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PETITIONER: M/S. SIL IMPORT, USA

       Vs.

RESPONDENT: M/S. EXIM AIDES SILK EXPORTERS, BANGALORE

DATE OF JUDGMENT:       03/05/1999

BENCH: M.B.Shah, K.T.Thomas

JUDGMENT:

THOMAS, J.

       Leave granted.

     A  fax  message  sent by the respondent  for  his  own safeguard  has  now  boomeranged.   Neither  can  he  disown sending the fax message nor can he own its full implication. Thus he is forked in a catch-22-situation.  Such a situation arose  in  a criminal proceeding which  respondent  launched against  appellant for the offence under Section 138 of  the Negotiable Instruments Act (for short the Act).

     How  the above situation is reached can be  summarised thus:

     Respondent  is a proprietary concern doing business in finished   silk  products  by   exporting  them  to  foreign countries.   Appellant is a company having its  Headquarters in California (USA).  Appellant has been placing orders with the respondent for exporting such silk materials.  According to  the  respondent,  appellant  owed a sum  of  72075  U.S. dollars (equivalent to more than 26 lakhs of rupees) towards the  sale consideration of several consignments of materials despatched  to  the appellant on the orders  placed.   After much  correspondence  and   negotiations  appellant  company issued  some  post  dated  cheques on State  Bank  of  India (California   ARTESIA Branch).  Three of such cheques  were presented on 3-5-1996 after those cheques attained maturity, for  encashment  through Bank of Madurai, Bangalore  Branch. Two  cheques  were returned dishonoured with the reason  no sufficient funds.

     On receipt of such intimation respondent sent a notice to  the appellant company by fax on 11-6-1996.  On the  next day  the respondent sent the same notice by registered  post also  which  was served on the appellant on  25-6-1996.   On 8-8-1996  respondent filed a complaint before the Additional Chief  Metropolitan  Magistrate,  Bangalore  in  respect  of cheque  No.188 dated 20-11-1995 (for 5998.40 US dollars) and another  cheque No.187 (with which the present appeal is not concerned).   The  Metropolitan Magistrate, after  receiving the  complaint  on file took cognizance of the  offence  and issued  process  to  the  appellant.  It was  sought  to  be quashed  for which the appellant filed a petition before the

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magistrate  on  various grounds.  Learned magistrate  upheld some of the grounds urged by the appellant and dismissed the complaint  discharging  the accused by his order  dated  20- 11-1996.

     Respondent thereupon moved the High Court of Karnataka in  revision  against the aforesaid order of  discharge.   A single judge of the High Court allowed the revision petition and  set aside the order of the Metropolitan Magistrate  and restored  the complaint on file with a direction to  proceed with the prosecution in respect of cheque No.188.  It is the said  order of the High Court which is now being challenged. The  only point convassed by the appellant, in this  appeal, was  that  the  magistrate  has   no  jurisdiction  to  take cognizance  of the offence after the expiry of 30 days  from the date of cause of action and in this case when respondent filed  a  complaint on 8-8-1996, the aforesaid period of  30 days stood expired much earlier.  The said plea was based on the fact situation that respondent sent the notice by fax on 11-6-1996  receipt of which has been owned by the  appellant in full measure.  If the notice sent by fax is to be treated as  the  notice in writing contemplated in the Section,  the cause  of action should have arisen on the expiry of 15 days therefrom (i.e.  26-6-1996) and the period of limitation for filing  the complaint expired on 26-7-1996, according to the appellant.   As the complaint was filed long after that date the magistrate has no jurisdiction to take cognizance of the offence, contended learned counsel.

     Section  142 of the Act reads thus:  142.  Cognizance of offences:- Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),

     (a)  no  court  shall take cognizance of  any  offence punishable  under  section 138 except upon a  complaint,  in writing,  made  by  the payee or, as the case  may  be,  the holder in due course of the cheque;

     (b)  such  complaint is made within one month  of  the date on which the cause of action arises under clause (c) of the proviso to section 138;

     (c)  no  court  inferior  to that  of  a  Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under Section 138.

     The  language  used in the above Section admits of  no doubt   that  the  magistrate  is  forbidden   from   taking cognizance  of  the offence if the complaint was  not  filed within  one  month of the date on which the cause of  action arose.    Completion  of  the   offence  is  the   immediate forerunner  of  rising of cause of action.  In  other  words cause  of  action would arise soon after completion  of  the offence,  and  the  period  of  limitation  for  filing  the complaint would simultaneously start running.

     To  circumvent the above hurdle, respondent  submitted that  15  days can be counted only from 25-6-1996  the  date when  appellant received the notice sent by registered post, and the cause of action would have arisen only on 11-7-1996. The  complaint  which  was filed on  8-8-1996  is  therefore within  time,  according  to  the learned  counsel  for  the respondent.

