this Court, the same has to be treated as ‘notice’ within the
Page 7
8
meaning of Section 138(b) of the Act. Therefore, he submitted that
the High Court was right in considering the handwritten note as
‘notice’ for the purpose of calculating delay in filing the Complaint and
it rightly declared that the Complaint was barred by limitation.
12.
Learned counsel for the respondent further contended that
even though the proviso to Section 142(b) of the Act facilitates
condonation of delay if the complainant satisfies the Court that he
had cogent reasons for not making the complaint within the limitation
period, in the present case the complainant had made no request
before the High Court for availing such benefit of condonation of
delay. To substantiate his argument, learned counsel relied upon the
counter affidavit filed by the appellant before the High Court and
submitted that there also the appellant, instead of pleading for
condonation of delay, took the stand that the communication dated
27th April, 2012 shall not be treated as notice, whereas it fulfilled all
ingredients of a ‘notice’ under Section 138 of the Act. In support of his
claim that the matter is barred by limitation and requires to be
dismissed at the threshold itself, he relied on this Court’s Judgment in
Ramesh Chand Sharma Vs. Udham Singh Kamal & Ors. (1999) 8
SCC 304 and submitted that in that case also despite the objection of
limitation raised by the appellants, the first respondent did not file any
application for condonation of delay and this Court had dismissed the
O.A. filed by the first respondent, on the ground of limitation.
13.
Learned counsel for the respondent therefore firmly opposed
the plea of the learned Amicus that the matter has to be remanded
back to the Trial Court for hearing the issue of limitation by providing
an opportunity to the appellant to avail the remedy envisaged under
the proviso to Section 142(b) of the Act. He finally submitted that the
High Court was right in quashing the criminal proceedings and the
impugned order does not call for interference of this Court under
Article 136 of the Constitution.
14.
We have heard learned counsel at length. In view of the
conflicting approach adopted by the High Court in determining the
issue of limitation which subsequently led to the quashing of criminal
proceedings pending before the Trial Court, the following issues
emerge for our consideration for the disposal of this matter:
(a)
Whether the handwritten note sent by the appellant
on 27th April, 2012 to the respondent could be
treated as ‘notice’ or the notice issued by the
advocate on 24th May, 2012 could only be treated
as ‘notice’ within the meaning of Section 138 of the
Act?
(b) (c)
15.
If there was any delay in filing the Complaint in the
present case, whether such delay could have been
condoned by the High Court in accordance with the
provisions of the Act?
Whether the High Court was right in quashing the
criminal proceedings on the ground of limitation or
instead of quashing the criminal proceedings it
ought to have remitted the matter back to the Trial
Court for deciding the issue of limitation?
Before embarking on the above issues, we may notice that the
proviso appended to Section 138 of the Act limits the applicability of
the main provision stating:
138. Dishonour of cheque for insufficiency, etc. of
funds in the account.—
...
...
...
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 thirty days of the receipt of
information by him from the bank regarding the
return of the Cheque as unpaid; and
(c)
16.
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.”
Section 142 of the Act also puts a limitation on the power of the
Court to take cognizance of the offences, which reads as under:
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 cognizance 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)
17.
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.
Admittedly, in the case on hand, the Cheques in question were
issued by the respondent and the same were dishonoured by the
Bank on his instructions of ‘stop payment’. Two communications, one
a handwritten note dated 27th April, 2012 by the appellant himself
and the other a formal legal notice dated 24 th May, 2012 issued by
the advocate, were served on the respondent calling upon him to pay
the Cheque amounts. The respondent did not respond to the
handwritten communication, but has replied to the legal notice issued
through advocate on 24th May, 2012 denying the allegation. Upon
failure of the respondent to obey the handwritten communication as
well as the legal notice, the appellant initiated criminal proceedings by
filing Complaint Case on 5th July, 2012.
It appears that the
respondent contested the matter before the Trial Court and also filed
an application under Section 91, Cr.P.C. warranting the appellant to
produce various documents. He has also moved an application under
Section 410, Cr.P.C. seeking transfer of the Complaint to a different
Court. It is noteworthy that all through out the pendency of
proceedings before the Trial Court, the respondent did not raise the
issue of ‘limitation’. The issue was raised for the first time before the
High Court in Section 482, Cr.P.C. proceedings. The High Court,
considering the handwritten note sent by the appellant on 27 th April,
2012 as ‘notice’ under Section 138 of the Act, came to the conclusion
that the complaint is barred by limitation.
18.
This Court has already clarified in Central Bank of India &
Anr. (supra) that Section 138 of the Act does not prescribe any
specific form of notice, but mandates that it should be issued in
writing within thirty days (w.e.f. 6-2-2003) of receipt of information
from the banker about the dishonour of Cheque, with a demand to the
drawer for making payment of the said amount.
19.
