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2005 Supreme(Cal) 766
High Court Of Calcutta
P. N. Sinha
SAMARENDRA NATH DAS - Appellant
Versus
SUPRIYO MAITRA - Respondent
C. R. A. 598 Of 2005
Decided On : 12/16/2005
Chandra Kumar Ghosal, Indrauil Basu, JOYMALYA BAGCHI, SUBODH CHANDRA UKIL, SUDIPTO MOITRA
The essential requirements for initiating a proceeding under Section 138 of the NI Act are met when the cheque is dishonored, a demand notice is sent to the accused, and the accused fails to make payment within 15 days of receiving the notice, even if there are alleged violations of other statutes like the Income Tax Act, Indian Contract Act, or Money Lenders Act.
Headnote:
NEGOTIABLE INSTRUMENTS ACT - SECTION 138 - COMPLAINT UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT - ESSENTIAL REQUIREMENTS - INTERPRETATION OF SECTIONS 138 AND 139 - APPLICABILITY OF INCOME TAX ACT, INDIAN CONTRACT ACT, AND MONEY LENDERS ACT - LEGAL FRAMEWORK FOR ISSUING PROCESS AND DISCHARGING ACCUSED.
Fact of the Case:
The petitioner, accused of issuing a dishonored cheque, challenged the cognizance taken by the Magistrate and the issuance of process against him under Section 138 of the Negotiable Instruments Act (NI Act). The petitioner claimed that the cheque was blank and undated when handed over to a third party, Kamal Prasad Basu, and that the complainant, Samarendra Nath Das, who was not known to the petitioner, fraudulently obtained the cheque and inserted an inflated amount of Rs. 7,47,500/- to harass him.
Finding of the Court:
The court held that the complaint under Section 138 of the NI Act was maintainable and that the Magistrate had rightly issued process against the petitioner. The court found that the essential requirements for initiating a proceeding under Section 138 of the NI Act were met, as the cheque was dishonored, a demand notice was sent to the petitioner, and the petitioner failed to make payment within 15 days of receiving the notice.
Issues: 1. Whether the complaint under Section 138 of the NI Act was maintainable despite the petitioner's claim that the cheque was blank and undated when handed over to a third party. 2. Whether the provisions of the Income Tax Act, Indian Contract Act, and Money Lenders Act barred the continuation of the criminal proceeding under Section 138 of the NI Act.
Ratio Decidendi: 1. The court held that the alleged violation of provisions of the Income Tax Act, Indian Contract Act, and Money Lenders Act were not a bar to the continuation of the criminal proceeding under Section 138 of the NI Act, given the materials disclosed in the petition of complaint read with the demand notice. 2. The court relied on the fact that the cheque was dishonored when presented by the complainant for encashment, a demand notice was sent to the petitioner, and the petitioner failed to make payment within 15 days of receiving the notice, fulfilling the initial ingredients for initiating a proceeding under Section 138 of the NI Act.
Final Decision: The court dismissed the petitioner's revisional application, holding that there was no ground to quash the criminal proceeding or set aside the order passed by the Magistrate. The court directed the Magistrate to dispose of the criminal case expeditiously, preferably within 6 months, without granting any undue adjournment to either party.
( 1 ) THIS revisional application is directed against the order dated 18. 7. 03 passed by the learned Chief Judicial Magistrate (in short C JM), Alipore taking cognizance of offence on the basis of complaint filed by the opposite party (in short O. P.) and the orders dated 14. 8. 03 and 20. 11. 04 passed by the learned judicial Magistrate, 1st Court, Alipore issuing process against the petitioner and rejecting the prayer of the petitioner for discharging him in connection with Complaint Case No. C-1808/03 respectively. When the petitioner moved this revisional application in this Court he obtained an interim order of stay of further proceeding of the said complaint case by an order dated 14. 1. 05. The de facto complainant O. P. has filed one application being C. R. A. N. No. 598/05 praying for vacating the interim order dated 14. 1. 05 passed by this Court. I intend to dispose of both the revisional applications being C. R. R No. 175/05 and application being C. R. A. N. No. 598/05 by this common judgment and order.
( 2 ) MR. Subodh Ukil, learned Senior Advocate appearing for the petitioner of the revisional application submitted that the cheque in question bearing No. 143476 drawn on State Bank of India, Taratola Branch was handed over to one kamal Prasad Basu, along with letter heads which he promised to retain only as security and he had transaction with Kamal Prasad Basu for loan. The said cheque though was signed by the petitioner was blank in respect of amount of the cheque and was undated. When the petitioner demanded return of the signed blank cheque and letter heads said Kamal Prasad Basu did not return the cheque and the blank letter heads. The petitioner, thereafter, informed the matter to the Officer-in-Charge, Beniapukur P. S. through written complaint dated 29. 6. 01 explaining the conduct of said Kamal Prasad Basu and also the fact of non-return of the signed blank cheque and letter heads by Kamal Prasad basu to him. There was no money lending or business transaction between petitioner and the O. P. complainant. The petitioner now apprehends that as he lodged the complaint against Kamal Prasad Basu, the said person handed over the cheque to the complainant who on the strength of such cheque inserted inflated amount of Rs. 7,47,500/-only to harass him.
( 3 ) TO the utter shock of petitioner he received the letter dated 18th June, 2003 from the complainant Samarendra Nath Das who is a third party in the form of a
demand notice under section 138b of the Negotiable Instruments Act (in short NI Act), 1881 as amended. Samarendra Nath Das was not at all known to the petitioner and not even by face nor, there was any transaction of any type with the Samarendra Nath Das including any financial transaction. The petitioner gave a reply by letter dated 9. 7. 03 against the demand notice sent by Samarendra Nath Das where he disclosed the entire fact and mentioned that the said cheque was handed over to Kamal Prasad Basu which was blank relating to amount and date and also that there was never any type of transaction with him The said Samarendra Nath Das thereafter lodged the complaint against him under section 138 of the NI Act It is totally a false case that has been instituted against him As a false case has been lodged against him he filed an application before the learned Magistrate for discharging him but the learned Magistrate without considering all aspects and the materials on-record dismissed his application The said order was bad in law and a product of non application of the mind of the learned Magistrate and it should be set aside.
( 4 ) PER contra, Mr Sudipto Moitra learned Advocate appearing for the complainant 0 P submitted that this is a proceeding under section 138 of the ni Act The complainant gave a sum of Rs 5,00,000/- to the accused petitioner for business purpose and the petitioner agreed to pay interest @18% p a until realisation On 29 5 03 the accused handed over a cheque of Rs 7,4