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     The  above  controversy  could have  been  averted  if respondent  had filed the complaint on any day between  11th and  26th  of  July,  1996, because  any  date  during  that interregnum would have been good either when the fax message is  treated  as the notice or when the registered notice  is treated  as the required intimation.  Hence, on the facts of the  case,  the real point in controversy is, when  did  the cause  of  action  arise?  A decision on the said  point  is vitally  crucial  for  further continuance of  the  criminal proceeding,  as  law has imposed an interdict on  the  court against taking cognizance of the offence after the expiry of 30 days counted from the date of arising of cause of action.

     Learned  single  judge  has   adopted  the   following reasoning for concluding that the cause of action had arisen on the expiry of 15 days from 25-6-1996:

     This     is     a       situation     whereby     the petitioner/complainant  had  placed himself within  the  two horns  of  a bull and it was not possible for him  to  avoid strike  to  one or the other.  To put it otherwise,  if  the complainant  had  lodged the complaint under the  assumption that  the fax message was received by him, the accused would have  contended that he had not received the fax message and therefore,  the  complaint  filed  on the  basis  of  it  is premature,  as  there  is  nothing for  the  complainant  to establish that the same was served on him.  To be on a safer side,  he  has waited for the acknowledgement of the  notice sent  to  him and filed it within 45 days from the  date  of receipt of the acknowledgement.

     The sum and substance of the said reasoning appears to be that cause of action would arise only on the expiry of 15 days  from  the date which the complainant knows to  be  the date of service of notice.

     The  requirement for sending a notice after the cheque is returned by the Bank unpaid is set out in clauses (b) and (c)  of  the proviso to Section 138 of the Act.   They  read thus:

     Provided that nothing contained in this section shall apply unless:-

     (b)  the  payee  or the holder in due  course  of  the cheque,  as the case may be, makes a demand for the  payment of  the said amount of money by giving a notice, in writing, to  the  drawer  of the cheque, within fifteen days  of  the receipt  of  information by him from the bank regarding  the return of the cheque as unpaid;  and

     (c)  the  drawer  of  such cheque fails  to  make  the payment  of the said amount of money to the payee or, as the case  may  be,  to the holder in due course of  the  cheque, within fifteen days of the receipt of the said notice.

     The  duty cast on the payee on receipt of  information regarding  the  return of the cheque unpaid is mentioned  in clause  (b) of Section 138.  Within 15 days he has to make a demand  for payment.  The mode of making such demand is also prescribed  in  the  clause, that it should  be  by  giving notice  in writing to the drawer of the cheque.  Nowhere it is  said that such notice must be sent by registered post or that it should be despatched through a messenger.

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     Chapter  XVII  of the Act, containing Sections 138  to 142, was inserted in the Act as per Banking Public Financial Institution and Negotiable Instruments Laws (Amendment) Act, 1988.   When  the  legislature contemplated that  notice  in writing  should  be given to the drawer of the  cheque,  the legislature  must  be  presumed to have been  aware  of  the modern  devices  and equipment already in vogue and also  in store  for future.  If the court were to interpret the words giving  notice in writing in the section as restricted  to the  customary mode of sending notice through postal service or  even  by personal delivery, the  interpretative  process would fail to cope up with the change of time.

     Facsimile (or Fax) is a way of sending hand-written or printed  or  typed materials as well as pictures by wire  or radio.   In the West such mode of transmission came to  wide use  even way back in the late 1930s.  By 1954 International News  Service  began  to use  Facsimile  quite  extensively. Technological  advancement like Facsimile, Internet,  E-mail etc.   were  on swift progress even before the Bill for  the Amendment  Act  was  discussed by the Parliament.   So  when Parliament  contemplated  notice in writing to be  given  we cannot overlook the fact that Parliament was aware of modern devices and equipment already in vogue.

     Francis  Bennion  in  Statutory  Interpretation  has stressed  the  need  to  interpret   a  statute  by   giving allowances  for  any relevant changes that  have  occurred, since   the  Acts  passing,  in  law,  social   conditions, technology, the meaning of words, and other matters.

     For  the need to update legislations, the Courts  have the duty to use interpretative process to the fullest extent permissible by the enactment.  The following passage at page 167  of  the above book has been quoted with approval  by  a three  Judge-Bench  of  this  Court   in  State  vs.    S.J. Chaudhary (1996 2 SCC 428):  It is presumed that Parliament intends  the court to apply to an ongoing Act a construction that  continuously updates its wording to allow for  changes since   the   Act   was   initially  framed   (an   updating construction).  While it remains law, it is to be treated as always  speaking.  This means that in its application on any date,  the language of the Act, though necessarily  embedded in  its  own  time,  is  nevertheless  to  be  construed  in accordance with the need to treat it as current law."

     So  if  the  notice  envisaged in clause  (b)  of  the proviso  to  Section 138 was transmitted by fax it would  be compliance with the legal requirement.

