TMI Blog2015 (6) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... it and Pinaki Chandra Ghose , JJ. Ajit Anekar, Satyajit A. Desai and Ms. Indu Sharma, Advs. for the Appellant Prakash Sinha, Ashok Bhatia, Shekhar Kumar, Aniruddha P. Mayee, Charudatta Mahindrakar, Selvin Raja, Mahaling Pandarge, Nishant Katneswarkar and Ms. Asha Gopalan Nair, Advs. for the Respondent JUDGMENT Uday Umesh Lalit, J. 1. This appeal by Special Leave is directed against the order dated 6.5.2008 passed by the High Court of Judicature at Bombay rejecting Criminal Application No. 2174 of 2007 preferred by the appellant for leave to appeal. 2. On 14.09.1996 a notice under Section 138 of the 'Negotiable Instruments Act, 1881'(hereinafter referred to as the Act ) was issued on behalf of the appellant to M/S Indo French Bio Tech Enterprises Ltd ('the Company' for short). The notice stated that a cheque bearing No. 364776 dated 8.9.1996 drawn by the Company on Dena Bank, New Marine Lines, Mumbai in favour of the appellant was returned on 10.9.1996 with endorsement funds insufficient . The notice therefore called upon the addressee to make the payment of the cheque amount within 15 days of the receipt of such notice. No reply was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separate notice individually. So also reliance was placed on the decision of a Single Judge of Delhi High Court in the case of Jain Associates v. Deepak Chawdhary Co. (1999) 80 DLT 654, wherein it was laid down that Section 141 of the Act does not require that each and every partner of the firm is required to be issued notice. Similar view was taken by High Court of Andhra Pradesh in K. Pannir Selvan v. MMTC [2000] Cr. L.J. 1002 and by Delhi High Court in Ranjit Tiwari v. Narender Nayyar [2012] 191 DLT 318. 6. The High Court, relying on the judgment of the Division Bench of Madras High Court B. Raman (supra) observed that it was mandatory to have issued separate notices to the directors. The High Court concluded thus :- If the legal fiction is created by Section 141 to make directors who are responsible for day to day affairs of the Company, punishable under Section 138, then it is necessary that they get an opportunity to rectify, the mistake or clarify matters after service of notice. So before making the complaint against the directors, notice necessarily must be served on them. In my opinion without service of notice to accused Nos. 6 8, vicarious liability of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, by making efforts to pay the amount to the payee, in the name of the Company, in that event, the complainant may either drop the action of filing the Complainant or, in the event of non-payment of the cheque amount, he may choose the persons, who are really responsible for the commission of offence and, then, initiate prosecution against them. 8. It was submitted by Mr. Ajit Anekar, learned Advocate for the appellant that Section 138 does not contemplate issuance of separate notices to the directors and that no such requirement ought to be read into said Section. Mr. Shree Prakash Sinha and Mr. Ashok Bhatia, learned Advocates appearing for respondents relied upon the decision of the Division Bench of Madras High Court in B. Raman (supra). It was submitted that though the issue whether such separate notices are mandatorily required to be given to the Directors had not squarely arisen, paras 10 11 of the decision of this Court in N.K. Wahi v Shekhar Singh [2007] 9 SCC 481 did speak of such notices. We quote said paras 10 11 :- 10. In order to bring application of Section 138 the complaint must show : 1. That Cheque was issued; 2. The same was presented; 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said amount of money by giving a notice, in writing, to the drawer, of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheques 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. Explanation : For the purpose of this section, debt or other liability means a legally enforceable debt or other liability. 141. Offences by companies - (1) If the person committing an offence under section 138 is a Company, every person who, at the time the offence was committed, was in charge of, and was responsible to the Company for the conduct of the business of the Company, as well as the Company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and proceeded against and punished accordingly; Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words used are capable of one construction only then it would not be open to the courts to adopt any other hypothetical construction on the ground that such hypothetical construction is more consistent with the alleged object and policy of the Act. The words used in the material provisions of the statute must be interpreted in their plain grammatical meaning and it is only when such words are capable of two constructions that the question of giving effect to the policy or object of the Act can legitimately arise. When the material words are capable of two constructions, one of which is likely to defeat or impair the policy of the Act whilst the other construction is likely to assist the achievement of the said policy, then the courts would prefer to adopt the latter construction. It is only in such cases that it becomes relevant to consider the mischief and defect which the, Act purports to remedy and correct. 11. In Nasiruddin v. Sita Ram Agarwal [2003] 2 SCC 577 this Court stated the law in the following terms : 37. The court's jurisdiction to interpret a statute can be invoked when the same is ambiguous. It is well known that in a given case the court can iron out th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar context avoiding absurdity and inconsistencies or unreasonableness which may render the statute unconstitutional. 13. With these principles in mind, we now consider the provisions in question. According to Section 138, where any cheque drawn by a person on an account maintained by him is returned by the Bank unpaid for reasons mentioned in said Section such person shall be deemed to have committed an offence. The proviso to the Section stipulates three conditions on the satisfaction of which the offence is said to be completed. The proviso inter alia obliges the payee to make a demand for the payment of said amount of money by giving a notice in writing to the drawer of the cheque and if the drawer of the cheque fails to make the payment of the said amount within 15 days of the receipt of said notice, the stages stipulated in the proviso stand fulfilled. The notice under Section 138 is required to be given to the drawer of the cheque so as to give the drawer an opportunity to make the payment and escape the penal consequences. No other person is contemplated by Section 138 as being entitled to be issued such notice. The plain language of Section 138 is very clear and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd proviso gives 15 days time to the drawer to make the payment of the amount and escape the penal consequences. Under clause (a) of Section 142, the complaint must be filed within one month of the date on which the cause of action arises under the third proviso to Section 138. Thus a complaint can be filed within the aggregate period of seventy five days from the dishonour, by which time a complainant can gather requisite information as regards names and other details as to who were in charge of and how they were responsible for the affairs of the Company. But if we accept the logic that has weighed with the High Court in the present case, such period gets reduced to 30 days only. Furthermore, unlike proviso to clause (b) of Section 142 of the Act, such period is non-extendable. The summary remedy created for the benefit of a drawee of a dishonoured cheque will thus be rendered completely cumbersome and capable of getting frustrated. 16. In our view, Section 138 of the Act does not admit of any necessity or scope for reading into it the requirement that the directors of the Company in question must also be issued individual notices under Section 138 of the Act. Such directors w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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