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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. KARPAGAVINAYAGAM
P.V. VS. R.S. Manikumar, Petitioner - Appellant
Versus
Krishna Reddy - Respondents
Cri.O.P. No. 21900 of 1998 and Cri.M.P. Nos. 10577 of 1998 and 339 of 1999
Decided On : 11 February 1999
NEGOTIABLE INSTRUMENTS ACT - SECTION 138 - QUASHING OF PROCEEDINGS - GROUNDS - DEMAND NOTICE - TIME FOR PAYMENT - EXISTENCE OF LIABILITY - CONDUCT OF COUNSEL - SUPPRESSION OF FACTS - ABUSE OF COURT PROCESS - ETHICS OF ADVOCACY - CONTEMPT OF COURT. 1. The demand notice under Section 138 of the Negotiable Instruments Act can include both the cheque amount and interest up to the date of payment. The notice need not specify a time period for payment, as the complainant gets the right to approach the Court only after fifteen days from the date of receipt of the notice. 2. The existence of liability is a factual question and must be established by evidence. A mere allegation in the complaint and notice is not sufficient. 3. The conduct of counsel in suppressing facts and misleading the Court is highly reprehensible and amounts to an abuse of the Court's process. Such conduct is contemptuous and may result in disciplinary action against the counsel. 4. Advocates have a duty to the Court, their clients, and society to conduct themselves with integrity and honesty. They should not engage in any act that may undermine the administration of justice or bring the legal profession into disrepute.
Fact of the Case:
The petitioner, accused of issuing dishonored cheques, filed a petition to quash the proceedings against him on various grounds, including the validity of the demand notice and the existence of liability. The counsel for the petitioner engaged in misleading the Court by suppressing facts and not informing the trial court and the Sessions Court about a stay order granted by the High Court. The complainant filed a petition to vacate the stay order and bring the misleading conduct of the petitioner and his counsel to the Court's attention.
Finding of the Court:
The Court found that the grounds raised by the petitioner for quashing the proceedings were without merit. The demand notice was valid as it included both the cheque amount and interest and did not specify a time period for payment. The existence of liability was a factual question that needed to be established by evidence, which was not provided in the complaint or notice. The conduct of the petitioner and his counsel in misleading the Court was highly reprehensible and amounted to an abuse of the Court's process.
Issues: 1. Whether the demand notice under Section 138 of the Negotiable Instruments Act can include both the cheque amount and interest up to the date of payment. 2. Whether the notice must specify a time period for payment. 3. Whether the existence of liability is a factual question that must be established by evidence. 4. Whether the conduct of counsel in suppressing facts and misleading the Court is contemptuous and may result in disciplinary action.
Ratio Decidendi: 1. The Court held that the demand notice under Section 138 of the Negotiable Instruments Act can include both the cheque amount and interest up to the date of payment. This is because the complainant is entitled to initiate both a civil suit for recovery of the amount and criminal proceedings for non-payment of the cheque amount. The demand notice need not specify a time period for payment, as the complainant gets the right to approach the Court only after fifteen days from the date of receipt of the notice. 2. The Court held that the existence of liability is a factual question and must be established by evidence. A mere allegation in the complaint and notice is not sufficient. 3. The Court held that the conduct of counsel in suppressing facts and misleading the Court is highly reprehensible and amounts to an abuse of the Court's process. Such conduct is contemptuous and may result in disciplinary action against the counsel.
Final Decision: The Court dismissed the petition to quash the proceedings and directed the trial court to continue the trial. The petitioner was directed to cooperate with the trial by appearing before the Court regularly to enable the Court to dispose of the matter in accordance with law at an early date.
This is a peculiar case wherein both the petitioner/accused and the counsel for the accused are accused of suppression of facts as well as misleading of the Metropolitan Magistrate Court, the Sessions Court and this court.
2. This factual matrix, which are quite interesting and equally disturbing, are given below :-
(a) P. V. R. S. Manikumar, the petitioner herein, is the accused in C.C. No. 3316 of 1998 on the file of the VII Metropolitan Magistrate, George Town, Chennai on a private complaint filed by Krishna Reddy, the respondent herein, for the offence under S. 138 of the Negotiable Instruments Act.
(b) According to the complaint, the accused gave two cheques dated 15-12-1997 and 31-3-1998 for Rs. 6,50,000/- and Rs. 7,25,920/- respectively. The first cheque was towards the principal and the second cheque was towards the interest as reckoned up to 31-3-98. These cheques were presented on 31-3-98 and the same were dishonored on 2-4-98. On 6-4-98, the complainant sent a statutory notice demanding the cheque amount, to the petitioner/accused.
(c) After receipt of the said notice on 17-4-98, the petitioner sent a reply without making any payment of the cheque amount. Then on 21-4-1998, the complainant sent a rejoinder and even then, no payment was made. Therefore, within the time limit prescribed under the Act, the complainant filed the said private complaint on 4-5-1998.
(d) The trial commenced on 27-8-98 on which date the chief examination of the complainant was completed and he was subjected to cross-examination on 13-10-98, 3-11-98 and 4-11-98 by the counsel for the petitioner/accused.
(e) On 4-11-98, after completion of the cross-examination of the complainant, the counsel for the petitioner filed a petition in Crl. M.P. No. 9805 of 1998 under S. 245(2), Cr.P.C. for discharge. Though already trial had commenced and the examination of P.W. 1 was over, the trial Court entertained the said petition for discharge and permitted the complainant to file a counter. The counsel for the parties were heard by the trial Court. Ultimately, the said application was dismissed on 18-11-98.
(f) Thereafter, P.Ws. 2 and 3, the officials of the bank, were examined on 25-11-1998 and the prosecution side was closed. Thereafter, the case was posted on 10-12-98 for questioning the accused under S. 313, Cr.P.C.
(g) On 24-11-98, the petitioner/accused filed a Revision before the Sessions Court in Crl.R.C. No. 213/98 challenging the order dated 18-11-1998 dismissing the discharge petition. Though this was admitted by the learned Sessions Judge, no stay was granted and the matter was posted on 17-12-98.
(h) On coming to know about the pendency of the Revision before the Sessions Court, the complainant filed a petition before the Sessions Court on 30-11-98 to advance the hearing of Crl.R.C. No. 213/98 from 17-12-98 to an earlier date. In that, notice was ordered returnable by 9-12-98.
(i) In the meantime, on 8-12-98, the petitioner/accused filed the present petition for quashing before this Court and obtained an order of stay of the proceedings of the trial Court on the same day.
(j) When the Revision was posted on 9-12-98 for fixing an earlier hearing date, the counsel for the petitioner/accused appeared before the Sessions Court and requested time for filing counter. However, the Sessions Court was not informed about the stay order dated 8-12-98 granted by the High Court. The Sessions Court by giving time for counter posted the matter on 17-12-98.
(k) On 10-12-98, when the matter came up for questioning before the trial Court, at the request of the counsel for the petitioner, this matter was adjourned to 22-1-99. On this date also, the trial Court was not informed about the stay order dated 8-12-98 granted by this Court.
(l) On 17-12-98, the Revision before the Sessions Court came up for final disposal. However, it was adjourned to 21-12-98. On that date also, the Sessions Court was not informed about the stay granted by the High Court.
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