Kharar Rice and General Mills vs Jiwa Ram Parkash

K.S. Kumaran, J.—The respondent herein filed a criminal complaint 9An-nexure P) before the Judicial Magistrate 1st Class, Ropar against the petitioners u/s 406, 420, Indian Penal Code and Sections 138 of the Negotiable Instruments Act (hereinafter called the Act) on the allegations that the petitioners herein who had purchased paddy from the respondent firm issued two cheques, one for Rs. 30,000/- and another for Rs. 35,000/- but when the cheques were presented, the same were dishonored and received back on 17.11.1992. The respondent herein has also alleged in the complaint that he issued a notice an-20.11.1992 to the petitioners herein but the same was returned on 2.12.1992 as undelivered. On 3.7.1993, the complaint was dismissed in default as none appeared for the complainant (respondent herein) was present in the Court. But, on 20.7.93, the respondent herein filed an application before the, said Court for the restoration of the complaint. The learned Magistrate allowed that application and restored the complaint back to his file on 10.11.1994 (Annexure P4). One the very next day, the learned Magistrate ordered that the accused, namely, the present petitioners to be summoned for their trial u/s 138 of the Act. The petitioners have come forward with this petition u/s 482, Cr.P.C. for quashing the complaint (Annexure PI), the restoration order (Annexure P4) and the summoning order (Annexure P5).

After notice of motion, I have heard the counsel for both sides and admit this petition. Arguments was advanced by both the sides at length. The Learned Counsel for the petitioners first of all contends that the allegations made in the complaint do not make out an offence u/s 138 of the Negotiable Instruments Act and, therefore, the complaint and the other proceedings should be quashed. He pointed out that even in the complaint (Annexure PI) it has been mentioned that the cheques were presented by the respondent herein for encashment on 12.10.1992; that they were dishonored; that the respondent/complainant received the intimation about the same on 17.11.1992; that the respondent issued a notice on 20.11.1992 to the petitioners herein and that the said notice was returned to the respondent on 2.12.1992 as undelivered. Pointing out these allegations, Learned Counsel for the petitioners contends that since the allegations in the complaint show that the petitioners have not been served with the notice no offence u/s 138 of the Act can be said to have been committed by them in view of the provisions contained in clause (c) of the proviso to Section 138. It is necessary for our purpose to refer to the provisions of Section 138 which are as follows:-

Text of Section 138 omitted. - Ed.

A reading of clauses (b) and (c) of the above said proviso makes it clear that the payee of a cheque is not only to make a demand by giving a notice in writing to the drawer of the cheque within 15 days of the receipt of information by him regarding the return of the cheque as unpaid, but, also that the drawer should fail to make payment of the amount within 15 days of the receipt of the said notice to attract the provisions of Section 138. So, when the very allegation in the complaint is that the notice issued by the respondent/complainant was returned to the respondent on 2.12.1992 as undelivered, it is evidence that the ingredient of clause (c) of the proviso is not fulfilled and, therefore, the provisions of Section 138 of the Act will not apply to the case of the petitioners.

The Learned Counsel for the respondent/complainant, of course, contended that he had given a notice on time, i.e., within 15 days of the intimation from the bank about the dishonour of the cheque but the notice had not been delivered to the petitioners, and that the sending of the notice itself is sufficient. According to him, if the drawer of the cheque purposely evades the notice or refuses to accept the notice, the payee cannot be penalised for the same as he will be helpless in such circumstances. But, the payee is not helpless as the Learned Counsel for the respondent would want to make out. There is always the civil liability which the respondent can enforce by taking an appropriate proceeding. But if the respondent/complainant wants to faster a criminal Liability on the drawer of the cheque as contemplated u/s 138 of the Act then, the respondent/complainant must be able to show that not only clause (b) but also clause (c) of the proviso to Section 138 of the Act have been complied with. Even if there is no compliance of either one of the clauses then Section 138 will not be attracted. It will be pertinent to notice that the conjunction used between clauses (b) and (c) is "and" and not "or". Therefore,'' the respondent-complainant will have to comply with both the clauses, and not merely contend that he has given a notice in writing in time and, therefore, Section 138 of the Act is attracted, despite the fact that the notice has not been served upon the petitioners. It is only when such a notice is served and when the petitioners till fail to make the payment within 15 days, that the criminal liability u/s 138 can be fastened on the petitioners.

