S.V. Finance vs Paramasivam

T. Mathivanan, J.—The memorandum of criminal appeal is directed against the judgment dated 27.11.2005, and made in C.C. No. 477 of 2003 on the file of the learned Judicial Magistrate, Kumbakonam, acquitting the accused on the ground that the offence u/s 138 of the Negotiable Instruments Act has not been proved beyond all reasonable doubts. Being aggrieved by the impugned judgment, the complainant has brought this appeal before this Court.

For easy reference, the appellant herein may hereinafter be referred to as the complainant and the respondent herein may hereinafter be referred to as the accused.

The facts and circumstances which giving rise to the memorandum of criminal appeal may be summarised briefly as follows:

3.1. The complainant is a registered firm doing business in finance. The accused had borrowed a sum of RS. 70,000/- on 05.02.2003 and in witnessing thereof, he had executed a demand promissory note in favour of the complainant. In discharging of the said liability, the accused had also issued a cheque (Ex.P2) dated 07.03.2003 drawn on the Kumbakonam Central Cooperative Bank, Aduthurai Branch for the value of Rs. 70,000/-. When the cheque was presented for encashment on 07.03.2003 through his bankers it was bounced back as dishonoured on the ground of "funds insufficient". The memorandum issued by Kumbakonam Central Cooperative Bank was marked as Ex.P3. The advice of the Karur Vysya Bank dated 20.03.2005 was marked as Ex.P4. The memorandum issued by the City Union Bank Limited, Aduthurai Branch, was marked as Ex.P5. Then, the complainant had issued a statutory notice through his Lawyer to the accused on 28.03.2003. The said notice was received by the accused on 02.04.2003, under postal acknowledgement Ex.P7 and issued a reply on 25.04.2003 under Ex.P8. Since the accused had not chosen to repay the amount covered by the cheque (Ex.P2), the complainant was constrained to file the complaint to deal with the accused u/s 138 of the Negotiable Instruments Act.

3.2. After taking cognizance of the offence, necessary charge u/s 138 of the Negotiable Instruments Act was framed. When the ingredients of the charge were explained and questioned, the accused had pleaded innocent and claimed to be tried.

3.3. Then the parties to the complaint went for trial, one Sundaram was examined as P.W.1 and during the course of his examination, Exs.P1 to P11 were marked. When the accused was examined u/s 313 of Cr.P.C. with regard to the incriminating circumstances arising from the evidences of the prosecution, while denying those incriminating circumstances, he wanted to examine witnesses on his part. The accused had examined himself as D.W.3 while the other two witnesses were examined as D.W.1 and D.W.2 respectively. During the course of their examination, Exs.D1 to D11 were marked.

3.4. On appraising the materials and other evidences available on record, the Trial Court viz., the learned Judicial Magistrate, Kumbakonam, had found the accused not guilty and ultimately acquitted from the clutches of charge u/s 138 of the Negotiable Instruments Act. Impugning the judgment, the complainant has approached this Court by way of this appeal.

Insofar as the present appeal is concerned, the following two important questions have to be answered:

(i) Whether the Trial Court has justified its action in allowing the petition in Crl. M.P. No. 6458/03 for condoning the delay of 17 days in filing the complaint u/s 138 of the Negotiable Instruments Act four months after taking cognizance of the offence u/s 138 of Negotiable Instruments Act?

(ii) Whether the cheque in dispute was issued by the accused for the purpose of security in the capacity as a guarantor?

Ground No. (i) Legal Position

It is crystallised from the complaint that the accused had borrowed a sum of Rs. 70,000/- from the complainant on 05.02.2003. When demanded to repay the loan amount, the accused had issued a cheque under Ex.P2 on 07.03.2003 for the value of Rs. 70,000/-. When the cheque was presented for encashment on 07.03.2003, it was bounced back with an endorsement "funds insufficient". The return memo dated 18.03.2003 was marked as Ex.P5. The intimation with regard to the dishonour of cheque given by the complainant by his bankers dated 20.03.2005 was marked as Ex.P4. Then the complainant had issued a statutory notice under Ex.P6 on 28.03.2003 to the accused. The accused had received the said notice on 02.04.2003 under Ex.P7 the postal acknowledgement and subsequently, he had issued a reply under Ex.P8 on 25.04.2003.

It is apparent as evident from Ex.P7, the accused had received the statutory notice under Ex.P6 on 02.04.2003. As envisaged u/s 138(c) of the Negotiable Instruments Act, the drawer i.e. the accused shall make the payment of the said amount covered by the cheque to the complainant within 15 days of the receipt of the said notice i.e. on or before 17.04.2003. In the instant case on hand, admittedly the accused had not paid the amount covered by the cheque within the above said period. Therefore, the cause of action for filing the complaint arises from 18.04.2003.

