The Chattisgarh High Court held that Amendment of section 142 of Negotiable Instruments Act, 1881, has retrospective effect. Justice Goutam Bhaduri said that it is an amendment of procedural law and not substantive law and hence it will have a retrospective effect.
Factual Background
Section 138 NI Act complaint was filed by the appellant in JMFC Pamgarh. But the Court returned the said complaint with a finding that the cheques which were drawn were dishonoured at Visakhapatnam, consequently, the Court of JMFC, Pamgarh will not have jurisdiction.The Court of JMFC had followed the law laid down in Dashrath Roopsingh Rathod vs. State of Maharashtra. Sessions court dismissed the revision petition filed by appellant which was also dismissed. Thereafter he approached the High Court.
Question of Law
- Whether the amendment carried out in N.I. Act, 1881 on 15.06.2015 would have a retrospective operation or would be prospective in nature. AND whether if such amendment has a retrospective effect whether the complaint filed by the petitioner could have been saved?
- Whether the petitioner can claim restoration of the complaint on the strength of amended Section of 142-A(1)(2) inserted by Negotiable Instrument (Amendment) Ordinance 2015 ?
Section 142 procedural law-has retrospective effect
The court held “Reading of amendment would show that it is an amendment of procedural law and not substantive law”. Relying on (1994) 4 SCC 602 – Hitendra Vishnu Thakur and others Vs. State of Maharashtra and AIR 1970 SC 1636 – NaniGopalMitra Vs. State of Bihar 1636, the court held that amendment carried out by Ordinance of 2015 (No.6 of 2015) on 15.06.2015 will have a retrospective effect dealing with procedure.
However, the Court refused to pass any order to continue the proceedings since on the date of promulgation of ordnance no complaint was pending before the Court of JMFC. The court said“If it is done, it would amount to legislation. The petitioner(s), therefore, if so advised may file a fresh complaint before Court having jurisdiction.”
The court further said that “if the complaint has already been returned and was not filed before the appropriate forum as per applicable law in force at the prevailing time no complaint would be presumed to be pending at that time. Therefore, there was no question of enquiring into and trying the offence in absence of a complaint”.
HIGH COURT OF CHHATTISGARH, BILASPUR
CRMP No. 620 of 2015
M/s. A.K.R. Transport, Barbhata (Salkhan),
Versus
M/s Kamakshi Shipping, AM/s. A.K.R. Transport, Barbhata (Salkhan),
Hon'ble Shri Justice Goutam Bhaduri
Dated; 21 .08.2015
Citation; 2015 ALLMR(CRI) JOURNAL646
Citation; 2015 ALLMR(CRI) JOURNAL646
1. Both these petitions arise out of the order dated 20.10.2014 passed in
Criminal Revision separately filed against the order dated 18.09.20142
passed by the Court of Judicial Magistrate First Class, Pamgarh,
District Janjgir Champa, Chhattisgarh. Since the questions of law and
facts involved in both these petitions are similar, they are being
disposed of by this common order.
2. Briefly stated facts of the case are that the petitioner M/s. A.K.R.
Transport filed two complaint cases under Section 138 of the
Negotiable Instruments Act, 1881 (for short N.I. Act) with the
averments that respondent M/s. Kamakshi Shipping had handed over
two Post Dated Cheques (PDC) - one amounting to Rs.4,90,000/- in
Cr.M.P.No.620/2015 and the other amounting to Rs.2,45,000/- in
Cr.M.P.No.650/2015 drawn in favour of complainant/ petitioner herein
in the month of February, 2014. The cheques were post dated of
10.04.2014. The cheques were drawn on ICICI Bank,
Visakhapatnam, who was the banker of M/s. Kamakshi Shipping, the
respondent herein. Both the cheques were presented by the
petitioner for encashment to his Banker on 10.04.2014 with S.B.I.