The Learned Counsel for the respondent relied upon the decision of the Kerala High Court in Madhu v. Omega Pipes Ltd. 1994 ISJ (Ban) 343. That was a case where the expression "giving notice" found la proviso (b) referred to above came to be interpreted by that Court. In the case which arose for consideration before the Kerala High Court, the complaint was that the cheque issued to the complainant was returned dishonored and the bank intimated the fact to the complainant through a memo, dated 19.5.1993. The complainant sent a notice by registered post to the accused on 21.6.1993 demanding payment, and the notice was received by the accused on 24.6.1993. The learned judge after referring to clause (b) of the proviso to Section 138 of the Act and taking notice of the decision of Hon''ble Supreme Court in Narashimluali v. Singer Growdia, AIR 1966 SC 33, and a Division Bench decision of the Kerala High Court in Govinda Rao v. Addl. Secretary, 1987 (1) KLT 253, interpreted the expression "giving notice". In that context, as meaning that if the payee has dispatched the notice to the correct address of the drawer reasonably ahead of the expiry of 15 days, it can be regarded that he made the demand by giving notice within the statutory period.

The decision relied upon by the Learned Counsel for the respondent is distinguishable from the facts of the present case. The question that arose for determination before the Kerala High Court in the decision relied upon by the respondent is as to what is the meaning of the expression "giving notice". The notice was received by the drawer/accused on 24.6.1993. The question was to what is the crucial date which should be taken note of i.e. whether the date of issuing the notice or whether the date of receipt of notice is relevant for the purpose of clause (b) of the proviso to Section 138 of the Act. There the question was not whether the notice should at all be served or not on the drawer as envisaged by clause (c) of the proviso to Sec. 138 of the Act. Even in the said judgment, the learned Judge has himself taken note of the distinction between the expressions used in clause (c) and clause (b), as can be seen from the following observations made by the learned Judge:-

In the above context, it is useful to know that in clause (c) of the provisos, the drawer of the cheque is given fifteen days'' time from the- date of receipt of the said notice for making payment. This affords clear indication that giving notice in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment.

Therefore, that decision is not applicable in the facts of the case. So, as rightly contended by the Learned Counsel for the petitioners, when the notice as envisaged under clause (c) of the proviso to Section 138 of the Act has not been served upon the petitioners, no criminal liability can be fastened upon them u/s 138 of the Act and, consequently, the complaint, the summoning order and other proceedings have to be quashed.

The Learned Counsel for the petitioner also contended that the complaint which was dismissed on 3.7.1993 for default could not have been taken on file once again by the Learned Magistrate as he had no inherent jurisdiction to do so. He further contended that the order recalling the order dismissing the complaint being entirely without jurisdiction, all subsequent proceedings following upon recalling the said order are also to be treated as a nullity and without any legal effect. In this regard, the Learned Counsel for the petitioner also relied upon the decision in Bindeshwari Prasad Singh Vs. Kali Singh, . He also relied upon the decision in Maj. Genl. A.S. Gauraya and Another Vs. S.N. Thakur and Another, in support of his contention that a complaint which was dismissed for default cannot be restored by the Magistrate as he has no inherent power. The Learned Counsel for respondent relying upon decision in Kuldip Singh v. Harnam Singh and Anr., 1982 CC C 441 (HC) contended that the dismissal for default itself is not proper and the complaint can be restored. But, we are not now concerned with the question whether the Magistrate was right in dismissing the case for default or not but, we are concerned with the question whether he has the power to restore the complaint which was dismissed for default. Admittedly, there is no specific provision for restoring a complaint dismissed for default. There is also no inherent power to do so. Therefore, this decision relied upon by the respondent will be of no help in viewing the decision of the Hon''ble Supreme Court.

Learned Counsel for the respondent also relied upon the decision in K.M. Mathew Vs. State of Kerala and another, and contended that the Magistrate may recall this order, and that no specific provision is necessary. But, this decision related to a case where the accused, who entered appearance in response to the summons, but before recording of evidence, contended that there was no allegation against him in the complaint and requested the Magistrate to drop the proceedings. In those circumstances, it was held that if there is no allegation in the complaint involving the accused in the commission of the crime, it is implied that the Magistrate has no jurisdiction to proceed against the accused, and that the Magistrate may drop proceedings if he is satisfied on the reconsideration of the complaint that there is no offence for which the accused can be tried. It was also held that it is his judicial discretion, and no specific provision is required for the Magistrate to drop the proceedings; and that the order issuing process is an interim order and not a judgment, which can be varied or recalled. But, that is not the case here. The complaint by the respondent has been dismissed by the Magistrate for default. So, this decision relied upon by the respondent also does not help him.

In the result, petition is allowed, quashing the complaint annexure P1 and the summoning order Annexure PS and all other consequential proceedings, if any.