ashok kumar (Social Worker) 23 February 2015

138 nia-post dasrath roop singh decision

Post Dasrath Roop Singh Decision

In Dashrath Roop Singh Rathore, the SC on 1^st August 2014, concluded that the “offence in contemplation of Section 138 of the NI Act was the dishonor of the cheque alone”; and that so far as the commission of the offence itself is concerned the proviso had no role to play.

Recently in Yogendra Pratap Singh v. Savitri Pandey, [2014 (10) SCALE 723] (“Yogendra”), a Full Bench of the SC headed by the Chief Justice of India Justice R M Lodha on 19^th Sept 2014 has observed, however, that:“For completion of an offence Under Section 138 of the NI Act not only the satisfaction of the ingredients of offence set out in the main part of the provision is necessary but it is also imperative that all the three eventualities mentioned in Clauses (a), (b) and (c) of the proviso are satisfied. Mere issuance of a cheque and dishonour thereof would not constitute an offence by itself Under Section 138.”

In Yogendra, the question was asked, “can an offence under Section 138 of the NI Act be said to have been committed when the period provided in clause (c) of the proviso has not expired?” Even though Dashrath was a Full Bench too – if we accept Dashrath’s reasoning – the answer to that question should have been in the affirmative. But Yogendra instead holds, “if the period prescribed in clause (c) of the proviso to Section 138 has not expired, there is no commission of an offence.”

More Developments

The learned Metropolitan Magistrate (South East), Saket Courts, New Delhi vide orders dated 30.08.2014 and 08.09.2014 returned to the petitioner/ complainant M/S. GOYAL MG GASES PVT. LTD for filing the same in the Court having territorial jurisdiction to entertain and try the same in the light of Dasrath Roop Singh Rathore.

The petitioner M/S. GOYAL MG GASES PVT. LTD assailed the orders dated 30.08.2014 and 08.09.2014 vide Crl. M.C. No 4407/14, 4731/14 & 4534/14 to 4568/14. The High Court on 16.12.2014, dismissed the petitions and held that the complaints be returned to the complainant for filing in the appropriate Court having territorial Jurisdiction

The complainant M/S. GOYAL MG GASES PVT. LTD preferred Petitions No 134 to 170 of 2015 in SC for SLP to Appeal against the order of the Delhi HC dated 16.12.2014. Honourable SC has referred the matter to another Bench of 3 Judges and granted interim stay to the petitioner against the Delhi HC Order i.e. the order transferring the complaints in accordance with the mandate of Dasrath Roop Singh Rathore and has also instructed the petitioner to refile the complaints in the trial Court which will be kept on record but not proceeded with.

So what is the implication of all this?

Does it mean that for the time being nteh transfer of cases as per Dasrath Roop Singh mandate has to be stopped?

Reply Follow

6 Replies

SANTOSHSINGH. (ADVOCATE sardarsena@gmail.com) 24 February 2015

Since inception there are various judgments for NI 138 cases since the law is short .

Irrespective of any judgments for an expert defense lawyer it is easy to come out of any cheque case.

However your efforts are excellent for keeping tab for latest developements in cheque law.

1) Coming to Yogendra case the basic difference of offense and right to prosecute has been defined since 2007 starting from KERALA HC AND THIS CITATION HAS JUST CLEARED THE DOUBTS due to various HC jdugments.

2) In Goyal case of DELHI HC there was whole sale transfer of cheques cases that is return of complaints. What grounds are taken is SLP are not known but since as per your post the matter is sent to THREE BENCH and earlier DASHRATH CASE is also THREE BENCH so unless the matter travels to larger bench there is only possibility of fine turning the earlier verdict.

R Trivedi (advocate.dma@gmail.com) 25 February 2015

Before this DRS case, complainant had the power to harass the drawer....which was also not good.

Now after this DRS case, things can be tough for complainant..

Both the situations are extreme...not expected from SC, In my opinion sooner it will be changed to...

1. Place of Drawee Bank Home Branch.

2. Place of complainant from where transactions happened, it is to be made clear that complainant may have multiple places of operation, but the main place from where the transaction with accused took place shall decide the same.

Like in this MG Gas case......at the end MG Gas would win the jurisdiction part...and Delhi will be the jurisdiction place...it makes sense..

