Sh. Charashni Kumar Talwani vs M/s. Malhotra Poultries

Fateh Deep Singh, J.—A petition, u/s 482 of the Code of Criminal Procedure (for short ""Cr.P.C.""), has been preferred by petitioner

Charashni Kumar Talwani, seeking quashing of criminal complaint filed by respondent M/s. Malhotra Poultries, u/s 138 of the Negotiable

Instruments Act (for short ''the Act''), pending before the learned Judicial Magistrate 1st Class, Panchkula. The brief background as to what has

led to this is that during these proceedings, the petitioner had earlier raised question of territorial jurisdiction of the Court at Panchkula, which

prayer was declined by the learned trial Magistrate. Against this a revision was preferred before the learned Sessions Court, which was accepted

and the matter was remitted back. It is in the light of this, vide order dated 31.10.2011, the present petitioner was summoned in this complaint as

an accused by the learned Judicial Magistrate. Before the learned trial Court, the petitioner submitted that the present complaint was in respect of

dishonour of ten cheques which constitute separate offences and therefore, the accused cannot be tried together. It is argued that under the

provisions of Section 219 Cr.P.C., a person who is accused of offences of the same kind within a period of 12 months can be charged and tried

for offences not exceeding three of them but an accused of ten distinct charges, each cheque disclosing separate offence, cannot be charged in one

complaint. However, this plea of the accused/present petitioner was rejected. The accused was served with the notice of accusation.

It is at this juncture, the petitioner has come up in this petition praying for exercise of inherent powers of this Court for quashing of the complaint.

The learned single Bench of this Court, finding contradictory views over the interpretation of Section 219 and Section 220 Cr.P.C., whereby

offences which formed part of the same transaction could be tried together irrespective of their number and the contrary view to it, has thought it fit

and thus has referred the matter to be decided by a Larger Bench to comprehensively adjudicate on this issue. It is in the light of this, the matter

has come up before us.

Heard learned counsel for the parties at length.

The Act has been legislated way back in the year 1881 with the purpose to regulate mercantile transactions. However, with the passage of time

and evolution of complexities, it was felt necessary to bring about changes for better regulation of the merchanting system. It was with this end in

view, Sections 138 to Section 142 were inserted by ""The Bank, Public Financial Institution and Negotiable Instruments Laws (Amendment) Act,

1988"", w.e.f. 01.04.1989. This is an apt illustration of balanced and pragmatic approach adopted by the Legislature for the economic development

of the Country.

Hon''ble the Supreme Court of India in Kusum Ingots and Alloys Ltd., etc. Vs. Pennar Peterson Securities Ltd. and Others, interpreting the

provisions of Section 138 of the Act, have laid down the essential ingredients of this provision as follows:

(i) a person must have drawn a cheque on an account maintained by him in the bank for payment of a certain amount of money to another person

from out of that account for the discharge of any debt or other liability;

(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity

whichever is earlier;

(iii) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour

the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;

(iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing

to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque unpaid;

(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15

days of the receipt of the said notice.

This was further reiterated in the case of K.R. Indira Vs. Dr. G. Adinarayana, . It needs to be kept in mind that the provisions of Section 138 of

the Act, do not run counter to the basic principles of criminal law that an accused must be presumed to be innocent However, the provisions of

Section 139 of the Act, raises a presumption in the light of certain admitted facts in favour of the holder of the cheque and that the accused is guilty.

The provisions of Section 243 Cr.P.C. and Section 4 of the Indian Evidence Act also have their application during trial of offences under the

provisions of this Act. By virtue of Section 143 of the Act, which has been subsequently inserted by the Negotiable Instruments (Amendment and

Misc. Provisions) Act, 2002, a complaint preferred u/s 138 of the Act is to be tried summarily and thus, the provisions of Section 262 and Section

265 Cr.P.C. govern such a process. The procedure for summary trials has been well laid down in Chapter XXI from Section 260 to Section 265

Cr.P.C. It needs to be clarified here that pendency of criminal complaint u/s 138 of the Act, would not be an impediment to the proceeding with

the civil suits. Therefore the enforcement of the liability through a Civil Court will not disentitle the aggrieved person from prosecuting the offender

for the offence punishable u/s 138 of the Act. Both these remedies can be simultaneously availed of. It needs to be ensured here that the successful

termination of civil litigation does not mean or can be construed that the criminal prosecution under such provision is an abuse of the process of the

Court justifying interference by this Court, under its inherent powers.

