Please reconsider your opinion after giving a fresh look on following decisions:
Ist decision:
(2) Recently, Hon'ble Supreme Court in Union of India & Others Vs S.K. Kapoor {(2011) 4 SCC 589; Decided on 16.03.2011} held as follows (SCC Pp 591, para 9) :
“9.…………..It is well settled that if a subsequent co-ordinate bench of equal strength wants to take a different view, it can only refer the matter to a larger bench, otherwise the PRIOR DECISION OF A CO-ORDINATE BENCH IS BINDING ON THE SUBSEQUENT BENCH OF EQUAL STRENGTH. Since, the decision in S.N. Narula's case (S.N.Narula vs. Union of India & Others, Civil Appeal No.642 of 2004 decided on 30th January, 2004 {Order Cited now vide (2011) 4 SCC 591} was not noticed in T.V. Patel's case {(2007) 4 SCC 785}, the latter decision is a judgment per incuriam. The decision in S.N. Narula's case (supra) was binding on the subsequent bench of equal strength and hence, IT COULD NOT TAKE A CONTRARY VIEW, as is settled by a series of judgments of this Court.”
IInd decision:
29. We are of opinion that a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be binding, it is not necessary that it should be a decision rendered by the Full Court or a Constitution Bench of the Court. We would, however, like to think that for the purpose of imparting certainty and endowing due authority decisions of this Court in the future should be rendered by Division Benches of at least three Judges unless, for compelling reasons that is not conveniently possible.
MANU/SC/0619/1989
Equivalent Citation: AIR1989SC1933, [1989]66CompCas466(SC), [1989]178ITR548(SC), JT1989(2)SC427, 1989(2)KLT168(SC), 1989(1)SCALE1337, (1989)2SCC754, [1989]3SCR316, [1989]74STC313(SC)
IN THE SUPREME COURT OF INDIA
Civil Appeal Nos. 2839-40 of 1989 (From the Judgment and Order dated 6-12-1984 of the Delhi High Court in R.F.A. Nos. 113 and 114 of 1968), 834 and 835 of 1986, 4404 of 1985, 6667-6685 of 1983, Review Petition No. 671 of 1985 (in C.A. No. 1965 of 1984) and Writ Petition Nos. 204-06 of 1984 and 12832 of 1985
Decided On:16.05.1989
Appellants:Union of India (UOI) and Anr.
Vs.
Respondent:Raghubir Singh (Dead) by Lrs. Etc.
Hon'ble Judges:
R.S. Pathak, C.J., E.S. Venkataramiah, Ranganath Misra, S. Natarajan and Sabyasachi Mukharji, JJ.
IIIrd decision:
16. We see great force in the above submission because once the cheque is issued by the drawer a presumption under Section 139 must follow and merely because the drawee issues a notice to the drawee or to the Bank for stoppage of the payment it will not preclude an action under Section 138 of the Act by the draw or the holder of a cheque in due course. The object of CHAPTER XVII, which is intituled as "OF PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNTS" and contains Sections 138 to 142, is to promote the efficacy of banking operations and to ensure credibility in transacting business through cheques. It is for this reason we are of the considered view that the observations of this Court in Electronics Trade & Technology Development Corporation Ltd., Secunderabad (supra) in paragraph 6 to the effect "Suppose after the cheque is issued to the payee or to the holder in due course and before it is presented for encashment, notice is issued to him not to present the same for encashment and yet the payee or holder in due course presents the cheque to the bank for payment and when it is returned on instructions. Section 138 does not get attracted", does not fit in with the object and purpose for which the above chapter has been brought on the Statute Book.
18. The aforesaid propositions in both these reported judgments, in our considered view, with great respect are contrary to the spirit and object of Sections 138 and 139 of the Act. If we are to accept this proposition it will make Section 138 a dead letter, for, by giving instructions to the Bank to stop payment immediately after issuing a cheque against a debt or liability the drawer can easily get rid of the penal consequences notwithstanding the fact that a deemed offence was committed. Further the following observations in para 6 in Electronics Trade & Technology Development Corporation Ltd., Secunderabad (supra). "..........Section 138 of the Act intended to prevent dishonesty on the part of the drawer of negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a bank and induce the payee or holder in due course to act upon it. Section 138 draws presumption that one commits the offence if he issues the cheque dishonestly" in our opinion, do not also lay down the law correctly.
