* 1 * IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPLICATION NO. 4434 OF 2009 W I T H CRIMINAL APPLICATION NO. 4435 OF 2009 W I T H CRIMINAL APPLICATION NO. 4436 OF 2009 W I T H CRIMINAL APPLICATION NO. 4437 OF 2009 W I T H CRIMINAL APPLICATION NO. 4438 OF 2009 W I T H CRIMINAL APPLICATION NO. 4439 OF 2009 W I T H CRIMINAL APPLICATION NO. 4440 OF 2009 W I T H CRIMINAL APPLICATION NO. 4441 OF 2009 W I T H CRIMINAL APPLICATION NO. 4442 OF 2009 W I T H CRIMINAL APPLICATION NO. 4443 OF 2009 W I T H CRIMINAL APPLICATION NO. 4452 OF 2009 W I T H CRIMINAL APPLICATION NO. 4453 OF 2009 W I T H CRIMINAL APPLICATION NO. 4454 OF 2009 W I T H CRIMINAL APPLICATION NO. 4455 OF 2009 W I T H CRIMINAL APPLICATION NO. 4456 OF 2009 W I T H CRIMINAL APPLICATION NO. 4457 OF 2009 W I T H CRIMINAL APPLICATION NO. 4458 OF 2009 W I T H CRIMINAL APPLICATION NO. 4459 OF 2009 W I T H CRIMINAL APPLICATION NO. 4460 OF 2009 Mustafa Surka ........Applicant V/S. * 2 * M/s. Jay Ambe Enterprise & anr. .....Respondents. --------- Shri. Ashok P. Mundargi, Senior Counsel with Shri. S.V. Marwadi and Shri. Niranjan Mundargi i/by. Mr. Jayant Bardeskar, Mr. Hrishikesh A. Mundargi, Ms. Bhakti Deshpande, Ms. Swapna Kode, Ms. Vishranti Navale, adv.for applicant. Mrs. Pravina Kanani and Ms. Vidya Dongre, adv.for respondent no.1. Smt. R.V. Newton, APP for State-respondent no.2.-in Cri.Appln NO. 4434/2009. Smt.P.P. Bhosale , APP for State-respondent no.2.-in Cri.Appln NO. 4435/2009-4440/2009. Smt. S.V. Gajare , APP for State-respondent no.2.-in Cri.Appln NO. 4441/2009-4443/2009 and Cri. Appln NO. 4452-2009 till 4456-2009. Shri. D.R. More , APP for State-respondent no.2.-in Cri.Appln NO. 4457/2009-4460/2009 CORAM : S.C. DHARMADHIKARI, J. DATED : 8th FEBRUARY, 2010. P.C. :- 1. In all these matters, the common question that has been raised is Whether a complaint under Section 138 of Negotiable Instruments Act, is “ maintainable when the complainant receives an intimation of dishonour from the banker of the drawer to the effect that the signature of the drawer does “ not tally or the remarks of the bankers are Drawers signature differs from ” “ the specimen signature ?. ” 2. In other words, when the Negotiable Instruments Act and more particularly Section 138 thereof permits filing of a complaint alleging commission of offence * 3 * under Section 138 of N.I. Act on the ground that the dishonour of cheque is for insufficiency etc. of the funds is such a complaint tenable or the words are restrictive in nature, hence not capable of a wide meaning. Thus, assuming that the substantive provision is restrictive, yet, considering the title of the section in question, whether a complaint can be filed under Section 138 even if the endorsement or bankers slip is to the afore mentioned effect. 3. The facts in Criminal Application No. 4434 of 2009 need be noted for the purpose of appreciating the rival contentions. The first-respondent complainant filed a complaint before the Metropolitan Magistrate, 31st Court, Vikhroli, Mumbai being Case No. 437/SS/2009 against the petitioner, who is accused no.4. It is alleged that the complainant is a proprietary of M/s. Jai Ambe Enterprises, which is a proprietary concern. It is stated that the first accused is a company incorporated under the Companies Act, 1956. Accused nos.2 and 3 are directors and authorised signatories of accused no.1, whereas, accused nos.4, 5 and 6 are also authorised signatories. Each of these accused are responsible for the day to day affairs and management of accused no.1. They were responsible for the day to day affairs and management when the cheques, which are subject matter of the complaint were presented and returned dishonoured, so also, when the cause of action arose. 4. It is alleged that during their course of business, accused nos.2 to 6 on behalf of the first accused placed orders with the complainant for delivery of * 4 * goods and the complainant sold and delivered goods worth crores of rupees. There was no dispute regarding quality and quantity of the goods sold. There were invoices/bills forwarded and as per the Books of Accounts maintained by the complainant, a sum of Rs.8,49,69479.50/- was due and payable. 5. It is alleged that after issuance of several cheques in discharge of their liability and particularly towards the goods sold and delivered and when the funds could not be arranged for honouring the cheques that the accused by their letter dated 30/12/2008 made false and baseless allegations, disputing the rate of the goods sold and delivered. 