Madhu Mittal (Director) 26 February 2015

Respected Sirs,

In the case of Dashrath Roop Singh Rathore’s case itsel,f it was held in para 17 “made payable at a place of the creditor's convenience (emphasis supplied)”. It is made payable (not drawn). This has been also held/supported in case of Mr.Ramanbhai Mathurbhai Patel ...by THE HIGH COURT OF JUDICATURE AT BOMBAY as follows:

7. One may also refer to para 17 of the said judgment where the Hon'ble supreme Court has said as under:

“17. ..... In our discernment, it is also now manifest that traders

and businessmen have become reckless and incautious in extending credit where they would heretofore have been extremely hesitant, solely because of the availability of redress by way of criminal proceedings. It is always open to the creditor to insist that the cheques in question be made payable at a place of the creditor's convenience (emphasis supplied)”.

8. It is thus clear that in the present case by issuing cheques payable at all branches, the drawer of the cheques had given an option to the banker of payee to get the cheques cleared from the nearest available branch of bank of the drawer.

In a case M/S. GOYAL MG GASES PVT. LTD , the above Bombay High court decision was not brought to the knowledge of respected Judges of Delhi High court of this case, neither the attention towards this para 17 was drawn .

In a case GE Capital Transportation Financial Services Ltd. vs. Rahisuddin Khan (09.09.2011 - DELHC),it was held:

4… Even in the case accused is having an account outside Delhi, the cheque physically never goes there under the core banking system.

35. As submitted in the Core Banking System which is being adopted by all the banks in the country in accordance with the mandate of the Reserve Bank of India, if the Account Payee outstation Cheque is tendered by the Customer to its bank at New Delhi then the same is sent by the Collecting Bank (Petitioner/Complainant's Bank) to the Clearing House of the RBI which sends the cheque to the Service Branch of the Drawee Bank at New Delhi and if the drawer of the cheque has the requisite amount in its account it is cleared there itself and if the account does not have the requisite amount for honouring the cheque, the same is dishonoured. Here, the service branch of the Drawee Bank at New Delhi has the access to the account of the drawer in view of interlinking of all the branches all over the country. If the Collecting Bank has adopted the cheque truncation system then the cheque is scanned by the collecting bank and thereafter image of the cheque is transmitted to the clearing house of the Reserve Bank of India at New Delhi which sends the image of the cheque to the service branch of the Drawee Bank at New Delhi and if the drawer of the cheque has the requisite amount in its account it is cleared there itself and if the account does not have the requisite amount for honouring the cheque, the same is dishonoured. Here the service branch of the Drawee Bank at New Delhi has the access to the account of the drawer in view of interlinking of all the branches all over the country.

39. Thus, it is evident that the cheque was presented by the petitioner/complainant's Bank to the Drawee Bank at New Delhi through the clearing house of the Reserve Bank of India and cheque was dishonoured at New Delhi by the Drawee Bank and thereafter the cheque was returned as unpaid by the Drawee Bank to the petitioner/ complainant's Bank at New Delhi. Therefore, Ld. MM has the jurisdiction to try the present case under Section 138 of the NI Act and take cognizance of the offence mentioned in the complaints and issue summons to the Respondent/Accused accordingly.

With Regards,

ADVOCATE TRILOK (CRIMINAL family PROPERTY topfreind@gmail.com ) 26 February 2015

This Bombay HC judgment has been stayed by SC,

Now what Goyal gas case may bring from SC will be the latest .

Madhu Mittal (Director) 28 February 2015

Respected Sirs,

What are your opinion/comments on the point made payable (not drawn), bomay high court order was only stayed, not set aside till date.

the In the case of Dashrath Roop Singh Rathore’s case itsel,f it was held in para 17 “made payable at a place of the creditor's convenience (emphasis supplied)”. It is made payable (not drawn).

With Regards,

ADVOCATE TRILOK (CRIMINAL family PROPERTY topfreind@gmail.com ) 28 February 2015

Dashrath case took FIVE YEARS for verdict to come in supreme court.

So again if any further change to come it will take time. AT PAR CHEQUE citation is on face of it against not only DAHSRATH case but many other earlier cases so it was promptly stayed. Gujrat High court has given detailed discussion why AT PAR cheque can not give jurisdiction at the place of deposit..

But all told the cheque cases can be won since there are many ways out still available.