As contemplated u/s 142(b) such complaint shall be made within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section 138 of the Negotiable Instruments Act. It is obvious to note here that the criminal prosecution has to be launched within one month of the expiry of fifteen days period from the issuance of the notice. This dictum is clearly laid down in Nakoda Laminators v. State of Rajasthan 1998 Crl.L.J. 3525. Therefore, the period prescribed for filing a complaint is a period of limitation within which date it has to be filed. It may be appropriate to note here that the period of limitation can neither be extended u/s 473 Cr.P.C. nor the delay be condoned u/s 5 of the Limitation Act as per the decision held in Shri Vishnu Spinners, Tamilnadu Vs. Sri Bhagyalakshmi Commercial Corporation and another, .

On coming to the instant case on hand, the complaint appears to have been filed on 28.05.2003 which would go to show that the complaint was filed beyond the period of limitation i.e. ten days after the expiry of period of limitation. It also appears that at the time of filing the complaint this fact had not been looked into either by the Ministerial head of the office attached to the learned Judicial Magistrate or by the Magistrate concerned. It also revealed from the records that on 26.09.2003 a petition u/s 5 of the Limitation Act read with 142(b) of the Negotiable Instruments Act was filed seeking condonation of delay of 17 days in filing the complaint. This petition was numbered as Crl. M.P. No. 6458 of 2003. It also appears from the face of this petition that no notice was given to the accused to invite his objection as to whether this petition for condoning the delay could be allowed or not. Simply and mechanically the learned Magistrate had proceeded to pass a single worded order as ''Allowed....

While passing the order, the learned Magistrate had not assigned any valid reason to condone the delay of 10 days after taking cognizance of the offence. In this connection, he would observe in the judgment dated 17.11.2005 at page number 10 that ''the complaint ought to have been filed on or before 17.05.2003. But, it was filed only on 28.05.2003. So, there was a delay of 11 days.

The proviso to Section 142(b) reads as follows:

Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.

He would also observe in page numbers 10 and 11 as follows:

At the time of taking cognizance of the case, the delay in filing the complaint was not brought to the knowledge of the Court and hence the Court had taken cognizance of the case on 02.06.2003 without considering the delay. But, subsequently on 26.09.2003 the complainant filed a petition in Crl. M.P. No. 6458 of 2003 stating that there was a delay of 17 days in filing the complaint and the reason was being the complainant had been suffering from physical illness and he had been taking regular treatment at his village Karaikudi and when he informed his inability to file the complaint in time, the counsel for the complainant referred the book ''Dishonour of Cheque and Criminal Liability'' by C.M. Kothari and told him that the grace time for the accused for making the payment of the cheque amount was amended as 30 days and hence he did not file a petition to condone the delay at that time. Further, he would observe that the Court allowed the petition but no speaking order was there. Anyhow this Court passed an order on the notes paper as follows:

The accused has not so far entered appearance. With a view to rectify the irregularity and with a view to avoid future defence regarding limitation, the petitioner had filed a petition u/s 142 to condone the delay and the same is allowed.'' Since the provision to Section 142(b) has been introduced recently. Decided cases regarding Section 5 of the Limitation Act were referred. In general, ignorance of law cannot be pleaded. But, ignorance of law may constitute ''sufficient cause'' in exceptional cases. Wrong advice of the counsel regarding limitation period in good faith is a sufficient cause for condoning the delay is a settled law. Bona fide mistake of Law might be a sufficient cause within the meaning of Section 5 of the Limitation Act. Hence, with regard to considering the delay, liberal approach should be made.

On thorough scrutiny of the records, the above order alleged to have been passed by the learned Judicial Magistrate in the petition in Crl. M.P. No. 6458 of 2003 has not been found anywhere. Therefore, it appears that the so-called order is false and could have been invented for assigning reasons to rectify the wrong committed by the trial Court.

In the given case on hand as adumbrated supra, the petition under Crl. M.P. No. 6458 of 2003 seeking condonation of delay was filed four months after taking cognizance of the offence u/s 138 of the Negotiable Instruments Act. Section 142(b) of the Act prescribes limitation of one month from the date on which the cause of action arises under Clause (c) of the proviso to Section 138 of the Act. If the complaint is not able to be filed for some obvious reasons within the stipulated period of one month, then the cognizance of a complaint may be taken by the Court even after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period. It shows the intention of the legislators that if the complaint is not able to be filed within the period of one month as stated above, then the complaint may be filed provided the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period. If there is really delay in filing the complaint, the condition precedent as stipulated u/s 142(b) is that the delay must be first condoned after assigning valid reasons for the satisfaction of the Court. Unless and until the delay is condoned the cognizance of a complaint cannot be taken.