Branch at Shivrinarayan, Chhattisgarh. The cheques having been
sent for collection, it was reported by ICICI bank, Visakhapatnam that
the said cheques were dishonoured. Having received the intimation
of dishonour of cheques due to instruction of “stop payment” by the
respondent, a legal notice was sent on 03.07.2014 but despite receipt
of such notice on 09.07.2014, the payment was not made.
Consequently on 20th August, 2014, a complaint was filed by the
petitioner under Section 138 N.I. Act, 1881 before the Court of JMFC,
Pamgarh. The said complaint having been filed, the Court of JMFC,
Pamgarh at the time of registration of complaint passed an order
dated 18.09.2014 and returned the said complaint with a finding that
the cheques which were drawn were dishonoured at Visakhapatnam,
consequently, the Court of JMFC, Pamgarh will not have jurisdiction.
3. The Court of JMFC followed the law laid down in Dashrath3
Roopsingh Rathod Vs. State of Maharashtra reported in (2013) 9
SCC 129 decided on 01.08.2014. The said order passed by the
JMFC was subject of challenge by way of revision before the
Sessions Judge, Janjgir Champa, Chhattisgarh. The Sessions Judge
by its order dated 20.10.2014 dismissed the revision with an
observation that the petitioner contended that while returning the
complaint, two months' time should have been provided by the JMFC,
Pamgarh, to file compliant before appropriate jurisdictional forum, but
the JMFC has not given two months' time. However, the revisions so
preferred were dismissed. Therefore, the said orders are subject of
challenge before this High Court by way of these petitions.
4. Shri Ashutosh Ghade, Advocate, was appointed as Amicus Curiae in
this matter to assist the Court. The petitioner was represented by
Shri K.A. Ansari, Sr. Advocate.
5. Learned counsel Shri Ashutosh Ghade appearing as Amicus Curiae
made his submissions on the basis of law laid down in (2014) 9
SCC 129 - Dashrath Rupsingh Rathod Vs. State of Maharashtra
and further to interpret the date of application of amendment by way
of ordinance, placed reliance in a case law reported in AIR 1970 SC
1636 – Nani Gopal Mitra Vs. State of Bihar and 1994 SC 4602. He
would submit that after pronouncement of judgment of Hon'ble the
Supreme Court on 01.08.2014 in Dashrath Rupsingh Rathod, the
Negotiable Instrument Act was amended by Amendment No.6 of
2015. It is contended that though the amendment was procedural in
nature, but the benefit of it cannot be granted to the petitioner in given
facts of the case. It is submitted that since on the date of return of
complaint under Section 138 of N.I. Act by the JMFC on 18.09.2014
and on that date the order of Supreme Court was in force, which
would be a law under Article 141 of the Constitution of India. It is
contended that therefore the said order of return of complaint is well4
merited. It is also contended that the amendment of Section 142 in
N.I. Act being procedural in nature though might have retrospective
effect but the benefit of it could not be extended to the petitioner as
the complaint having been returned, no proceeding was pending on
the date of amendment before the JMFC, Pamgarh.
6. Learned Senior Advocate Shri Ansari would submit that the petitioner
herein has prayed to invoke the power under Section 482 of Cr.P.C.,
it is stated that the scope u/s 482 of Cr.P.C., is vast in nature and it
will be a futile exercise to file a complaint time and again after the
amendment of ordinance came in force. Therefore, in the interest of
justice, the petition be allowed and the order of both the courts below
be quashed.
7. I have heard Shri Ashutosh Ghade, Amicus Curiae, at length to
adjudicate legal controversy of this lis. Admittedly, the complaint
under Section 138 of N.I. Act was filed on 20.08.2014. Hon'ble the
Supreme Court in Dashrath Rupingh Rathod Vs. State of
Maharashtra (supra) passed the order on 01.08.2014. Therefore, on
the date of filing of complaint by the Magistrate, the order of Supreme
Court was in operation which had the binding effect as the N.I. Act
was amended in the month of June, 2015. Since the Supreme Court
has declared the law by its judgment dated 01.08.2014 which had a
binding effect on all Courts under Article 141 of the Constitution of
India, the return of complaint for a cheque drawn on ICICI Bank,
branch at Visakhapatnam (A.P), the Court at Pamgarh, Chhattisgarh
did not have the jurisdiction, as such the learned court of JMFC was
justified in doing so.
