Holding

A complaint under Section 138 may be entertained even if filed before the 15‑day period, provided the cause of action under clause (c) of the proviso has arisen; taking cognizance occurs only when the magistrate applies his mind, and the conviction was upheld with the imprisonment sentence substituted by a fine.

Summary

The appellant, Narsingh Das Tapadia, lent Rs. 2,30,000 to the respondent, G.D. Partani, who issued a post‑dated cheque that was dishonoured on 6 October 1994. After serving a notice on 26 October 1994, the appellant filed a complaint under Section 138 of the Negotiable Instruments Act on 8 November 1994, which was returned as defective and re‑filed; the trial court took cognizance on 17 November 1994 and convicted the respondent, a decision affirmed by the appellate court. The High Court set aside the conviction, holding the complaint premature because it was filed before the expiry of the 15‑day period after notice. The Supreme Court held that the proviso to Section 138 only requires the cause of action to arise, not a prescribed waiting period, and that taking cognizance occurs only when the magistrate applies his mind, not merely upon filing. Consequently, the High Court’s dismissal was erroneous, the conviction was upheld, and the imprisonment sentence was substituted with a fine of Rs. 5,000. The fine was imposed considering that the respondent had already repaid the amount with interest.

Issues considered

Whether a complaint under Section 138 of the Negotiable Instruments Act filed before the expiry of the 15‑day period after notice is premature and must be dismissed.
What constitutes 'taking cognizance' of an offence under Section 142 of the Act and Section 190 of the Code of Criminal Procedure.
Whether the conviction under Section 138 stands when the debt has been repaid and whether the sentence can be substituted by a fine.

Legislation cited

Code of Criminal Procedure, 1973s. 156(3), s. 190, s. 200, s. 202, s. 203, s. 313
Negotiable Instruments Act, 1881s. 138(c), s. 142(b), s. 142(c)

Subjects

Negotiable Instruments ActSection 138Cheque dishonourComplaint pre‑matureTaking cognizanceCriminal ProcedureFine substitutionDebt repayment

Judgment

NARSINGH DAS TAPADIA A
v.
GOVERDHAN DAS PARTANI AND ANR.

SEPTEMBER 6, 2000

[K.T. THOMAS AND R.P. SETHI, JJ.] B

Negotiable Instruments Act, I 881 : Sections I 38(C)-Proviso and I 42.

Cheque-Dishonour-Notice for repayment served on 26.10.1994-
Complaint under Section 138 filed on 8.J/.1994-Complaint returned as C
defective-Complaint refiled and Court took cognizance on 17. l I. 1994-
Conviction by trial court upheld by Appellate Court-High Court setting
aside conviction on the ground that complaint was pre-mature-Appeal
· before Supreme Court-Held High Court erred in holding that complaint
was. liable to be dismissed as pre-mature-Accused having paid the entire D
amount sentence of imprisonment substituted with that of fine.

Criminal trial-Court-Taking cognisance of offence-Meaning and
scope of

The respondent borrowed a sum of Rs. 2, 30,000 from the appellant and E
issued a post dated cheque in his favour. When the cheque was presented for
payment the same was dishonoured by the Bank due to insufficiency of funds.
The notice demanding repayment served by the appellant and received by the
respondent on 26th October, 1994 evoked no response. Consequently, the
appellant filed a complaint under Section 138 of the Negotiable Instruments F
Act, 1881 on 8.11.1994 but the same was returned as defective. When the
complaint was refiled the trial court took cognizance on 17.11.1994. It
convicted the respondent under Section 138 and sentenced him to simple
imprisonment for six months. The Appellate Court confirmed the conviction
and sentence passed by the trial court. On appeal the High Court set aside
the conviction holding that the complaint filed against the respondent was pre- G
mature.

The High Court also held that as the notice was served on the respondent
on 26th October, 1994, the appellant could not file the compJairit before the
expiry of 15 days period. Against the decision of High Court appeal was
H
171
172 SUPREME COURT REPORTS (2000] SUPP. 3 S.C.R.

A preferred before this Court.
Allowing the appeal, the Court

HELD: 1. The impugned judgment is based upon wrong assumptions of
law and facts. Consequently, it is set aside. (177-E]
B
2. The compliance of clause (c) of proviso to Section 138 of the Negotiable
Instruments Act, 1881 enables the Court to entertain a complaint. Clause (b)
of Section 142 prescribes a period within which the complaint can be filed
from the date of the cause of action arising under clause (c) of the proviso to
Section 138. No period is prescribed before which the complaint cannot be
C filed, and if filed not disclosing the cause of action in terms of clause (c) of
the proviso to Section 138, the Court may not take cognizance till the time
the cause of action arises to the complainant. "Taking cognizance of an
offence" by the court has to be distinguished from the filing of the complaint
by the complainant. Taking cognizance would mean the action taken by the
D Court for initiating judicial proceedings against the offender in respect of
the offence regarding which the complaint is filed. Before it can be said that
any Magistrate or Court has taken cognizance of an offence it must be shown,
that he has applied his mind to the facts for the purpose of proceeding further
in the matter at the instance of the complaint. If the Magistrate or the Court
is shown to have applied the mind not for the purpose of taking action upon
E the complaint but for taking some other kind of action contemplated under
the Code of Criminal Procedure such as ordering investigation under Section
156 (3) or issuing a search warrant, he cannot be said to have taken
cognizance of the offence. [175-B-F]