The short question that has arisen before us in this reference is the very legality of prosecution of the petitioner u/s 138 of the Act for the

dishonour of the ten cheques which are enumerated as below to lay emphasis:

Cheque No. 362491 dated 23.09.2009 for Rs. 50,000/- of State Bank of India, Paharganj, New Delhi.

Cheque No. 362492 dated 30.09.2009 for Rs. 1,00,000/- of State Bank of India, Paharganj, New Delhi.

Cheque No. 362493 dated 07.10.2009 for Rs. 1,00,000/- of State Bank of India, Paharganj, New Delhi.

Cheque No. 362494 dated 14.10.2009 for Rs. 1,00,000/- of State Bank of India, Paharganj, New Delhi.

Cheque No. 362495 dated 21.10.2009 for Rs. 1,00,000/- of State Bank of India, Paharganj, New Delhi.

Cheque No. 362496 dated 28.10.2009 for Rs. 1,00,000/- of State Bank of India, Paharganj, New Delhi.

Cheque No. 362497 dated 04.11.2009 for Rs. 1,00,000/- of State Bank of India, Paharganj, New Delhi.

Cheque No. 362498 dated 11.11.2009 for Rs. 50,000/- of State Bank of India, Paharganj, New Delhi.

Cheque No. 362499 dated 18.11.2009 for Rs. 1,00,000/- of State Bank of India, Paharganj, New Delhi.

Cheque No. 362500 dated 25.11.2009 for Rs. 1,00,000/- of State Bank of India, Paharganj, New Delhi.

It is undisputed stand of the respondent that it had initially presented cheque bearing No. 362491 dated 23.09.2009 for a sum of Rs. 50,000/-

to its banker for encashment on 24.09.2009, but the same was dishonoured on 26.09.2009 with the memo ""insufficient funds"" of the State Bank of

India, dated 24.09.2009. Complainant claims that it was when it confronted the accused and on his assurance and asking, the complainant had

presented all these cheques together for encashment to its banker on 22.03.2010, which were received back dishonoured with individual memos,

all dated 22.03.2010 bearing endorsement ""payment stopped by drawer"". It is through a consolidated registered AD notice dated 10.04.2010, the

complainant had sought the payment from the accused-petitioner of his amount of the cheques totalling to Rs. 9,50,000/-.

Admittedly, the first cheque presented by the complainant stood dishonoured and subsequently, as has been alleged, the complainant on the

asking of the accused had simultaneously presented all the ten cheques for encashment.

Answering a similar situation, the Hon''ble Supreme Court of India in the case of MSR Leathers Vs. S. Palaniappan and Another, Recent

Apex Judgments (RAJ.) 608 : (2013) 1 SCC 177, has delved deep into the provisions of the Act and has held that the holder of a dishonoured

cheque is not obliged to necessarily file a complaint upon very first dishonour of cheque, while overruling the ratio laid down in Sadanandan

Bhadran Vs. Madhavan Sunil Kumar, , which has laid down that the first default itself must result in filing of prosecution or else results in forfeiture

of right to bring prosecution. It was further held by their Lordships that repeated presentation/dishonour of the cheque gives rise to multiple causes

of action each time and thus has held it permissible that so long as it satisfies all the requirements stipulated in the proviso to Section 138 of the Act,

a complaint therefore, lies. From this, it ensues that so long as the cheque remains valid and unpaid there is a continuing obligation of the drawer to

make good the same. It was further held in the case of K.R. Indira (supra) by the Hon''ble Supreme Court that a consolidated notice which

provides sufficient information envisaged by the statutory provision and there was a sufficient demand for the payment of same covered by the

cheques so dishonoured and the mere fact that it was a consolidated notice, as in the present case, does not invalidates such an act of the

complainant. More so, the legislative intent as is evident from Section 138 of Act is that if for the dishonoured cheque, the payment is not made

within the prescribed days of the receipt of the notice, the drawer is liable for conviction and where the cheque amount is paid within this period or

before the complaint is filed, the legal liability u/s 138 ceases to be operative. However, the fulfilment of the concatenation of the numbers of acts,

so prescribed needs to be fulfilled. A similar view has been taken by the Hon''ble And-hra Pradesh High Court in the case of M. Chandrashekar

Rao Vs. V. Kutamba Rao and Another, where reliance has been placed upon K.R. Indira''s case (supra) to hold that such a consolidated notice is

a valid notice.