MANU/SC/0171/1998
IN THE SUPREME COURT OF INDIA
Crl. A. Nos. 244-46 of 1998 (in SLP (Crl.) Nos. 680-682/97)
Decided On: 02.03.1998
Appellants: M/S Modi Cements Limited
Vs.
Respondent: Shri Kuchil Kumar Nandi
Hon'ble Judges:M.K. Mukherjee, S.P. Kurdukar and K.T. Thomas, JJ.
Subject: Commercial
Catch Words:
Agreement, Consideration, Intention, Interpretation, Limited Company, Negotiable Instrument, Presumption, Prima Facie
Acts/Rules/Orders:Negotiable Instruments Act, 1881 -- Sections 138, 139 and 142; Criminal Procedure Code, 1963 -- Section 482
IVth Decision:
9. Chapter XVII has five sections, which are as follows:
"138. Dishonour of cheques for insufficiency, etc., of funds in the account. -
15. Justice G.P. Singh on Principles of Statutory Interpretation (Fifth Edition), 1992, has stated, at pages 82 and 83, as follows:
"The rule which is also known as 'purposive construction' or 'mischief rule', enables consideration of four matters in construing an Act: (1) what was the law before the making of the Act, (ii) what was the mischief or defect for which the law did not provide, (iii) what is the remedy that the Act has provided, and (iv) what is the reason of the remedy'. The rule then directs that the courts must adopt that construction which 'shall suppress the mischief and advance the remedy'. The rule was explained in Bengal Immunity Co. v. State of Bihar, MANU/SC/0083/1955 : [1955]2SCR603 , by S.R. Das C.J. as follows:
'It is a sound rule of construction of a statute firmly established in England as far back as 1584 when Heydon's case [1584] 3 Co Rep. 7a, 7b, 76 ER 637 was decided that for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered:
1st - What was the common law before the making of the Act,
2nd - What was the mischief and defect for which the common law did not provide.
3rd - What remedy Parliament hath resolved and appointed to cure the disease of the commonwealth, and
4th - The true reason of the remedy;
and then the office of all the judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and pro privato commodo and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bono publico'."
21. Apart from any one of the 21 reasons catalogued above, that is usually given by bank in the case of return of a cheque unpaid there may be a myriad of reasons, depending upon the contingency and exigency of the situation. Insufficiency of funds in the accounts may be a situation, which may be created either innocently or unknowingly by the drawer or may be a product of mischievous gimmicks, like "closure of account", countermanding the payment, etc., or even a situation wherein the bank dishonours the cheque since it has already instituted a suit against the drawer to recover the debt against his account. Further, insufficiency of funds may be indicated by various direct and indirect endorsements by the dishonouring bank, such as "insufficiency of funds", "refer to drawer", "funds expected, present again", "effects not cleared", etc. There may even be a Situation rather created in a mischievous or malicious fashion to see that the cheque issued by the drawer stands returned by the banker unpaid by subscripttion of the signature in such a way as not to tally with the specimen signature, just to purchase time to meet the demands made knowing fully well that on the date when the cheque had been drawn, there was insufficiency of funds in his account. For the outside world, it may appear that the reason for the return of the cheque unpaid, was the existence of suspicion as regards the genuineness of the cheque issued by the drawer. But the real reason is altogether different in such a situation. The drawer in a fraudulent way does the mischief of subscribing has signature totally in a different fashion to create a doubt as to the genuineness of the cheque so issued by him. He does it with a purpose, which is rather obvious. Such a trickery device could be adopted to stall the situation of not being in a position to meet the demand, in the sense of not having adequacy of funds in the account of the drawer, and by adoption of such a device, the payee had really been hoodwinked. Manifold situations may be created by a fraudulent drawer using all sorts of ingenuity to make it appear that the reason for the return of the cheque unpaid, was neither of the two contingencies contemplated by section 138 of the Act although in the real state of affairs, the reason for the return of the cheque unpaid was either of the two contingencies contemplated therein alone. We are, therefore, of the firm view that the reasons as given by the bank for the return of the cheque may not at all reflect the reality of the situation relatable to the sufficiency or otherwise of the funds in the accounts of the drawer or whethers it exceeds the amount arranged to be paid by the drawer by agreement with the bank.