We have perused the handwritten note dated 27 th April, 2012
(Annexure P4) and found that it was issued within the mandatory
period of thirty days of dishonour of cheques and contained (a) the
subject amount of Rs.60,00,000/- given by the appellant as loan to
the respondent under promissory notes; (b) the details of Cheque
numbers and dates of issue with amounts and particulars of Bank; (c)
Returning of Cheques by the banker dishonouring them on the
ground of ‘Stop Payment’ by the respondent; (d) a demand for
immediate repayment of the amount; and (d) a caution to the
respondent that in case of failure on the part of respondent, the
appellant would initiate legal proceedings. Thus, in our opinion, the
handwritten note dated 27th April, 2012 fulfilled the mandatory
requirements under clause (b) of proviso to Section 138 and could be
said to be a valid ‘notice’ in the light of this Court’s Judgment in
Central Bank of India & Anr. (supra). Moreover, this document
(Annexure P4) stands admitted by the appellant in his cross
examination also. Therefore, in our opinion, the High Court has
committed no error in considering the handwritten note dated 27 th
April, 2012 as ‘notice’ under Section 138 of the Act.
20.
However, when the issue of limitation has come up for the first
time before the High Court, it ought to have dealt with the same on
merits as per proviso to Section 142(b) of the Act. The said proviso
appended to clause (b) of Section 142 of the Act was inserted by the
Negotiable Instruments (Amendment and Miscellaneous Provisions)
Act, 2002 and the legislative intent was, no doubt, in order to
overcome the technicality of limitation period.
The Statement of
Objects and Reasons appended to the Amendment Bill, 2002
suggests that the introduction of this proviso was to provide discretion
to the Court to take cognizance of offence even after expiry of the
period of limitation [See MSR Leathers Vs. S. Palaniappan (2013) 1
SCC 177]. Only with a view to obviate the difficulties on the part of
the Complainant, Parliament inserted the proviso to clause (b) of
Section 142 of the Act in the year 2002. It confers a jurisdiction upon
the Court to condone the delay [See Subodh S. Salaskar Vs.
Jayprakash M. Shah (2008) 13 SCC 689].
21.
It is no doubt true that at the time of filing the complaint, the
Magistrate has to take cognizance of the complaint when it is within
limitation and in case of delay in filing the complaint, the complaint
has to come up with the application seeking condonation of delay.
But, the peculiar fact of the present case is that in the complaint, the
complainant had only averred that he has sent the legal notice dated
24th May, 2012 but not mentioned about the handwritten note dated
27th April, 2012. Basing on the said averment, the learned Trial Judge
was satisfied that the complaint is within the prescribed period of
limitation. Hence, in this case, raising the plea of limitation and Court
exercising the discretion to condone the delay did not arise at all.
22.
In the peculiar facts and circumstances of the case, while
keeping in mind the legislative intent and the specific plea of the
appellant raised in the grounds for the Special Leave Petition that he
should have been allowed to move an application for condonation of
delay before the Trial Court as the respondent has not suffered any
prejudice by reason of 25 days delay, we strongly feel that the
appellant should not have been deprived of the remedy provided by
the Legislature. In fact, the remedy so provided was to enable a
genuine litigant to pursue his case against a defaulter by overcoming
the technical difficulty of limitation. Hence, the High Court has
committed an error by not considering the issue of limitation on
merits.
23.
In view of the settled principles of law in Rakesh Kumar Jain,
MSR Leathers. Subodh S. Salaskar (supra) and in the peculiar
facts and circumstances of the case, we are of the considered
opinion that the High Court was not right in quashing the complaint
merely on the ground that complaint is barred by limitation, that too a
plea which was taken for the first time before the High Court. On the
other hand, the High Court ought to have remanded the matter to the
Trial Court for deciding the issue of limitation.
24.
At the same time, we want to make it very clear that by this
observation we are not laying down a legal proposition that without
even filing an application seeking condonation of delay at an initial
stage, complainant can be given opportunity at any stage of the
proceeding. As already discussed by us in the foregoing paragraphs,
we have come to the irresistible conclusion, to afford an opportunity
for the complainant to move an application seeking condonation of
delay, under the peculiar facts and circumstances of the case.
25.
For all the aforesaid reasons, in order to meet the ends of
justice, we exercise our discretion under Article 142 of the
Constitution and set aside the impugned judgment of the High Court
quashing the criminal proceedings and restore the criminal
proceedings before the Trial Court. The appellant is permitted to file
an application for condonation of delay before the Trial Court and if
such an application is filed, the Trial Court shall be at liberty to
consider the same on its own merits, without being impressed upon
by any of the observations by this Court, and pass appropriate
orders.
26.
We are thankful to Mr. Huzefa Ahmadi, learned amicus curiae,
for his able assistance.
27.
The appeal stands allowed with the aforesaid observations.
.........................................J.
(RANJANA PRAKASH DESAI)
.........................................J.
(N.V. RAMANA)
NEW DELHI
AUGUST 11, 2014
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