Moreover, examining from another angle, as to the filing of separate complaints in respect of each dishonoured cheque, the Hon''ble Apex

Court alarmed over the astronomical rise in cases instituted under the provisions of Section 138 of the Act in the case Damodar S. Prabhu Vs.

Sayed Babalal H., Recent Apex Judgments (R.A.J.) 180 : (2010) 5 SCC 663, has sought to lay guidelines for the Courts below holding that

invariably the provision of a strong criminal remedy has encouraged the institution of large number of cases that are relatable to the offences

contemplated by Section 138 of the Act.

The large number of the cases is choking criminal justice system and has encouraged compounding of the offences even at belated stages. It has

also interpreted that the provisions of the Section 147 of the Act are enabling provisions and that of providing for such compounding of offences

override the provisions of Section 320(9) Cr.P.C. It has been stressed by their Lordships in Damodar S. Prabhu''s case (supra), as under:--

For instance, in the same transaction pertaining to a loan taken on an instalment basis to be repaid in equated monthly instalments, several cheques

are taken which are dated for each monthly instalment and upon the courts which may also have jurisdiction in relation to the complaint. In light of

this submission, we direct that it should be mandatory for the complainant to disclose that no other complaint has been filed in any other court in

respect of the same transaction. Such a disclosure should be made on a sworn affidavit which should accompany the complaint filed u/s 200

Cr.P.C. If it is found that such multiple complaints have been filed, orders for transfer of the complaint to the first court should be given, generally

speaking, by the High Court after imposing heavy costs on the complainant for resorting to such a practice. These directions should be given effect

prospectively.

No doubt, Section 138(c) of the Act prescribes 15 days on the receipt of the notice from the holder for the drawer to make the payment of

the said amount of money and by virtue of Section 142(b), the complaint is to be made within one month of date on which the cause of action u/s

138(c) arises, but with the amendment to Section 142 by Act No. 55 of 2002, proviso has been made that the cognizance of a complaint may be

taken by the Court even after the prescribed period, if the complainant satisfies the Court that he has sufficient cause for not making a complaint

within such period. Therefore, the statute holds a discretion for the Court to waive such a mandatory period.

In Harman Electronics (P) Ltd. and Another Vs. National Panasonic India Ltd., , a fine distinction has been made in making a demand by

giving a notice"" and ""of the receipt of of the said notice and it was laid down that giving notice in the context is not the same as receipt of the notice

and therefore, it was held that on the due receipt of the notice or its knowledge by the drawer after the dishonour of the cheque when the

prescribed period has a lapse, the offence is deemed to have been committed, which position was reiterated in Sivakumar Vs. Natarajan, Recent

Apex Judgments (RAJ.) 120 : (2009) 13 SCC 623 by the Hon''ble Apex Court. Thus, from this, it flows that it was only after a lapse of 15 days

of the receipt of the notice u/s 138(c) of the Act by the accused and on non-payment, the offence u/s 138 of the Act is deemed to have been

committed. Since, in the present case, there is a single consolidated notice for all the ten cheques so dishonoured, so after the period of 15 days of

the receipt of this consolidated notice upon non payment of the amount of these cheques, the offence u/s 138 of the Act is deemed to have taken

place. Thus, it invariably gives rise to a single offence only as it is a single criminal act of omission and conduct of the accused.

In a Single Bench view of this Court which has also been relied upon on behalf of the respondent in the case of Kumar Rubber Industries,

Kapurthala Vs. Sohan Lal it was answered by the learned Court while interpreting the provisions of Section 219 Cr.P.C. that clubbing of a number

of cheques in the complaint cannot be a ground to quash the complaint, further holding the position enunciated in the case of Anita Vs. Anil K.

Mehra and Others, , where reliance was placed upon another Hon''ble Supreme Court view in The State of Andhra Pradesh Vs. Kandimalla

Subbaiah and Another, and judgement of Delhi High Court reported as Stalion Shox Co. (P.) Ltd. and others Vs. Auto Tensions (P.) Ltd., that

where firstly no prejudice has been caused to the accused by such a clubbing and there was one transaction and the dishonoured cheques form

part of the same very transaction, the provisions of Section 219 Cr.P.C. will not be a bar to such a recourse.

The definition ""a transaction"" as crops up is a group of facts connected together as to be referred to be a single name, as a crime, a wrong or

any other subject of enquiry, which may be in issue. The group of facts constituting a transaction are so connected together as to involve certain

ideas viz. unity, continuity and connection. The question whether series of acts are so connected together as to form the same transaction is a

question of fact in each particular case depending upon the proximity of time, place, continuity of action and unity, purpose or design. Therefore, it

is essential to look into such acts whether they are linked together to present a continuous whole. Merely a common purpose may not constitute

same transaction.

