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2008 Supreme(Del) 69
147 (2008) DELHI LAW TIMES 130
DELHI HIGH COURT
Dr. S. Muralidhar, J.
GURUSWARUP SRIVASTAVA – Petitioner
versus
NATIONAL AGRICULTURAL COOP. MARKETING FEDERATION –Respondent
Crl. M.C. 2072 of 2006
Decided on : 23.1.2008
For the Petitioner:Mr. Sunil Gupta, Sr. Advocate with Mr. fatin Zaveri, Advocate.
For the Respondent:Mr. T.K. Ganju, Sr. Advocate with Mr. A.K. Thakur and Mr. RK. Mishra, Advocates.
For one cheque, there can be only one actionable offence committed, and the period of limitation for filing a complaint is calculated from the date of the first demand for payment issued by the complainant to the drawer.
Headnote:
Section 482 - Quashing of Complaint Case - Code of Criminal Procedure, 1973 - Negotiable Instruments Act, 1881 - Section 138 - [NAFED v. M/s. Swarup Group of Industries & Another] - [Section 138, NI Act] - The court discussed the legal provisions of Section 138 of the Negotiable Instruments Act, 1881 and the Proviso to Clause (b) of Section 142, NI Act. The court held that for one cheque, there can be only one actionable offence committed, and the period of limitation for filing a complaint is calculated from the date of the first demand for payment issued by the complainant to the drawer. The court also explained that the complainant must satisfy the Court that there was sufficient cause for not making the complaint within the stipulated period. The court found that the impugned order of the learned MM taking cognizance and issuing summons did not call for interference.
Fact of the Case:
The petitioner, M/s. Swarup Group of Industries, approached NAFED for a strategic alliance for export of iron ore to China and sought funds. NAFED paid a sum of Rs. 2,35,58,41,500 at the petitioner's request. A cheque for Rs. 5 crores issued by the petitioner was dishonoured, leading to a legal notice from NAFED. NAFED filed a complaint under Section 138, NI Act, and the learned MM took cognizance of the complaint and issued summons to the petitioner.
Finding of the Court:
The court found that the legal notice dated 12th December, 2005 constituted a demand for payment in terms of Section 138, NI Act, and the complaint was within limitation. The court also held that the impugned order of the learned MM taking cognizance and issuing summons did not call for interference.
Issues: The material facts were not in dispute, and the questions that arose for consideration were: (a) Whether the letter dated 23rd August, 2005 or the notice dated 12th December, 2005 was the proper legal notice for the purposes of Section 138, NI Act? (b) If the notice dated 12th December, 2005 was the proper legal notice, whether the complaint filed on that basis was still within limitation? (c) If the letter dated 23rd August, 2005 was the proper notice of demand, does the petitioner stand absolved of any offence under Section 138, NI Act? (d) Assuming the complaint was referable to the first dishonour of the cheque, was the complaint barred by limitation and could it be saved by the proviso to Section 142, NI Act? (e) Whether the High Court could condone the delay in NAFED making the complaint within time?
Ratio Decidendi: The court held that for one cheque, there can be only one actionable offence committed, and the period of limitation for filing a complaint is calculated from the date of the first demand for payment issued by the complainant to the drawer. The court also explained that the complainant must satisfy the Court that there was sufficient cause for not making the complaint within the stipulated period.
Final Decision: The petition was dismissed, and the impugned order of the learned MM taking cognizance and issuing summons did not call for interference.
Background Facts
2. The petitioner is the proprietor of M/s. Swarup Group of Industries which carries on the business of import and export, marketing and sale of several goods including iron are. The petitioner approached NAFED in March 2004 with the proposal for a strategic alliance for export of iron are to China, and accordingly sought funds from NAFED. An assurance is stated to have been given by the petitioner that the firm was in a sound financial condition and that the principal along with the interest would be repaid without any default. Consequently a Memorandum of Understanding (MOU) was entered into between the parties on 24th April, 2004.
3. It is stated that the NAFED paid a sum of Rs. 2,35,58,41,500/ - at the request of the petitioner for the purposes of procuring/ exporting iron ore as agreed in the MOU. However, it is alleged that the demands were not honoured and that there were defaults in making repayments. The present complaint pertains to a cheque No. 131050 dated 20th August, 2005 for a sum of Rs. 5 crores which was drawn on Lord Krishna Bank, Noida, UP in favour of the NAFED by the petitioner, towards partial payment of the dues in terms of the MOU.
4. The aforementioned cheque when presented to the bank by NAFED was returned dishonoured with the remarks "payment stopped by drawer". NAFED then wrote following letter dated 23rd August, 2005 to the petitioner:
"This has reference to your fax dated 22.8.2005 on the above subject.
In the above context, it may be informed that cheque No. 131050 dated 20.8.2005 for Rs. 5,00,00,000.00 of Lord Krishna Bank, Noida was deposited in the bank on 20.8.2005 whereas your referred fax was received on 22.8.2005.
The above cheque has been returned unpaid with the remarks payment stopped by drawer. The above cheque was given by you against the long outstanding dues. Instead of making efforts for honouring of the cheque, you preferred to give instructions to the banker for stopping the payment. Reason for the same may be intimated to NAFED. Further, you are aware that dishonouring of cheques is punishable crime under Negotiable Instruments Act. A copy of cheques Return Memo is enclosed.
You are requested to arrange payment of the above cheque and inform NAFED, so that the cheque can be represented, otherwise we will be constrained to initiate legal proceedings under Negotiable Instruments Act.
An early reply is requested."
., 5. It is stated that in reply to this letter on 29th September, 2005, the petitioner wrote to the NAFED asking it not to deposit the cheques without confirmation from the petitioner. On 6th October, 2005, the petitioner wrote the following letter to NAFED:
"Please refer to your letter No. HW/FIN/2005-06 dated 23.8.2005
We invite your kind invitation to our letter dated 20th April and 29th Sept., 2005 wherein we have requested you not to deposit the cheques handed over to you without return confirmation from our office. Besides this, it was also cleared to you that these cheques were to be paid out of proceeds of discounting learned Counsel and written confirmation.
Since the discounting of learned Counsel could not take place, this cheque should be deposited at a later date after getting our written confirmation.
However, we now assure you that this cheque and all your out standings shall possibly be cleared latest by 30.10.2005, at the time of clearan
