DALMIA CEMENT LTD Vs. GALAXY TRADES AND AGENCIES

JUDGEMENT

(1.) The complaint filed under S.138 of the Negotiable Instruments Act, 1881 (hereinafter called "the Act") was quashed by the High Court vide the judgment impugned in this appeal holding that the same was barred by time as the complainant had allegedly failed to file it within the statutory period from the date of accruing of the cause of action.

(2.) In order to appreciate the legal submissions, a resume of facts of the case is necessary. In its complaint, the appellant company had stated that Accused Nos. 2 to 9 who are partners of respondent firm purchased cement from it and issued cheque for Rs. 9,13,353.84 on 26th May, 1998 which was drawn on Karur Vysa Bank Ltd., Ernakulam Branch. When presented for collection, the cheque was dishonoured on account of insufficiency of funds in the accounts of the accused. The information regarding non payment of the cheque amount was communicated by the Bank to the complainant on 2.6.1998. The complainant on 13.6.1998, through its Advocate, issued a statutory notice in terms of S.138 of the Act intimating respondents 1 and 2 regarding the dishonour of the cheque and calling upon the respondents to pay the said amount within a period of 15 days from the receipt of the said notice. The postal acknowledgement receipt of the notice, served upon the respondents, was received by the complainant on 15.6.1998. However, the respondents 1 and 2, vide their letter dated 20th June 1998, which was received by the Advocates of the appellant on 30th June 1998, intimated that they had in effect received empty envelopes without any contents and requested the appellant to mail the contents. It is worth noticing that by the time the complainant received the intimation of the respondents, the statuary period of filing complaint was about to expire. Believing the averments of the respondents to be true, though not admitting but as an abundant caution the appellant presented the cheque again on 1.7.1998 to the drawee bank through their bankers. The cheque was again dishonoured by the drawee bank on 2.7.1998. A registered statutory notice was issued to the accused intimating the dishonour of the cheque and the payment was demanded. The accused received the said notice on 27.7.1998 but did not make the payment. According to the complainant, the accused on 6.7.1998 sent a registered cover to its Ernakulam Office which contained some waste newspaper bits. As despite dishonour of the cheque and receipt of notice, the cheque amount was not paid, the appellant filed the complaint on 9th September, 1998, admittedly, within the statutory period from the second notice. The Additional Chief Judicial Magistrate, Ernakulam took the cognizance and issued process to the respondents. Instead of appearing before the Magistrate, the respondents filed a petition under S.482 of the Code of Criminal Procedure in the High Court praying for quashing the complaint on the ground that the same was barred by limitation which was disposed of vide the judgment impugned in this appeal.

(3.) The Act was enacted and S.138 thereof incorporated with a specified object of making a special provision by incorporating a strict liability so far as the cheque, a negotiable instrument, is concerned. The law relating to negotiable instrument is the law of commercial world legislated to facilitate the activities in trade and commerce making provision of giving sanctity to the instrument of credit which could be deemed to be convertible into money and easily passable from one person to another. In the absence of such instruments, including a cheque, the trade and commerce activities, in the present day would, are likely to be adversely affected as it is impracticable for the trading community to carry on with it the bulk of the currency in force. The negotiable instruments are in fact the instruments of credit being convertible on account of legality of being negotiated and are easily passable from one hand to another. To achieve the objectives of the Act, the legislature has, in its wisdom, thought it proper to make such provisions in the Act for conferring such privileges to the mercantile instruments contemplated under it and provide special penalties and procedure in case the obligations under the instruments are not discharged. The laws relating to the Act are, therefore, required to be interpreted in the light of the objects intended to be achieved by it despite there being deviations from the general law and the procedure provided for the redressal of the grievances to the litigants. Efforts to defeat the objectives of law by resorting to innovative measures and methods are to be discovered, lest it may affect the commercial and mercantile activities in a smooth and healthy manner, ultimately affecting the economy of the country.