Kody Elcot Ltd. vs Down Town Hospital

Arunachalam, J.—The petitioner who filed a private complaint against the respondent before the Judicial Magistrate, Saiapet, Madras is a

limited company carrying on trade at Thiruvanmiyur with in the local jurisdiction of the aforementioned Magistrate.

The petitioner filed the complaints against the respondent for an alleged offence u/s 138 of the Negotiable Instruments Act, 1881, read with

section 142 of the said Act as modified by Act 66 of 1988. The allegations made in the complaint were that the respondent placed an order with

the petitioner for supply of ultra sound scanner XL model with attachments. In pursuance of the order, the petitioner despatched the goods to the

respondent on July 30, 1988. After the installation of the scanner, a part payment towards its cost was made by the respondent. Towards the

balance amount due, the respondent sent to the petitioner a cheque dated December 2, 1988, drawn on United Commercial Bank, Guwahati, for

Rs. 1,00,000. The petitioner presented this cheque to the Bank of India at Madras on May 20, 1989. The cheque was returned by the petitioner''s

banker with an endorsement ""exceed arrangements"". The petitioner, thereafter on June 5,1989, sent a registered notice to the respondent stating

that the deliberate issue of cheque founds was an offence punishable u/s 138 of the Negotiable Instruments Act and that the respondent should

arrange to clear the dues. The said notice was received on June 16,1989, by the respondent who had, by a letter dated June 17,1989,

acknowledged the said receipt. Thereafter, the petitioner preferred the private complaint on July 12, 1989.

The Trial Magistrate returned the complaint to the petitioner holding that the facts mentioned in the complaint did not constitute an offence for

taking cognizance. In the course of his reasoning, the Trial Magistrate has observed that, at the time of issuing the cheque involved in this

case,section 138 and 142 of the Act were not in force and they were in force and they were brought in to the statue book with effect only from

April 1, 1989. In the view of the Magistrate, retrospective operation could not be given to those section so as to attach a new disability in respect

of past transactions since the fundamental rule of English law was that no state shall be construction to have retrospective operation unless such a

construction appeared clearly or would or would aries by necessary and distinct implication.

Challenging the return of the complaint by the Judicial Magistrate, Saidapet as not in consonance with law, this petition has been filed under

section, 482,Criminal Procedure Code, to set aside the order, with a further direction to the Magistrate to dispose of the complaint in accordance

with law.

Mr. R. Subramania Aiyar, learned counsel for the petitioner contended that the Magistrate had erred in interpreting the provisions of section 138

and 142(b) of the Negotiable Instrument Act, as amended by Act. He also urged that the date of issue of the cheque was immaterial and all that

was required by the law was that it should have been dishonoured after April 1, 1989, when the provision of the Act become operative.

Since the complaint was returned even before taking it on file, the respondent had not come into the picture and, in law is not entitled to any

notice at this stage. However, I heard Mr. R. Shanmughasundaram, the learned Additional Public Prosecutor, in respect of all the contentions put

forth by learned counsel for the petitioner. The Additional Public Prosecutor represented that the date of issue of the cheque cannot be material

circumstance since it would be current for six month and if the cheques was returned by the bank for the reasons contemplated under the Act, the

offence would be complete .

I have carefully considered the submission made by both learned counsel. It is better to extract section 138 and 142 of the Act. ""138.Dishonour

of the cheque for insufficiency, etc., of funds in the account-Where any cheque drawn by person on an account managed by him with a blanket for

payment of any amount of money to another person from out of that account for the charges, in whole or in part of any debt or either liability is

returned by the bank unpaid, either because the amount of money standing to the credit of that accounts is insufficient to honour the cheque or it

exceed the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed

an offence and shall, without prejudice to any other provisions of this Act, be punished with fine which may extend to twice the amount the cheque

or with both:

Provided that noting contained in this section shall apply unless-

(a)the cheque has been presented to the bank within a period of 6 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 the money by

giving a notice in writing to the drawer of the cheque with in 15 days of receipt of information by him from the bank regarding the return of the

cheque as unpaid; and

(c)the drawer of such cheque fails to make the payment of said amount of money to the payee or as the case may be to the holder in due course of

the cheque within 15 days of receipt of the said notice.

Explanation-For the purpose of this section, debt or other liability'' means a legally enforceable debt or other liability.