K. Prashanth vs Bharti Telenet Limited

M. Jeyapaul, J.—The petition is filed seeking to quash the criminal proceedings in C.C. No. 3505 of 2003 on the file of the XIV

Metropolitan Magistrate, Egmore, Chennai.

In the criminal proceedings initiated by the respondent/complainant for offence punishable u/s 138 of the Negotiable Instruments Act as against

the petitioner/accused, the latter, having contended that the statutory notice was slapped on the petitioner/accused only after the expiry of 15 days

from the date of intimation of the return of the cheque, seeks for quashment.

The complainant is Bharti Telenet Limited. The accused K. Prashanth subscribed for the telephone services provided by the Telephone

Company by sending a subscription form accepting the terms and conditions therein. The accused was highly irregular in making payment under the

said agreement. The accused was liable to pay a balance sum of Rs. 9,00,000/= towards the aforesaid services provided to the accused. The

accused issued a cheque bearing No. 653575 dated 14.1.2003 for a sum of Rs. 9,00,000/= drawn on Hong Kong and Shanghai Banking

Corporation Limited, Mylapore, Chennai. The complainant presented the cheque for payment, but the cheque was returned unpaid by the banker

with the endorsement ""payment stopped by the drawer"". The complainant issued lawyer''s notice dated 10.2.2003 calling upon the accused to pay

the amount, but, the notice was returned on 11.2.2003. The complainant, having thus alleged, prosecuted the accused for the offences punishable

u/s 138 of the Negotiable Instruments Act before the learned XIV Metropolitan Magistrate, Egmore, Chennai.

The grievance of the accused is that the dishonour of the cheque was admittedly intimated to the complainant by the Banker on 15.1.2003, but,

the statutory notice was issued only on 10.2.2003 after the expiry of statutory period of 15 days. Therefore, the accused would contend that the

criminal proceedings u/s 138 of the Negotiable Instruments Act initiated as against him is liable to be quashed.

The court heard the submissions made on either side.

Learned Counsel appearing for the accused would submit that the prosecution case launched with the defective statutory notice is not

sustainable before the court of law.

Learned Counsel appearing for the complainant would submit that after the amendment made by Act 55 of 2002 to Section 138 proviso (b) of

the Negotiable Instruments Act, the payee or the holder in due course of the cheque has a statutory period of 30 days to issue the notice from the

date of receipt of information regarding the return of cheque.

It is the admitted case that the intimation regarding the dishonour of the cheque was given by the banker to the complainant on 15.1.2003 before

the amendment by Act 55 of 2002 came into effect from 6.2.2003. Only 15 days statutory period was originally given to issue notice to the

accused from the date of receipt of information. But, by the Amendment Act 55 of 2002, such a statutory period has been enlarged to 30 days.

It is found that only 15 days statutory period was available for the complainant to issue notice on receipt of information from the banker

regarding the return of the cheque prior to 6.2.2003, the date on which the amended provision came into force. The 15 days statutory period from

15.1.2003, the date on which intimation of dishonour of cheque was served on the complainant, has expired on 1.2.2003 about five days prior to

coming into force of the amended provision u/s 138 proviso (b) of the Negotiable Instruments Act by Act 55 of 2002.

Learned Counsel appearing for the accused refers to an authority reported in Controller of Estate Duty, Gujarat I, Ahmedabad Vs. M.A.

Merchant, Accountable Person of Late Shri A.G. Merchant, Majirajwadi Road, Bhavnagar and Others, wherein it has been held as follows:

The new Section 59 came into force from 1 July, 1960. Much earlier, on 26 February, 1960 the assessment on the accountable person had

already been completed. There is a well settled principle against interference with vested rights by subsequent legislation unless the legislation has

been made retrospective expressly or by necessary implication. If an assessment has already been made and completed, the assessee cannot be

subjected to re-assessment unless the statute permits that to be done.

That was a case where the Assistant Controller of Estate Duty exercised his power in the guise of the amended provision to re-open the

assessment which was already made before the coming into force of the amended provision. The Honourable Supreme Court has held that once

the entire transaction was already completed prior to the amendment giving power to the authority concerned for re-opening the assessment, the

assessee cannot be subjected to re-assessment in the guise of the amended provision which came into effect later in point of time.