Looking from another angle, the Court taking cognizance of the complaint u/s 138 of the Act is required to be satisfied as to whether a prima

facie case is made out under the said provision. Undoubtedly, the drawer of the cheque gets an opportunity u/s 139 of the Act to rebut the

presumption at the trial and therefore, as has been laid down in M/S Modi Cements Limited Vs. Shri Kuchil Kumar Nandi, resorting to the

exercise of the provisions of Section 482 Cr.P.C. in quashing the complaint has deemed it to be highly uncalled for. Similar views were expressed

in the case of Chand Rattan Newar Vs. Shayam Rattan Newar It would be highly too preposterous to invoke the jurisdiction of this Court u/s 482

Cr.P.C. to quash a complaint barely on a single remiss as even at the trial, complainant can exercise his discretion to choose before the trial Court

the cheques on which he would prefer to maintain the complaint even if it is accepted as per the contentions of the counsel for the complainant that

provisions of Section 219 Cr.P.C. hold good in such an eventuality. It has even so laid down by Hon''ble Madras High Court in the case of M/s

Printo Stick and another Vs. M.L. Oswal, . Reliance by learned counsel for the respondent has also been placed on a view of Hon''ble Rajasthan

High Court in the case of Naresh Chander Vs. State of Rajasthan and Another, where it was held otherwise that dishonour of number of cheques

issued for one transaction does not give rise to different causes of action.

Though, it is explicitly clear under the provisions of Section 218(1) Cr.P.C. which provides that for every distinct offence of which any person

is accused, there shall be a separate charge and every such charge shall be tried separately. Section 220(1) Cr.P.C. states that if in one series of

acts so connected together as to form the same transaction, more offences than one are committed by the same person, he may be charged with

and tried at one trial for every such offence. Section 220(1) and Section 223(d) Cr.P.C. constitute an exception to Section 218 as well as Section

219(2) Cr.P.C. Since Section 220 Cr.P.C. is an enabling provision, therefore separate trials in respect of the offence charged are not barred.

However, where series of acts are so connected together forming same transaction, accused can be tried in one case by the Court.

In the light of the fact that in the present situation all the ten cheques have been simultaneously presented to the banker on the same day and

dishonour so effected on the same very day for all the cheques, regarding which a consolidated notice has been issued calling upon the drawer to

make good the payment of these cheques, does not suffer from the vice of joinder of many offences in one trial. It is after the expiry of the period

of the receipt of the notice, prescribed u/s 138(c) of the Act, offence u/s 138 of the Act is deemed to have been committed. Thus by all means, the

facts disclose as constituting only one offence and it cannot be said that ten offences have been committed by the accused and therefore, Section

219 Cr.P.C., does not come into play.

As per the allegations contained in the complaint, the parties have transacted regarding business of eggs, in lieu of which it is claimed that these

cheques have been issued. Though, these cheques may be of different dates and amounts, but the mere act of giving these cheques together have

merged to form the same transaction especially when all the ten cheques have been presented together on a particular day as per the averments of

the complainant at the asking of the drawer coupled with the demand having been raised by the complainant through a consolidated notice giving

rise to the same transaction as all these series of acts are so inter-linked or interconnected together so as to form the same transaction of

dishonouring the cheques on a single day on the presentation of the same as per the request of the drawer.

In the light of the arguments raised, applying the test of continuity of action and commonness of purpose as there is a continuous operation of

acts leading to the same end, the complaint filed cannot be said to be not maintainable.

Learned counsel for the petitioner could not convince this Court how or in what manner any prejudice has been caused to the petitioner by

such alleged joinder of the cheques issued by him. Such complaint will facilitate speedy trial of dishonour of so many cheques, saving precious time

of the Courts by lessening their burden and thereby resulting in speedy dispensation of justice which is hallmark of obligation created by virtue of

Articles 39A, 21 and 14 of the Constitution.

In the light of prologue discussions, we answer the reference to the effect that in the case of dishonour of multiple cheques presented together

for which a consolidated single notice has been issued, tantamounts to commission of a single offence u/s 138 of the Act after the prescribed

period of receipt of the notice on non payment of the amount of the cheques, and, therefore, a single complaint will be maintainable for all these

dishonoured cheques. The matter be sent back to the learned Single Bench for decision of the petition on merits.