6. It is alleged that for the first time, accused no.1 informed the firm that a portion of the bank account of accused no.1 has been changed due to alleged malpractices by employees of accused no.1, particularly, the petitioner who is accused no.4. Thereafter, there was correspondence on this issue and it is alleged that the cheques which are subject matter of the complaint were signed by accused nos.5 and 6 being authorised signatories of the accused no.1 with the consent and knowledge of accused nos.2, 3 and 4 in discharge of their liabilities and the three cheques of Rs.5,86,077/- when presented came to be returned with the bankers memo which reads as under :- Drawers signature differs from the specimen signature “ ” 7. Thereafter, it is alleged that the Statutory Notice [S.138(b)] was sent to which no reply was received for a considerable length of time, until, the letter * 5 * dated 26/02/2009. By this letter, the accused made false and baseless allegations and there was a rejoinder therefor addressed to the same. 8. It is upon these allegations and contending that there was enough opportunity to the accused to replace the returned cheques with fresh cheques that the offences punishable not only under Section 138 of the Negotiable Instruments Act but under Section 402 of IPC have been committed. This complaint is dated 7/3/2009. Annexed thereto are the bankers memos and copies of the letters. 9. When this complaint was placed before the Magistrate concerned, he observed that prima-facie case of an offence punishable under Section 138 of the Negotiable Instruments act has been made out and therefore process be issued against all the accused. It is against this order that the instant petition has been filed. 10. Mr. Mundargi, learned Senior Counsel appearing on behalf of the petitioner-applicant contended that on a bare perusasl of Section 138, the complaint is not maintainable. He submits that Section 138 of the N.I. Act falls under Chapter- which provides for penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts. If the title to this section coupled with the section itself is perused, it is apparent that barring the return of the cheques as unpaid by the bank either because of the amount of money standing to the account is insufficient to honour the cheque or that it exceeds * 6 * the amount arranged to be paid by an agreement with the bank, a person shall be deemed to have committed an offence, the same is not an offence in other events of dishonour. Mr. Mundargi, submits that the section provides for a deeming fiction. He submits that the principles while interpreting the deeming fiction are well settled. What is deemed to be existing is not the real position. The state of affairs are to be imagined to be true. Therefore, when the deeming fiction has to be applied in only two contingencies and cases, then, it cannot be extended to cover any other contingency or cause for dishonour of the cheque or it being returned unpaid by the bank. Mr. Mundargi, submits that, by Section 146 of the N.I. Act the Bank s slip is prima-facie evidence of ’ certain facts. He further submits that if the various sections falling under this Chapter are read harmoniously, then, no other reason stated can be said to be creating an offence by virtue of the deemed fiction. Therefore, it is not possible to extend the section to cases and reasons not stipulated therein, by interpretative process. He submits that the word etc should be seen in the “ ” backdrop of the Chapter, the arrangement of sections and the intent and object of the legislature while inserting Chapter-XVII in the N.I. Act, 1881. Mr. Mundargi, submits that the decision of the Division Bench of this court in the case of Rakesh NemKumar Porwal V/S. Narayan Dhondu Joglekar & anr. reported in 1993 Mh.L.J. 630 ,so also, the decision of the learned Single Judge of this court in the case of Jaikrishna M. Patil V/S. Dilip D. Chawde reported in 2006 L.J. * 7 * Soft Bombay P. 185 will not be of any assistance. He submits that the decision of the Single Judge in Criminal Appeal No. 396 of 1997 decided on 30/01/2006 is renderred after a trial. There on facts, the learned Judge found that the case of the complainant is that the accused deliberately made a different signature to avoid payment. On facts and when the entire evidence was perused that the learned Judge rendered a finding that the act of the accused was not bonafide and therefore the difference in the signature was not a reason to dismiss the complaint. He submitted that this decision must be seen in the factual backdrop and in the peculiar circumstances emerging from the record. This decision is of no assistance while interpreting the section. Further, the Division Bench was dealing with a case where the cheque was returned unpaid for insufficiency of funds but finding that the drawer managed to close the Account or stop payments, that the Division Bench interpreted the section widely and held that the complaint was maintainable. 