INTRODUCTION:
The present blog will cover whether a magistrate can take cognizance of a complaint under section 138 of the Negotiable Instrument Act filed before the completion of 15 days from the date of receipt of the demand notice. Sections 138 to 147 of the NI Act were bought into the statute by the amendment in 1988 present blog concerning section 138 and section 142 of the NI Act.
WHAT IS A COMPLAINT?
The term complaint has been defined under section 2(d) of Criminal Procedure Code 1973.
Section 2 (d) a “complaint means any allegation made orally or in writing to a Magistrate, with a view to his taking action under this Code, that some person, whether known or unknown, has committed an offence, but does not include a police report.”
PROCEDURE: (15 days rule):
Section 138 of NI Act permits the payee to file a complaint under section 138 of NI Act in case of dishonor of cheque or cheque bounce case. However, the same complaint is to be filed after completion of the period prescribed under the statute. After presenting a cheque before bank within the period of 6 months and receiving a return memo from the bank, the payee has to send a demand notice to the drawer of the cheque within 30 days from the date of receiving such return memo from the bank as stated in section 138 (b) of NI Act.
When a notice is served payee has to wait for 15 days for any response from the drawer to the said notice as envisaged under section 138(c) of NI Act, only thereafter 15 days a payee is permitted by the law to file a complaint before a magistrate under section 142 of NI Act.
POWER OF COURT TO TAKE COGNIZANCE:
Section 142 of the Act allow magistrate to take cognizance only when a complaint is filed within the due course of cheque. Section 142 (1) of NI Act is as under:
142. Cognizance of offences— (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), —
(a) no court shall take cognizance of any offence punishable under section 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;
(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138:.......
What is cognizance of offence?
The term cognizance means to become aware; a judicial officer has to take notice of an offence before he proceeds with the trial of the case. The power of the magistrate to take the cognizance of the offence has been defined under section 190 of Crpc as under:
190.Cognizance of offences by Magistrates. — (1) 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……….
SECTION 142(b) PROVISO AMENDMENT: Section 142 (b) was amended in 2002 and proviso was added as under to give power to courts to take cognizance on a complaint which is filed under section 138 of NI Act beyond the prescribed period.
[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;]
Now on considering aforementioned sections 138 and 142 of NI Act the issue is whether a magistrate can take the cognizance on a complaint under Section 138 of NI Act filed before completion of 15 days from date of receipt of demand notice?
NARSINGH DAS TAPADIA VS. GOVERDHAN DAS PARTANI (2000) 7 SCC 183:
A division bench of apex court considered proviso of section 138 and 142 of NI Act moreover considered the expression “taking cognizance of an offence”. Court opined that the presentation of complaint under section 138 of NI Act before the accrual of cause of action does not render it not maintainable if cognizance had been taken by the magistrate after expiry of 15 days of period of notice.
SARAV INVESTMENT & FINANCIAL CONSULTANCY (P) LTD. LLYODS REGISTER OF SHIPPING INDIAN OFFICE STAFF PROVIDENT FUND (2007) 14 SCC 753:
The aforesaid legal position was not considered further by division bench in Sarav Investment (supra) though in the said case court did not mention Narsingh Das (supra). Court observed service of notice in terms of section 138 (b) that section 138 of NI Act was a part of cause of action for lodging a complaint and communication to the accused about the fact of dishonoring of cheques was calling upon him to pay the amount within 15 days was imperative in character. Court further opined that in a case where a compliant has been filed before completion of 15 days is a premature complaint, and the same is liable to be quashed and not maintainable in the eyes of law.
YOGENDRA PRATAP SINGH V. SAVITRI PANDEY, (2014) 10 SCC 713:
In the said case a bench of three judges considered the scrutinized the finding of both the aforesaid judgment and in para 30 of this judgment court viewed that
……The offence under Section 138 is made effective only on fulfilment of the eventualities contained in clauses (a), (b) and (c) of the proviso. For completion of an offence under Section 138 of the NI Act not only the satisfaction of the ingredients of offence set out in the main part of the provision is necessary but it is also imperative that all the three eventualities mentioned in clauses (a), (b) and (c) of the proviso are satisfied. Mere issuance of a cheque and dishonour thereof would not constitute an offence by itself under Section 138……
In para 36 of the aforesaid judgment court elaborated clearly interpretation on conjoint reading of section 138 and 142 of NI Act as under:
36. …….A conjoint reading of Section 138, which defines as to when and under what circumstances an offence can be said to have been committed, with Section 142(b) of the NI Act, that reiterates the position of the point of time when the cause of action has arisen, leaves no manner of doubt that no offence can be said to have been committed unless and until the period of 15 days, ………….a court is barred in law from taking cognizance of such complaint. It is not open to the court to take cognizance of such a complaint merely because on the date of consideration or taking cognizance thereof a period of 15 days from the date on which the notice has been served on the drawer/accused has elapsed………… If the period prescribed in clause (c) of the proviso to Section 138 has not expired, there is no commission of an offence nor accrual of cause of action for filing of complaint under Section 138 of the NI Act.
REMEDY on dismissal of complaint:
In a case where a complaint has been dismissed under section 138 for the reason that time of 15 after serving of demand notice is not complete and complaint has been filed before that, it could be inferred that there is no cause of action accrued. In the second issue court in the aforesaid judgment observed that in a case where compliant has been dismissed due to reason stated in the first issue, they may file a fresh complaint. Moreover, in a case where no time that is 30 days as provided under section 142(b) is left to file fresh complaint, in such situation recourse is to seek benefit of the proviso thereby satisfying the court of the sufficient cause for delay in filing complaint.
CONCLUSION:
Three judges bench in Yogendra Pratap Singh (supra) overruled Narsingh Das (supra) and upheld Sarav Investment (supra) therefore it could be inferred that any complaint filed before completion of 15 days as prescribed under section 138 (c) is not maintainable and further remedy is to file a fresh complaint within the time prescribed under section 142(b) and in a case where no time left as specified under section 142(b) recourse is the proviso which was added with amendment as aforesaid thereby specify reason for delay in filing complaint.