As discussed in the foregoing paragraphs, the period prescribed for filing complaint is a period of limitation within which date it has to be filed and can neither be extended u/s 473 of Cr.P.C. nor the delay be condoned u/s 5 of the Limitation Act as observed in Shri Vishnu Spinners, Tamilnadu Vs. Sri Bhagyalakshmi Commercial Corporation and another, .

As rightly observed by His Lordship the Hon�ble Thiru Justice K.T. Thomas while writing the judgment on behalf of a Division Bench of Supreme Court in State of M.P. and Another Vs. Pradeep Kumar and Another, ''As the aphorism ''to err is human'' is more a practical notion of human behaviour than an abstract philosophy, the unintentional lapse on the part of a litigant should not normally cause the doors of the judicature permanently closed before him. The effort of the court should not be one of finding means to pull down the shutters of adjudicatory jurisdiction before a party who seeks justice, on account of any mistake committed by him, but to see whether it is possible to entertain his grievance if it is genuine.''

On the footing of the above observation, this Court has thought it fit to seek the assistance of Section 460 of Cr.P.C. to see as to whether the irregularities committed by the trial Court could be cured. The scope and application of Section 460 Cr.P.C. cures nine kinds of irregularities viz., Sub-clause (a) to (i) provided they are caused erroneously in good faith. Further, the qualification is implied though it is not expressly stated in the Section viz., they should not occasion failure of justice. The section deals with acts done by a Magistrate in any way empower by law to do those acts; it has no reference to a Magistrate empowered otherwise under the Act to do an act but not possessing jurisdiction over the offence.

Section 460(e) reads as follows:

If any Magistrate not empowered by law to do any of the following things namely,

(e) to take cognizance of an offence under Clause (a) or (b) of Sub-section (1) of Section 190.

Chapter XIV of Code of Criminal Procedure envisages condition requisite for initiation of proceedings. A Court can take cognizance of an offence only when conditions requisite for initiation of proceedings before it has set out in this chapter which fulfil; otherwise the Court does not obtain jurisdiction to try the offence.

Section 190 sub Clause (1) contemplates about cognizance of offences by Magistrates Section 190(1) reads as follows:

Subject to the provisions of this Chapter, any Magistrate of the First Class, and any Magistrate of the Second Class specially empowered in this behalf under Sub-section (2), may take cognizance of any offence;

a) upon receiving a complaint of facts which constitute such offence;

b) upon a police report of such facts;

c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.

Sub-clause (a) to Section 190(1) clearly states that a Magistrate of the First Class can take cognizance of an offence upon receiving a complaint of facts which constituted such offence.

Section 142 of the Negotiable Instruments Act reads as follows:

Cognizance of offence.

Notwithstanding anything contained in the Code of Criminal Procedure, 1973(2 of 1974), -

(a) No Court shall take cognizance of any offence punishable u/s 138 except upon a complaint, in writing made by the payee or, as the case may be, the holder in due course of the cheque;

Sub-clause (c) of the Section 142 reads as follows:

No Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable u/s 138. Therefore, it is made clear under Sub-clause (c)to Section 142 that a metropolitan magistrate or a judicial magistrate of first class are competent to take cognizance of the offence punishable u/s 138 of the Negotiable Instruments Act.

For making this complaint a condition is stipulated in Sub-clause (b) to Section 142 which reads as follows:

Such complaint is made within one months of the date on which the cause of action arises under Clause (c) of the proviso to Section 138.

Therefore, it is made clear that the complaint shall be made within one month of the date on which the cause of action arises. It is also made clear that even after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period, a complaint to try an offence punishable u/s 138 can be made. Therefore, the condition precedent to make the complaint u/s 138 is the period of one month on which date the cause of action arises. It is pertinent to note here that the proviso to Section 142(b) of the Act has been characterised as substantive one and not a procedural, and hence, the complaint, which is filed beyond the period of limitation could not have been entertained. More so, the complainant could not have been allowed to file a petition for condoning the delay that too four months after taking cognizance of the offence by the learned Judicial Magistrate.

On coming to the instant case on hand obviously the complaint was not made within the stipulated period of one month. It was made ten days after the expiry of the period of limitation. But, still there is no bar to make the complaint provided a petition to condone the delay is filed assigning valid reason as envisaged u/s 142(b) of the Act. But, nothing is followed in this case. It appears that the learned Judicial Magistrate has committed a gross error which cannot be cured because the act of the Magistrate has not been done with good faith.