11. Mr. Mundargi, submits that all these decisions are based upon the wide interpretation placed on the section by the Supreme Court itself. However, in later decisions and more particularly that of the two judge bench of the Supreme Court in Vinnod Tanna V/S. Jaheer Siddiqui and Ors. reported in (2002) 7 SCC 541., earlier decisions have been distinguished and a view taken that dishonour of cheque because of incomplete signature of drawer, does not attract Section 138. Mr. Mundargi, also invited my attention to a two Judge Bench * 8 * decision of the Hon ble Supreme Court in Criminal Appeal No. 913 of 2009 ’ decided on 5/5/2009 (Rajkumar Khurana V/s. State of Delhi & Anr.) wherein the Hon ble Supreme Court took a view that the parameters for invoking Section ’ 138 are limited. The refusal on the part of the bank to honour the cheque in all cases for varied reasons cannot be said to be attracting these provisions. In the case before the Supreme Court (supra), the cheque was returned with the memo said cheque lost by the drawer . It is in that context that the Supreme “ ” Court observed that the purpose of a legal fiction is clear. That cannot be extended for any purpose other than the one mentioned in the statutory provision. Mr. Mundargi, emphasized that the provision in question is a penal one. Therefore, it must receive strict Interpretation. For all these reasons, he submits that the complaint is not maintainable and no process could have been issued on such a complaint. 12. On the other hand, Ms. Kanani, appearing on behalf of the original complainant submitted that the complaint in this case must be perused as a whole. The test is whether all allegations in the complaint assuming to be true, make out a case of an offence punishable under the penal laws. Ms. Kanani submits that in this case, the complaint alleges that over a period of time, there were transactions, goods were delivered, bills and invoices were forwarded and no dispute was raised with regard to liability. At no stage, the accused denied their liability to make payment. The accused went on forwarding cheques and * 9 * the cheques being returned with the aforementioned remark by itself would not mean that the complaint is not tenable. If the cheques are returned with such remarks and memos but the drawer fully knows that the funds are insufficient, then, the substantive provision is attracted and it is only when the matter is tried that it can be held whether the complaint is maintainable or not. Today, this court should not presume that complaints filed under Section 138 for such remarks and memos of the bankers, can be said to be straightaway not maintainable. She submits that in some of the cases, the endorsements are that the cheques are returned not because of the signature difference, but, also on account of insufficiency of funds. Therefore, whenever such twin reasons are assigned for returning the cheques unpaid, then, the complaint is in any event maintainable, insofar as, the other reason for dishonour is concerned. Therefore, the complaint will have to be construed and perused in each case to find out whether an offence punishable under Section 138 has been committed or not. Consequently, it is a matter of individual facts and no general rule can be laid down. 13. She heavily relied upon the decision of the Division Bench of this court in the Rakesh Nemkumar Porwal’s (supra) case. She invited my attention to paragraphs-18, 19 and 20 and emphasized that the word etc cannot be held “ ” to be a surplusage. She submits that the legislature inserts every word with some purpose. If the title to the section uses such words, then, the intent is * 10 * clear. The legislature does not exhaust itself, insofar as, the reasons for dishonour are concerned. Even if the dishonour of the cheque is for reasons other than insufficiency of funds, still, a complaint under Section 138 is maintainable, is the conclusion of the Division Bench and this decision is binding upon this court. Further, the views of learned Single Judge of this Court in the case of Jaikrishna Patil (supra) and Rajan Kinnerkar V/s. Eric Cordeiro & anr.