Chhatisgarh high court;Amendment of Section 142 NI Act has retrospective effect

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

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