22. Once a cheque is dishonoured, whatever be the reason therefor, it behoves upon the payee or the holder in due course to issue a notice in writing to the drawer of the cheque within 15 days from the date of such return intimating, as has been provided under the sanguine provisions adumbrated under clauses (b) and (c) to the proviso to section 138 of the Act, the factum of such return and requiring him to comply with the demand within 15 days from the date of receipt of the said notice and the demand so made, if not complied with, gives rise to a cause of action for the launching of the prosecution against such drawer and the cause of action so enured, lasts for a period of one month, enabling the aggrieved payee or holder in due course to file a complaint before the competent criminal court. The existence of such factors thus prima facie constitutes an offence under section 138 of the Act, requiring the case to be taken cognizance of by the competent court, before which the complaint had been filed. Cognizance of a complaint is capable of being taken by a competent court, provided the necessary and requisite averments constituting the offence complained of are made available in the complaint and nothing further, excepting the taking of a sworn statement from the complainant.
23. In the case of prosecution for an offence under section 138 of the Act, a moot question very often raised before courts is, as to whether averments regarding sufficiency or otherwise of funds in the account of the drawer, were to be made in the complaint. Divergent views emerge on such a question from various High Court, to which we have already adverted. The rationale or reasoning for the view that there should be specific averments in the complaint as to the insufficiency of funds before ever the case is taken cognizance of, we rather feel, is not reflecting the real import, purport or the intendment of section 138 of the Act. We have already adverted to as to what is necessary and requisite for a complaint to be taken cognizance of, in respect of an alleged offence under section 138 of the Act, i.e., the factum of dishonour of the cheque, whatever be the reason, which was issued in discharge of a debt or other liability in whole or in part, after its presentation within its period of validity of six months from the date of issue, whichever is earlier, coupled with the non-compliance with the drawer of the demand made upon him and the institution of prosecution within one month from such non-compliance. Such being the case, the non-mentioning in the complaint by way of a specific averments made therein as to the insufficiency of funds in the account of the drawer, is of no consequence and the question whether there was sufficiency of funds or not in the account of the drawer on the date when the cheque had been drawn, will be relevant only during the stage of trial and such a question is capable of being decided, with ease and grace, by the court on the adduction of evidence by utilising the salient provisions adumbrated under the provisions of the Bankers' Books Evidence Act, 1891. Once it is proved in the trial that bouncing of a cheque was due to lack of balance in the account of the drawer on the date when the cheque was drawn, then it goes without saying that the act of giving a cheque resulting in the bouncing of the cheque due to lack of balance in the account was an "absolute offence" even if it was done without any "criminal intent", inasmuch as no mens rea has been prescribed for the commission of such an offence: The non-prescripttion of any mens rea therein is rather obvious. The monetary blood flow in the arteries of trade and business heart cannot be permitted to be calcified by the dishonouring of the cheque by debtors. In this view of the matter, we are of the view that there is no necessity at all to make any specific averment in the complaint as to the insufficiency of funds in the account of the drawer on the date when the cheque was drawn, before ever such a complaint is taken cognizance of by a competent court.
24. In view of what has been stated above, we answer the two questions posed, as below:
(i) It shall be competent for a Magistrate to take cognizance of a private complaint, when the return by the bank of the cheque bears an endorsement of any of the contingencies or eventualities other than the ones mentioned in section 138 of the Negotiable Instruments Act.
(ii) Invoking the inherent power under section 482 of the Code of Criminal Procedure, is not permissible to put an end to the prosecution, merely because the averments in the complaint as relatable to insufficiency of funds, are not specifically mentioned, especially when the details as to the factum of dishonour of a cheque, whatever be its reason, issued in discharge of a debt or other liability, in whole or in part, after its presentation within its period of validity or six months from the date of such issue, whichever is earlier, coupled with the non-compliance with the drawer of the demand made on him and the institution of the prosecution within one month from such non-compliance, are all specifically mentioned in the complaint, as that alone will constitute the factors making out a prima facie case of an alleged offence under section 138 of the Act to be taken cognizance of by the competent court.
MANU/TN/0074/1994
Equivalent Citation: [1995]83CompCas853(Mad)
IN THE HIGH COURT OF MADRAS
Criminal Original Petition No. 7002 of 1992
Decided On: 19.10.1994
Appellants: J. Veeraraghavan
Vs.
Respondent: Lalith Kumar
Hon'ble Judge:
Janarthanam and Thangamani, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: S. Venkatesan, Adv.
For Respondents/Defendant: A. Packiaraj, Adv.
Subject: Company
Acts/Rules/Orders:
Negotiable Instruments Act, 1881 - Section 138