8. Their Lordships of Supreme Court at para 22 of the decision, on
consideration thought it expedient to direct that only those cases
where, post the summoning and appearance of the alleged accused,5
the recording of evidence has commenced as envisaged in Section
145(2) of the N.I.Act, 1881 those proceedings were allowed to be
continued at that place where the complaint was filed. Therefore, it
would lead to infer that only those cases where the summons have
been issued were saved. It did not save the cases wherein the
evidence was at pre-summoning stage either by way of affidavit or
oral statement. Herein in the instant case, the order of the JMFC,
Pamgarh would show that the instant case was in pre-summoning
stage, therefore, by application of such case law, it was not saved. At
this stage, the relevant para of 2014 (9) SCC 129 is reproduced
herein below:
“22. We are quite alive to the magnitude of the impact
that the present decision shall have to possibly lakhs of
cases pending in various courts spanning across the
country. One approach could be to declare that this
judgment will have only prospective pertinence i.e.
applicability to complaints that may be filed after this
pronouncement. However, keeping in perspective the
hardship that this will continue to bear on alleged
respondent-accused who may have to travel long distance in
conducting their defence, and also mindful of the legal
implications of the proceedings being permitted to continue
in a court devoid of jurisdiction, this recourse in entirety does
not commend itself to us. Consequent on considerable
consideration we think it expedient to direct that only those
cases where, post the summoning and appearance of the
alleged accused, the recording of evidence has commenced
as envisaged in Section 145(2) of the Negotiable
Instruments Act, 1881, will proceeding continue at that
place. To clarify, regardless of whether evidence has been
led before the Magistrate at the pre-summoning stage, either
by affidavit or by oral statement, the complaint will be
maintainable only at the place where the cheque stands
dishonoured. To obviate and eradicate any legal
complications, the category of complaint cases where
proceedings have gone to the stage of Section 145(2) or
beyond shall be deemed to have been transferred by us6
from the court ordinarily processing territorial jurisdiction, as
now clarified, to the court where it is presently pending. All
other complaints (obviously including those where the
respondent accused has not been properly served) shall be
returned to the complainant for filing in the proper court, in
consonance with our exposition of the law. If such
complaints are filed/refiled within thirty days of their return,
they shall be deemed to have been filed within the time
prescribed by law, unless the initial or prior filing was itself
time barred.”
9. As a consequence, concluding the fact, primarily it would be evident
that on the date of filing of complaint on 20.08.2014 and the date of
return of the complaint on 18.09.2014, the order of the Supreme
Court was in force which mandates that the complaint would lie only
where the cheque was dishonoured. In the instant case, the cheques
having been dishonoured at Visakhapatnam as on that date, the
complaint would lie only at Visakhapatnam and any complaint filed
before any other Court would have no jurisdiction at all.
10. The second aspect of the matter is about the effect of ordinance
dated 15.06.2015 carried out in N.I. Act. For the sake of ready
reference, the Negotiable Instruments (Amendment) Ordinance, 2015
which came into being w.e.f. 15.06.2015 is reproduced hereinbelow:
3. In the principal Act, section 142 shall be numbered as subsection
(1) thereof and after sub-section (1) as so numbered, the
following sub-section shall be inserted, namely:—
“(2) The offence under section 138 shall be inquired into and
tried only by a court within whose local jurisdiction,—
(a) if the cheque is delivered for collection through an account,
the branch of the bank where the payee or holder in due course,
as the case may be,maintains the account, is situated; or
(b) if the cheque is presented for payment by the payee or
holder in due
course otherwise through an account, the branch of the drawee7
bank where the
drawer maintains the account, is situated.