It has been held in Debi Dutta Moody Vs. T. Bellan and Others, that if at the time when a change in the law comes into operation, the right to

proceed was already barred in the old Act, then it cannot be revived by virtue of the amendment unless there was an express enactment to that

effect.

In this case, the complainant has miserably failed to issue notice within 15 days from the date of receipt of intimation from the banker as to the

dishonour of the cheque as per the provision in vogue then. Taking advantage of the amendment which came into effect after five days from the

expiry of the 15 days stipulated u/s 138 proviso (b) of the Negotiable Instruments Act, the complainant has now laid the complaint issuing notice

after the lapse of 15 days contending that the new amended provision provides for 30 days statutory period for issuance of notice from the date of

receipt of information from the banker as to the dishonour of the cheque.

The learned Counsel appearing for the complainant submitted an authority reported in Hitendra Vishnu Thakur and Others Vs. State of

Maharashtra and Others, wherein it has been held in para 26 as follows:

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 thought 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) Law relating to forum and limitation is procedural in nature, whereas law relating to right of actin and right of appeal even though remedial is

substantive in nature.

(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law.

(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) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation,

unless otherwise provided, either expressly or by necessary implication.

The question that arose for adjudication in the aforesaid case was whether the amended procedural statute should be applied to the pending cases.

The Honourable Supreme Court has held that as far as pending criminal cases are concerned, as the procedural statute does not vest any

substantive right upon the accused, the amended procedure can be retrospectively applied.

But, in the instant case, it is found that the entire cause of action, which arose before the amended provision came into force on 6.2.2003, had

terminated as early as on 1.2.2003 even before the prosecution was launched as against the accused by the complainant. It is not a case where an

amended procedural law is sought to be applied to a pending case. The complainant wants to give a new lease of life to the statutorily barred

prosecution taking advantage of the enlarged period of limitation now prescribed by way of amendment. Therefore, the aforesaid authority cited by

the learned Counsel for the complainant does not have any application to the facts and circumstances of the case.

Of course, the Bombay High Court in Indraprastha Holdings Ltd. Vs. Vijay J. Shah and Another, has held that where a statute merely affects

procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application. In other words, a change in the law

of procedure operates retrospectively unlike the law relating to vested right which is only prospective in its operation. That also was a case arising

under the prosecution u/s 138 of the Negotiable Instruments Act. The question that arose for consideration in that case was whether the Trial

Court could adopt the procedure of recording evidence which was in vogue prior to the amendment or as per the procedure contemplated relating

thereto as per the amended provision. As the said question had arisen in a pending case, the court has held that the procedure of recording

evidence as per the amended provision can be retrospectively given effect to and the evidence of the complainant can be recorded as per the

amended provision though the case was launched beforeever the amendment was effected with respect to the manner of recording evidence.

The facts and circumstances of the case on hand is totally different. The question which has arisen for determination in the instant case is

whether the complainant can give a new lease of life to the statutorily barred action for prosecution even before the new amendment has come into

force, taking advantage of the enlarged statutory period provided under the new amendment. As the complainant has been debarred from

prosecuting the accused as he had not chosen to give statutory notice within the fifteen days from the date of receipt of the intimation from the

banker, the complainant cannot take advantage of the aforesaid ratios which are found distinguishable on facts.

The fact remains that the complainant has not chosen to give notice on or before 1.2.2003, despite the fact that it was intimated by the bankers

as to the dishonour of the cheque as early as 15.1.2003 as per the statutory mandate then in vogue. Therefore, the complainant cannot legally

prosecute the accused having not complied with the aforesaid statutory mandate. In the above facts and circumstances, the prosecution launched

as against the accused is not sustainable in the eye of law.

Therefore, the criminal proceedings in C.C. No. 3505 of 2003 on the file of the XIV Metropolitan Magistrate, Egmore, Chennai is quashed.

The criminal original petition stands allowed.