     The High Courts view is that the sender of the notice must  know the date when it was received by the sendee,  for otherwise  he would not be in a position to count the period in  order  to  ascertain the date when cause of  action  has arisen.   The  fallacy  of the above reasoning  is  that  it erases  the starting date of the period of 15 days envisaged in  clause  Â©. As per the said clause the starting date  is the  date  of  the receipt of the said  notice.   Once  it starts,  the offence is completed on the failure to pay  the amount  within  15  days therefrom.  Cause of  action  would arise if the offence is committed.

     If  a  different interpretation is given the  absolute

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interdict  incorporated  in Section 142 of the Act that,  no court  shall  take  cognizance  of any  offence  unless  the complaint  is made within one month of the date on which the cause of action arises, would become otiose.

     In  this context the decision of a two Judge-Bench  in Sadanandan  Bhadran vs.  Madhavan Sunil Kumar [1998 (6)  SCC 514] can be referred to.  A payee did not file the complaint within  45  days of sending the notice after the cheque  was bounced  back,  but  he  presented  the  cheque  once  again thereafter  and issued another notice.  When a new cause  of action  arose on the strength of the second presentation  of the  cheque  a  complaint  was filed by  the  payee  on  the strength  of  that second presentation of the cheque.   This Court has stated the law in that case as follows:

     Consequent  upon the failure of the drawer to pay the money within the period of 15 days as envisaged under clause © of the proviso to Section 138, the liability of the drawer for  being  prosecuted  for  the offence  he  has  committed arises, and the period of one month for filing the complaint under  Section  142  is  to be  reckoned  accordingly.   The combined reading of the above two sections of the Act leaves no room for doubt that cause of action within the meaning of Section  142© arises  and can arise  only once. (emphasis supplied)

     (para 6)

     Learned  Judges proceeded further to consider  whether in  a case where notice in writing was sent after the  first dishonour  of  the cheque, the payee can once again  present the cheque, get it dishonoured for the purpose of filing the complaint.   Following  statement  of law has  been  clearly adumbrated by this Court in paragraph 7 thereof.

     Besides  the  language of Section 138 and  142  which clearly postulates only one cause of action, there are other formidable   impediments  which  negate   the   concept   of successive  causes  of  action.   One of them  is  that  for dishonour  of one cheque, there can be only one offence  and such  offence is committed by the drawer immediately on  his failure  to  make  the payment within fifteen  days  of  the receipt  of the notice served in accordance with clause  (b) of  the proviso to Section 138.  That necessarily means that for  similar  failure  after  service  of  fresh  notice  on subsequent  dishonour,  the drawer cannot be liable for  any offence  nor can the first offence be treated as offence  of the  first one.  At that stage, it will not be a question of waiver of the right of the payee to prosecute the drawer but of  absolution  of  the drawer of an offence,  which  stands already  committed  by him and which cannot be committed  by him again.

     The  above  view of this Court is in  direct  conflict with the view expressed by the Full Bench of the Kerala High Court in M/s.  SKD Lakshmanan Fireworks Industries vs.  K.V. Sivarama  Krishnan  (1995 Crl.  Law Journal 1384).  (In  the headnote  made  in  a volume of Supreme  Court  Cases  which reported  Sadanandan  Bhadran [1998 (6) SCC 514] the  Editor has  noted  thus:  SKD Lakshmanan Fireworks  Insustries  vs. K.V.   Sivarama  Krishnan, 1995 Crl.  Law Journal 1384  Ker.

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FB is approved.  This needs correction through a corrigendum because  the  dictum  of the Full Bench  in  SKD  Lakshmanan Fireworks  Industries  vs.   Sivarama   Krishnan  has   been disapproved by this Court in Sadanandan Bhadrans case).

     The  upshot of the discussion is, on the date when the notice  sent  by  Fax reached the drawer of the  cheque  the period  of 15 days (within which he has to make the payment) has  started  running and on the expiry of that  period  the offence  is completed unless the amount has been paid in the meanwhile.   If  no  complaint was filed  within  one  month therefrom  the payee would stand forbidden from launching  a prosecution thereafter, due to the clear interdict contained in Section 142 of the Act.

     In  this  case the complainant has admitted  the  fact that written notice was sent by fax.  Appellant has admitted its  receipt on the same date.  (It must be remembered  that respondent  has  no  case  that  fax  has  not  reached  the appellant  on  the  same  date).   The  last  day  when  the respondent  could  have filed the complaint was 26-7-  1996. But  the  complaint was filed only on 8-8-1996 So the  court has no jurisdiction to take cognizance of the offence on the said complaint.

     In  the result, we allow this appeal and set aside the impugned  judgment in so far as it relates to cheque No.188. The  complaint  filed by the respondent on the  said  cheque will stand dismissed.