Ground No. (ii) Factual Position

As per the case of the complainant, Ex.P2 cheque in dispute was issued by the accused on 07.03.2003 for discharging the loan of Rs. 70,000/- said to have been borrowed by the accused from the complainant. One Sundaram, who is the Manager of the complainant�s firm, was examined as P.W.1. In his evidence, in cross he would state that besides the loan which is in dispute, the accused had been stood as a guarantor for one Pandian. He has also stated that the signature of the accused was obtained only in the demand promissory note and no cheque was obtained from him. Further, he would state in his cross-examination that the complainant�s firm had been maintaining documents for having advanced the loan to the accused but no such documents were produced to show that the accused had borrowed the loan much less Rs. 70,000/-. Even though, he had stated that he could produce the registers, he had not evinced any interest to produce it. Further, he would state in his cross-examination that excepting the cheque which is in dispute in this case, no cheque was issued by the accused in favour of the complainant�s firm. He has also made it clear that excepting the cheque in Ex.P2 no other cheque issued by the accused was presented before the bank for encashment. He would go one step further and state that the complainant�s firm was not in possession of any other cheque issued by the accused.

The case of the accused is that he had stood as a guarantor for the loan obtained by his friend one Pandian who has been examined herein as D.W.2. The accused had totally denied the borrowal of Rs. 70,000/- and he would state in his evidence that he had not issued any cheque as contended by the complainant�s firm. The accused himself had examined as D.W.3. In his evidence, the accused has stated that his friend D.W.2 Pandian had borrowed a sum of Rs. 60,000/- from the complainant�s firm and for that he stood as a guarantor and as such, he had issued two blank cheques and one blank demand promissory note. He would state further that the loan amount borrowed by his friend Pandian (D.W.2) was repaid and even after that the documents given by him (Accused) were not returned back. On behalf of the accused 11 documents were marked. Ex.D1 is the letter dated 03.05.2002 addressed to the accused, in which it is stated that with regard to the loan obtained by his friend Pandian, the accused had stood as guarantor and since the said Pandian (D.W.2) had not paid three instalments the complainant was at liberty to recover that amount from the accused as he stood as a guarantor to his friend Pandian. Therefore, he was put under a notice that if the amount was not paid, legal action would be initiated. Ex.D5 is the details of hire purchase agreement entered into by D.W.2 Pandian with the complainant�s firm in which it appears that the accused had signed as a guarantor. It has been admitted by the accused as well as D.W.2 Pandian that Ex.D6 was the final notice issued to D.W.2 Pandian by the complainant�s firm in which it is stated that as on 31.12.2002 there was a balance of Rs. 70,390/- which includes the principal amount of Rs. 60,000/- with interest of Rs. 12,600/- for 12 months.

When Ex.D5 was confronted with P.W.1, he had admitted that the letter was sent by their firm to the accused. He had also admitted that Exs.D1 to D4 were sent to the accused by the complainant�s firm. On coming to the evidence of D.W.1 Branch Manager of Kumbakonam Central Cooperative Bank, Aduthurai Branch, he would state that the cheque bearing No. 519069 for the value of Rs. 24,000/- drawn on the account maintained in the name of Paramasivam came for encashment before their bank since ''sufficient amount'' was not available in the account it was returned on 06.09.2002. In this connection, the learned Counsel appearing for the accused would argue that P.W.1 in his cross examination had stated that excepting the cheque under Ex.P2 no other cheque was obtained from the accused. The complainant�s firm was not in possession of any other cheque besides the cheque under Ex.P2. In this connection, he would submit that when P.W.1 had subsequently denied that no other cheque was obtained from the accused excepting the cheque in dispute under Ex.P2, the cheque bearing No.519069 could not have been obtained from the accused and presented before the Kumbakonam Central Cooperative Bank, Aduthurai Branch for encashment. Therefore, he would submit that the accused had issued the cheque in dispute in blank as a guarantor for the loan obtained by D.W.2 Pandian and he had never issued a cheque for the purpose of discharging loan of Rs. 70,000/- which was said to have been obtained by him from the complainant�s firm.

On appreciation of the evidences both oral and documentary and on considering the submissions of both sides, this Court is of a firm view that the judgment of acquittal passed by the Trial Court does not require any interference.

Further, the learned Counsel appearing for the complainant, in order to substantiate his argument has placed reliance upon a decision reported in I.C.D.S. Ltd. Vs. Beena Shabeer and Another, . He would submit further that even if it is presumed that the accused had stood as a guarantor for D.W.2 for the loan obtained by him, his liability is coextensive along with the liability of principal debtor viz., D.W.2.

This piece of argument submitted by the learned Counsel for the complainant is not able to be accepted because the contention of the complainant is that the accused had borrowed a sum of Rs. 70,000/- on 05.02.2003 and he never stated in his complaint that the accused had stood as a guarantor and issued the above said cheque as security and as such the accused cannot be punished for the dishonour of cheque. It is not open for the complainant to modulate the contention to suit his convenience.

In the result, the criminal appeal is dismissed. The impugned judgment of acquittal passed by the trial Court is confirmed.