(1994) 3 Bom. C.R. page 634 `are , binding upon this court. She ’ submits that once the essential averments are made in the complaint and the object and purpose of the enactment is understood, then, the complaints in question cannot be thrown out as not maintainable. 14. She has relied upon the following decisions in support of her contentions. (1). 1993 Mh.L.J. 630 Rakesh Nemkumar Porwal V/s. Narayan Dhondu Joglekar and anr. (2). AIR 1999 (SC) 1952 NEPC Micon Ltd V/S. Magma Leasing Ltd. (3). 1998 SCC 249 Modi Cements V/s. Kuchil Kumar Nandi. (4). Supreme Court of India SLP 2977-2978/2004 Madan Singh V/s. Mohanlal & Ors. (5) 2006 L.J. Soft Bombay P. 185, Jaikrishna M. Patil V/s. Dilip D. Chawde. (6). 2006 Cr.L.J. 0 261, Dinesh Harakchand Sankla V/s. Kurlon Ltd & anr. (7) 1994(3) Bom. C.R. 634 Rajan Kinnerkar V/s. Eric Cordeiro & anr. (8) 2007 Company Cases 268(S.C.) SMS. Pharmaceuticals Ltd V/s. Neeta Bhalla & * 11 * Ors. (9) 1999 Bom.C.R.(Cri.) 0432, Krishna Murari Poddar & anr. V/s. State. (10) 2008 AIOL (S.C.) 368 Malwa Cotton & Spinning Mills V/s. Virsa Singh Sidhu & anr. 15. Thus, the only question that falls for interpretation in these applications is whether a complaint can be said to be maintainable when the reasons for returning the cheques unpaid are other than insufficiency of funds. 16. The undisputed position is that Chapter-XVII has been inserted by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988). The Chapter has been inserted with effect from 1/04/1989. The legislature was aware of the fact that the Chapter had to be inserted to enhance the acceptability of cheques in settlement of liabilities by making the drawer liable for penalties, in case of bouncing of cheques due to insufficiency of funds in the account or for the reason that it exceeds the arrangement made by the drawer, with adequate safeguard to prevent harrassment of honest drawers. The Statement of Objects and Reasons by itself cannot be held to be a guide for interpreting the statute, and the plain words must be looked into, but, whenever there is a doubt, then, for a limited purpose and for construction of the substantive provisions, assistance can be taken of Statement of Objects and Reasons. That is to discern the legislative intent. In the instant case, a perusal of Chapter-XVII which is titled as Of Penalties in “ * 12 * case of dishonour of certain cheques for Insufficiency of Funds in the Accounts , would show that Section 138 opens with the words Where any ” “ cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence . He ” shall be punished with imprisonment which may extend now for two years or with fine, which may extend to twice the amount of the cheque or with both. However, this is without prejudice to any other provisions of the Negotiable Instruments Act. Thus, a new Chapter is inserted which provides for penalties for dishonour of certain cheques. There is substance in the contention of Shri. Mundargi that the word etc should not be seen in insolation, but, must be “ ” seen in the backdrop of the title to the Chapter, the Statement of Objects and Reasons and the substantive provision itself. The offence that is carved pertains to payment of amount of money, that the drawer owes to another person by cheque. That cheque is drawn because the drawer maintains an account with the bank and money is deposited by him with the banker which lies to the credit of the drawer. The cheque is for payment of money for discharge in * 13 * whole or in part of the debt or any other liability. The proceeds of the cheque have to be honoured by the banker from the Account of the Drawer maintained by it. When the legislature is aware that the account of the drawer has money standing to his credit and the drawer draws a cheque, but, that amount of money is insufficient to honour the cheque, that the cheque will be returned unpaid by the banker. Sometimes, the amount of money standing to the credit of that account is inadequate to honour the cheque, because, the amount of the cheque exceeds the arrangement with the bank. Therefore, although the marginal note of the Section reads as dishonour of the cheques yet, the “ ” substantive provision uses the word returned unpaid by the banker . The “ ” legislature does not intend to make any other act or reason assigned by the banker for returning the cheque unpaid as an offence. This is clear from the fact that it creates a fiction and states that such person shall deemed to have committed an offence. 