Explanation.—For the purposes of clause (a), where a cheque
is delivered for collection at any branch of the bank of the payee
or holder in due course, then, the cheque shall be deemed to
have been delivered to the branch of the bank in which the payee
or holder in due course, as the case may be, maintains the
account.”.
4. In the principal Act, after section 142, the following section
shall be inserted,
namely:—
‘‘142A. (1) Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 or any judgment, decree, order or
directions of any court, all cases arising out of section 138 which
were pending in any court, whether filed before it, or transferred
to it, before the commencement of the Negotiable Instruments
(Amendment) Ordinance, 2015 shall be transferred to the court
having jurisdiction under sub-section (2) of section 142 as if that
sub-section had been in force at all material times.
(2) Notwithstanding anything contained in sub-section (2) of
section 142 or sub-section (1), where the payee or the holder in
due course, as the case may be, has filed a complaint against the
drawer of a cheque in the court having jurisdiction under subsection
(2) of section 142 or the case has been transferred to that
court under sub-section (1), and such complaint is pending in that
court, all subsequent complaints arising out of section 138
against the same drawer shall be filed before the same court
irrespective of whether those cheques were delivered for
collection or presented for payment within the territorial
jurisdiction of that court.
(3) If, on the date of commencement of the Negotiable
Instruments (Amendment) Ordinance, 2015, more than one
prosecution filed by the same payee or holder in due course, as
the case may be, against the same drawer of cheque is pending
before different courts, upon the said fact having been brought to
the notice of the court, such court shall transfer the case to the
court having jurisdiction under sub-section (2) of Section 142
before which the first case was filed and is pending, as if that subsection
had been in force at all material times.”8
11. So on the date of amendment of ordinance, by application of facts,
the complaint under Section 138 filed before the JMFC was not
pending having been returned on 18.09.2014. Now the question
arises for consideration that whether the petitioner can claim
restoration of the complaint on the strength of amended Section of
142-A(1)(2) inserted by Negotiable Instrument (Amendment)
Ordinance 2015 ?
The answer would be certainly in negative. The reasons would be -
(i) the complaint was returned by JMFC Pamgarh in the
light of decision of Supreme Court in Dashrath Rupsingh Rathod
which at the relevant time was holding the field and has authority
of law under Article 141 of Constitution of India and therefore the
said judgment has a binding effect on all the Courts uptill the
Ordinance, 2015 came into being.
(ii) Further reading of newly inserted section 142(2)
shows that the same effect does not extend to the complaints
already returned as it contains the words “The offence under
section 138 shall be enquired into and tried only by court within
whose local jurisdiction”. So, if the complaint has already been
returned and was not filed before the appropriate forum as per
applicable law in force at the prevailing time no complaint would
be presumed to be pending at that time. Therefore, there was no
question of enquiring into and trying the offence in absence of a
complaint.
