SIL Import, USA v. Exim Aides Silk Exporters, (SC) BS33657
SUPREME COURT OF INDIA

Before:- K.T. Thomas and M.B. Shah, JJ.

Criminal Appeal No. 488 of 1999 (Arising out of SLP (Crl.) No. 717 of 1999). D/d. 3.5.1999.

SIL Import, USA - Appellant

Versus

Exim Aides Silk Exporters - Respondent

For the Appellant :- Dhruv Mehta, S.K. Mehta, Mr. F. Anam and Ms. Shobha, Advocates.

For the Respondent :- Mr. Krishnamurthi Swami and Mr. G.R. Mohan, Advocates.

A. Negotiable Instrument Act, Section 138, proviso (b) and (c) - Notice - Dishonour of cheque - Notice transmitted to Drawer by Fax is valid - The only requirement is that notice should be in writing - There is no requirement that notice must be sent by registered post or through messenger.

[Paras 12, 13 and 17]

B. Negotiable Instruments Act, Sections 138 and 142 - Limitation - Cause of action - Dishonour of cheque - Notice sent to Drawer of cheque by fax on 11.6.1996 - Same notice sent through registered post which was received by the Drawer on 25.6.1996 - Notice sent by fax is valid - Limitation would start when notice sent by fax was received by the Drawer.

[Paras 12, 13, 17 and 24]

C. Negotiable Instruments Act, Sections 138 and 142 - Dishonour of cheque - Fifteen days notice in writing has to be sent to Drawer - There is no requirement that notice must be sent through Registered post.

[Para 12]

Cases Referred :-

State v. S.J. Chaudhary, 1996(2) SCC 428.

Sadanandan Bhadran v. Madhavan Sunil Kumar, 1998 (6) SCC 514.

M/s. SKD Lakshmanan Fireworks Industries v. K.V. Sivaram Krishnan, 1995 Crl. Law Journal 1384.

JUDGMENT

K.T. Thomas, J. - Leave granted.

2. A fax message sent by the respondent for his own safeguard has now boomeranged. Neither can he disown sending the fax message nor can he own its full implication. Thus he is forked in a catch-22-situation. Such a situation arose in a criminal proceeding which respondent launched against appellant for the offence under Section 138 of the Negotiable Instruments Act (for short 'the Act').

3. How the above situation is reached can be summarised thus :

4. On receipt of such intimation respondent sent a notice to the appellant company by fax on 11.6.1996. On the next day the respondent sent the same notice by registered post also which was served on the appellant on 25.6.1996. On 8.8.1996 respondent filed a complaint before the Additional Chief Metropolitan Magistrate, Bangalore in respect of cheque No. 188 dated 20.11.1995 (for 5998.40 US dollars) and another cheque No. 187 (with which the present appeal is not concerned). The Metropolitan Magistrate, after receiving the complaint on file took cognizance of the offence and issued process to the appellant. It was sought to be quashed for which the appellant filed a petition before the Magistrate on various grounds. Learned Magistrate upheld some of the grounds urged by the appellant and dismissed the complaint discharging the accused by his order dated 20.11.1996.

5. Respondent thereupon moved the High Court of Karnataka in revision against the aforesaid order of discharge. A single Judge of the High Court allowed the revision petition and set aside the order of the Metropolitan Magistrate and restored the complaint on file with a direction to proceed with the prosecution in respect of cheque No. 188. It is the said order of the High Court which is now being challenged. The only point canvassed by the appellant, in this appeal, was that the Magistrate has no jurisdiction to take cognizance of the offence after the expiry of 30 days from the date of cause of action and in this case when respondent filed a complaint on 8.8.1996, the aforesaid period of 30 days stood expired much earlier. The said plea was based on the fact situation that respondent sent the notice by fax on 11.6.1996 receipt of which has been owned by the appellant in full measure. If the notice sent by fax is to be treated as the notice in writing contemplated in the Section, the cause of action should have arisen on the expiry of 15 days therefrom (i.e. 26.6.1996) and the period of limitation for filing the complaint expired on 26.7.1996, according to the appellant. As the complaint was filed long after that date the Magistrate has no jurisdiction to take cognizance of the offence, contended learned counsel.

Section 142 of the Act reads thus :

6. The language used in the above Section admits of no doubt that the magistrate is forbidden from taking cognizance of the offence if the complaint was not filed within one month of the date on which the cause of action arose. Completion of the offence is the immediate forerunner of rising of cause of action. In other words cause of action would arise soon after completion of the offence, and the period of limitation for filing the complaint would simultaneously start running.

7. To circumvent the above hurdle, respondent submitted that 15 days can be counted only from 25.6.1996 the date when appellant received the notice sent by registered post, and the cause of action would have arisen only on 11.7.1996. The complaint which was filed on 8.8.1996 is therefore within time, according to the learned counsel for the respondent.

8. The above controversy could have been averted if respondent had filed the complaint on any day between 11th and 26th of July, 1996, because any date during that interregnum would have been good either when the fax message is treated as the notice or when the registered notice is treated as the required intimation. Hence, on the facts of the case, the real point in controversy is, when did the cause of action arise ? A decision on the said point is vitally crucial for further continuance of the criminal proceeding, as law has imposed an interdict on the court against taking cognizance of the offence after the expiry of 30 days counted from the date of arising of cause of action.