17. The deeming fiction and its interpretation is subject matter of several decisions of the Hon ble Supreme Court. It would not be necessary to refer to ’ each of them but the principles emerging from them are summarised in Principles of Statutory Interpretation by Hon ble Justice G.P. Singh wherein, “ ’ ” the learned Author observes thus : * 14 * In interpreting a provision creating a legal fiction, the court is to “ ascertain for what purpose the fiction is created, and after ascertaining this, the Court is to assume all those facts and consequences which are incidental or inevitable corollaries to the giving effect to the fiction. But in so construing the fiction it is not to be extended beyond the purpose for which it is created, or beyond the language of the section by which it is created. It cannot also be extended by importing another fiction. The principles stated above are well settled . A legal fiction may also “ ” be interpreted narrowly to make the statute workable. ” 18. In the decision relied upon by Shri. Mundargi (Vinod Tanna’s case) as well, the Hon ble Supreme Court has observed that the legislature has carved out an ’ offence in limited cases. It is only when the cheque is returned unpaid either because of the amount of money standing to the credit of the Account is insufficient to honour the cheque or that the cheque amount exceeds the amount arranged to be paid in that Account by an agreement with that bank, that the offence is committed. Therefore, there is merit in the contention that the word etc would not be decisive. The section must be read as a whole. “ ” The principles of statutory interpretation are clear. Even parts, sub-parts and sub-sections of a section must be read together and as a whole, so as to make a consistent enactment. It is not permissible to leave out or omit some words or add some words which the legislature never intended. It cannot be said that the legislature was unaware of the varied reasons for which the cheques could be returned unpaid. However, when it enacted the provision carving out an offence only for limited acts, then, that legal fiction cannot be extended to include something which the legislature has not included. That would amount * 15 * to adding something to the provision, which is im-permissible. If the plain words are taken into account, then, it is not possible to agree with the complainants that if the cheques are returned unpaid on account of difference in the signatures on the cheque or for aforementioned reasons that the complaint would be maintainable. 19. However, it must be at once clarified that if the cheques are returned unpaid for more than one reason and if one of the reason assigned is that the amount is insufficient as provided by Section 138, then, in individual facts and cases, the complaints can be held to be maintainable and it will be for the parties to establish and prove their rival cases. Such complaints by themselves cannot be held to be non-maintainable. The case that I am considering is of the cheque being returned unpaid on account of difference in signature and there are no other reasons for dishonour in some of the cases that were brought to my notice. 20. Now comes the decision of this court in Rakesh Nemkumar Porwal (supra) case. 21. There, the Division Bench was considering the complaint wherein all 12 cheques were returned by the complainant s bankers with the endorsement ’ refer to drawer . Therefore, what fell for interpretation of the Division Bench, “ ” was whether the complaint can invoke Section 138 of Negotiable Instruments Act and in that context the Division Bench referred to the rival contentions. It * 16 * refers to several decisions of the High Courts in India. It is thereafter that the Division Bench concluded in paragraph-18 that the circumstances in which, such dishonour takes place have to be totally ignored. The law takes no note of the fact that the payment is not forthcoming and it matters little that any of the manifold reasons may have caused that situation, if, for instance the closure of an account or the stoppage of payment or any other of the commonplace reasons. It may be true that the Division Bench referred to the legislative intent