12. The last question falls for consideration as to whether the
amendment carried out in N.I. Act, 1881 on 15.06.2015 would have a
retrospective operation or would be prospective in nature. AND
whether if such amendment has a retrospective effect whether the
complaint filed by the petitioner could have been saved ? In order to
find out the answer, the respective amendment was read in between 9
the lines. Reading of amendment would show that it is an amendment
of procedural law and not substantive law. The Supreme Court way
back in a case law reported in AIR 1970 SC 1636 – Nani Gopal
Mitra Vs. State of Bihar 1636, while interpreting the amendment in
procedural law, held thus at para 5:
“5. …........ It is therefore clear that as a
general rule the amended law relating to procedure operates
retrospectively. But there is another equally important
principle, viz., that a statute should not be so construed as to
create new disabilities or obligations or impose new duties in
respectof transactions which were complete at the time the
amending Act came into force (See In re a Debtor, 1936 Ch
237 and in re Vernazza, 1960 AC 965). The same principle is
embodied in S.6 of the General Clauses Act which is to the
following effect:
xx xx xx xx
Thereafter at Para 6 it has been held thus
“The effect of the application of this principle is
that pending cases, although instituted under the old Act but
still pending, are governed by the new procedure under the
amended law, but whatever procedure was correctly adopted
and concluded under the old law cannot be opened again for
the purpose of applying the new procedure. In the present
case, the trial of the appellant was taken up by the Special
Judge, Santhal Parganas, when Section 5(3) of the Act was
still operative. The conviction of the appellant was pronounced
on March 31, 1962 by the Special Judge, Santhal Parganas,
long before the amending Act was promulgated. It is not
hence possible to accept the argument of the appellant that
the conviction pronounced by the Special Judge, Santhal
Parganas, has become illegal or in any way defective in law
because of the amendment to procedural law made on
December 18, 1964. In our opinion, the High Court was right
in invoking the presumption under S.5(3) of the Act even
though it was repealed on December 18, 1964 by the
amending Act. We accordingly reject the argument of the10
appellant on this aspect of the case.”
13. Likewise in (1994) 4 SCC 602 – Hitendra Vishnu Thakur and
others Vs. State of Maharashtra the Supreme Court had occasion
to deal with an amendment in substantive law and the procedural law
wherein the Court has held in Para 26 as under:
“26. The Designated Court has held that the
amendment would operate retrospectively and would apply to
the pending cases in which investigation was not complete on
the date on which the amendment Act came into force and the
challan had not till then been filed in the court. From the law
settled by this Court in various cases the illustrative though not
exhaustive principles which emerge with regard to the ambit
and scope of an Amending Act and its retrospective operation
may be culled out as follows:
(i) A statute which affects substantive rights is presumed to
be prospective in operation unless made retrospective, either
expressly or by necessary intendment, whereas a statute
which merely affects procedure, unless such a construction is
textually impossible, is presumed to be retrospective in its
application, should not be given an extended meaning and
should be strictly confined to its clearly defined limits.
(ii) xxx xxx xxx
(iii) xxx xxx xxx
(iv) A procedural statute should not generally speaking be
applied retrospectively where the result would be to create
new disabilities or obligations or to impose new duties in
respect of transactions already accomplished.
(v) xxx xxx xxx
14. Similar view has been reiterated in case law reported in (2008) 9
SCC 306 – T. Kaliamurthi and others Vs. Five Gori Thaikkal Wakf
and others wherein the Supreme Court held that it is well settled that
no statute shall be construed to have retrospective operation until its
language is such that would require such conclusion. The Exception 11
to this rule is enactments dealing with procedure. Therefore, by
application of the aforesaid principle, in the opinion of this Court, the
amendment carried out by Ordinance of 2015 (No.6 of 2015) on
15.06.2015 will have a retrospective effect dealing with procedure.
15. Consequently, on careful consideration of all the facts and for the
reasons stated in the foregoing paragraphs, I do not find any illegality
in the order of JMFC as also the revisional Court warranting
interference by this Court and thus impugned orders cannot be set
aside. In the result, both the petitions fail and are dismissed.
16. Now turning to the argument advanced by the learned Senior
Advocate to restore the complaint, the said argument cannot be
allowed to sustain. This Court in exercise of its inherent power u/s
482 Cr.P.C., cannot pass any order to continue the proceedings since
on the date of promulgation of ordnance no complaint was pending
before the Court of JMFC. If it is done, it would amount to legislation.
The petitioner(s), therefore, if so advised may file a fresh complaint
before Court having jurisdiction. However, it has to satisfy the
reasons for the delay in filing the complaint, which may be
adjudicated on its merits by the competent Court.
17. With such observation, the petition stands disposed of.
18. Before parting with the case, this Court highly appreciates the
valuable assistance rendered by the Amicus Curiae.
Sd/-
GOUTAM BHADURI
JUDGE
Rao
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