9. Learned Single Judge has adopted the following reasoning for concluding that the cause of action had arisen on the expiry of 15 days from 25.6.1996 :

10. The sum and substance of the said reasoning appear to be that cause of action would arise only on the expiry of 15 days from the date which the complaint knows to be the date of service of notice.

11. The requirement for sending a notice after the cheque is returned by the Bank unpaid is set out in clauses (b) and (c) of the proviso to Section 138 of the Act. They read thus :

12. The duty cast on the payee on receipt of information regarding the return of the cheque unpaid is mentioned in clause (b) of Section 138. Within 15 days he has to make a demand for payment. The mode of making such demand is also prescribed in the clause, that it should be "by giving notice in writing to the drawer of the cheque". Nowhere it is said that such notice must be sent by registered port or that it should be despatched through a messenger.

13. Chapter XVII of the Act, containing Sections 138 to 142, was inserted in the Act as per Banking Public Financial Institution and Negotiable Instruments Laws (Amendment) Act, 1968. When the legislature contemplated that notice in writing should be given to the drawer of the cheque, the legislature must be presumed to have been aware of the modern devices and equipment already in vogue and also in store for future. It the court were to interpret the words "giving notice in writing" in the section as restricted to the customary mode of sending notice through postal service or even by personal delivery, the interpretative process would fail to cope up with the change of time.

14. Facsimile (or fax) is a way of sending hand-written or printed or typed materials as well as pictures by wire or radio. In the West such mode of transmission came to wide use even way back in the late 1930s. By 1954 International News Service began to use Facsimile quite extensively. Technological advancement like Facsimile, Internet, E-mail etc. were on swift progress even before the Bill for the Amendment Act was discussed by the Parliament. So when Parliament contemplated notice in writing to be given we cannot overlook the fact that Parliament was aware of modern devices and equipment already in vogue.

15. Francis Bennion in "Statutory Interpretation" has stressed the need to interpret a statute by giving "allowances for any relevant changes that have occurred, since the Act's passing, in law, social conditions, technology, the meaning of words, and other matters."

16. For the need to update legislations, the Courts have the duty to use interpretative process to the fullest extent permissible by the enactment. The following passage at page 167 of the above book has been quoted with approval by a three Judge-Bench of this Court in State v. S.J. Chaudhary, 1996(2) SCC 428 :

17. So if the notice envisaged in clause (b) of the proviso to Section 138 was transmitted by fax it would be compliance with the legal requirement.

18. The High Court's view is that the sender of the notice must know the date when it was received by the sender, for otherwise he would not be in a position to count the period in order to ascertain the date when cause of action has arisen. The fallacy of the above reasoning is that it erases the starting date of the period of 15 days envisaged in clause (c). As per the said clause the starting date is the date of "the receipt of the said notice". Once it starts, the offence is completed on the failure to pay the amount within 15 days therefrom. Cause of action would arise if the offence is committed.

19. If a different interpretation is given the absolute interdict incorporated in Section 142 of the Act that, no court shall take cognizance of any offence unless the complaint is made within one month of the date on which the cause of action arises, would become otiose.

20. In this context the decision of a two-Judge Bench in Sadanandan Bhadran v. Madhavan Sunil Kumar, 1998 (6) SCC 514 can be referred to. A payee did not file the complaint within 45 days of sending the notice after the cheque was bounced back, but he presented the cheque once again thereafter and issued another notice. When a new cause of action arose on the strength of the second presentation of the cheque a complaint was filed by the payee on the strength of that second presentation of the cheque. This Court has stated the law in that case as follows :

21. Learned Judges proceeded further to consider whether in a case where notice in writing was sent after the first dishonour of the cheque, the payee can once again present the cheque, get it dishonoured for the purpose of filing the complaint. Following statement of law has been clearly adumbrated by this Court in paragraph 7 thereof :

22. The above view of this Court is in direct conflict with the view expressed by the Full Bench of the Kerala High Court in M/s. SKD Lakshmanan Fireworks Industries v. K.V. Sivaram Krishnan, 1995 Crl. Law Journal 1384. (In the headnote made in a volume of Supreme Court Cases which reported Sandanandan Bhadran (1998 (6) SCC 514) the Editor has noted thus : SKD Lakshmanan Fireworks Industries v. K.V. Sivarama Krishnan, 1995 Crl. Law Journal 1384 Ker. FB is approved. This needs correction through a corrigendum because the dictum of the Full Bench in SKD Lakshmanan Fireworks Industries v. Sivaram Krishnan has been disapproved by this Court in Sadanandan Bhadran's case).

23. The upshot of the discussion is, on the date when the notice sent by Fax reached the drawer of the cheque the period of 15 days (within which he has to make the payment) has started running and on the expiry of that period the offence is completed unless the amount has been paid in the meanwhile. If no complaint was filed within one month therefrom the payee would stand forbidden from launching a prosecution thereafter, due to the clear interdict contained in Section 142 of the Act.

24. In this case the complainant has admitted the fact that written notice was sent by fax. Appellant has admitted its receipt on the same date. (It must be remembered that respondent has no case that fax has not reached the appellant on the same date). The last day when the respondent could have filed the complaint was 26.7.1996. But the complaint was filed only on 8.8.1996. So the court has no jurisdiction to take cognizance of the offence on the said complaint.

25. In the result, we allow this appeal and set aside the impugned judgment in so far as it relates to cheque No. 188. The complaint filed by the respondent on the said cheque will stand dismissed.

Appeal allowed.