DEVI TYRES, BANGALORE Vs. NAWAB JAN

JUDGEMENT

(1.) The facts and the dates relating to this case are characteristic of the tactics adopted before the Trial Courts in order to frustrate and defeat the provisions -of Sec. 138 of the Negotiable Instruments Act, 1881. The statement of objects and reasons makes it crystal clear that the Legislature engrafted Sections 138 to 142 of the Negotiable Instruments Act into the statute by Act 66 of 1988 which became effective from 1-4-1989. A clear reading of these provisions will indicate that the legislative intent was in order to put a full and complete stop to the dishonest practice of issuance of cheques which are subsequently dishonoured. Under most of the legal systems prevalent in different parts of the world the issuance of such a cheque which is subsequently dishonoured is not only a criminal offence but has very serious repercussions with regard to the creditworthiness and even the capacity to maintain a bank account. In India, unfortunately, cheques were being indiscriminately issued which were dishonoured with impunity and the poor victim was left with no option except to pay a heavy Court fee and file a summary suit, thereby adding injury to insult. Then came stage 2 wherein all sorts of involved and dishonest defences were pleaded and the contention was raised that triable issues arise as a result of which the proceeding was transferred to the list of contested suits and if the proceeding was ultimately disposed of during the lifetime of the plaintiff, it was considered merciful. There was a serious fall-out on the economic repercussions but more importantly, on the aspect of business integrity and it was for this reason that the Act was amended and Sec. 138 was introduced. The Courts have defined this section as a "no nonsense provision" and the scheme of the law is that the Criminal Court is required to do only a summnary investigation and if it is disclosed that the cheque was issued, it was dishonoured and the accused has failed to make payment within the stipulated period pursuant to a notice of demand, a conviction is inevitable. Unfortunately, the Criminal Courts have permitted themselves to be drawn into all sorts of specious debates as a result of which these proceedings have got elongated on the same lines as happens to civil suits. The present case is illustrative of what is happening before the Criminal Courts.

(2.) On 4-11-1991, the plaintiff who deals in tyres filed a complaint against the accused who is alleged to have purchased tyres from him, and issued a cheque against part-payment for a sum of Rs. 16,250.00 which cheque was dishonoured and the accused had not made the payment as demanded despite a registered acknowledgement due notice served on him within the prescribed period of time. The case was numbered as CC. No. 21331 of 1991. The plea was recorded on 3-8-1993 and the evidence of the complainant was recorded on 18-3-1994. The accused statement was recorded on 13-4-1994 and by judgment dated 16-6-1994 the Court convicted the accused and sentenced him to undergo simple imprisonment for six months and to pay a fine of Rs. 32,500.00 in default, simple imprisonment for three months. It is necessary to observe here that the face value of the cheque was Rs. 16,250.00 and the Trial Court imposed a fine which was equivalent to twice the amount of the cheque. I need to clarify here that there is a specific purpose behind this provision having been incorporated in the section insofar as the Legislature took cognizance of the fact that there would be a certain time-lag between the filing of the complaint and its disposal and it was very clear that the Legislature took note of the fact that the complainant who is the aggrieved party would have lost by way of interest and furthermore, that the complainant would have also incurred considerable costs both of which required to be off-set which was why, the Court was permitted to impose a fine equivalent to twice the face value of the cheque. For further Dictation on 14-3-2000 M.F. Saldanha, J., 14-3-2000

(3.) The respondent-accused filed Criminal Appeal No. 88 of 1994 before the Court of sessions. It is unnecessary for me to deal with the contents of the rather lengthy order which has been passed by the Sessions Court but suffice it to say that the appeal came to be disposed of through a final order on 13-9-1994 and the appeal Court has effectively set aside the order of the Trial Court principally on the ground that this is a case in which the cheque was originally issued on 1-6-1991 and was subsequently revalidated on three occasions and furthermore, that the cheque in question was for an amount of Rs. 16,250.00 whereas the complainant has contended that the outstandings to him was of the order of Rs. 18,500.00. The Court came to the conclusion that the order of conviction against the accused was unjustified. Strangely enough, the Court has not addressed itself to the all important question namely, the fact that there is no dispute about the cheque having been issued by the accused, the fact that the face value of the cheque namely Rs. 16,250.00 has not been paid up despite the dishonour and a notice calling upon the accused to pay up the amount and as often happens, the appeal Court was swayed by several arguments that were obliterating the main issue namely, the undisputed liability and in the process, overlooked the basics. The present appeal has been directed against the order of the Sessions Court dated 13-9-1994.