Narayandas Bhagwandas Madhavdas v. State of West Bengal, AIR
F (1959) SC 1118 and Gopal Das Sindhi & Ors., v. State ofAssam & Anr., AIR
(1961) SC 986, referred to.

3. Mere presentation of the complaint in the court cannot be held to
mean, that its cognizance had been taken by the Magistrate. Ifthe complaint
G is found to be pre-mature, it can await maturity or be returned to the
complainant for filing later and its mere presentation at an earlier date need
not necessarily render the complaint liable to be dismisse~ or confer any
right upon the accused to absolve himself from the criminal liability for the
offence committed. In the instant case mere presentation of the complaint on
8.11.1994 when it was returned to the complainant/Appellant on the ground
H that the verification was not signed by the counsel, could not be termed to be
NARSINGH DAS TAPADIA v. G.D. PARTANI [SETHI, J.] 173

an action of the Magistrate taking cognizance within the meaning of Section A
142 of the Act. No cognizance was taken on 8.11.1994, but the Magistrate is
shown to have applied his mind and taken cognizance only on 17.11.1994.
Therefore, the High Court wrongly held that the complaint is pre-mature and
is liable to be dismissed. [176-D; 177-B-D]

Nirmaljit Singh Hoon v. The State of West Bengal & Anr., [197313 SCC B
753 and D. Lakhsminarayana Reddy & Ors. v. Narayana Reddy & Ors., AIR
(1976) SC 1672, referred to.

4. The respondent has paid the entire sum to the appellant. Therefore,
no useful purpose would be served by sending the respondent back to_ jail.
Accordingly, the sentence of imprisonment awarded to the respondent is C
substituted with the imposition of fine of Rs. 5, 000 to be deposited within two
months. [177-F-H]

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 752
of2000.
D
From the Judgment and Order dated l 0.2.99 of the Andhra Pradesh High
Court in Crl.R.C. No. 389of1997.

... K. Murthi Rao, D. Mahesh Babu, Ms. T. Anamika, Guntur Prabhakar and
R.N. Keshwani for the appearing parties.
E
The Judgment of the Court was delivered by

SETHI, J. Leave granted.

On proof of charge, the respondent was convicted by the Trial Court
under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred F
to as "the Act") and sentenced to undergo simple imprisonment for six
months. His appeal was dismissed by the Appellate Court confirming the
conviction and sentence passed by the Trial Court. However, in revision, the
High Court set aside the judgment of the Trial Court as well as the Appellate
Court holding that the complaint filed against the respondent was pre-mature.

The facts of the case are that the respondent borrowed a sum of
G
Rs.2,30,000 from the appellant and issued a post-dated cheque in his favour.
When the cheque was presented for demand on 3.10.1994, the same was
dishonoured by the bank on .6.10.1994 due to "insufficient funds". The
appellant demanded the accused to repay the amount vide his telegrams sent
on 7.10.1994,and 17.10.19cJ4. A notice was also issued to the respondent on H
174 SUPREME COURT REPORTS [2000) SUPP. 3 S.C.R.

A 19.10.1994 demanding to repay the amount. Despite receipt of the notice on
26th October, 1994, the respondent neither paid the amount nor gave any
reply. To prove his case, the complainant/ appellant examined three witnesses
and proved documents Exhibits P-1 to P-6. In his statement under Section 313
of the Cr.P.C. the respondent denied the allegations but refused to lead any
B defence evidence. Oh analysis of the evidence and after hearing the counsel
for the parties, the Trial Court concluded as under:

"The complainant established that the accused borrowed Rs. 2,30,000
from him and the accused issued Ex.P3; cheque and the cheque was
returned due to insufficiency of funds and the accused did not repay
the amount inspite of receipt of notice from the complainant and
c hence the accused is liable for punishment u/s 138 of N.I. Act."

As noticed earlier, the appeal filed by the respondent was dismissed on
19th April, i 997. The High Court found that as the notice intimating the
dishonourment of cheque was served upon the accused on 26th October,
D 1994, the complainant/appellant could not file the complaint unless the expiry
of I 5 days period. It was found on facts that the complaint filed on 8.1 I. I 994
was returned after finding some defect in it. However, when re-filed, the court
took the cognizance on l 7. l l.l 994. The High Court held that the original
complaint having been filed on 8.11.1994 was pre-mature and liable to be
dismissed.
E
Section 142 of the Act provides:

"Cognizance of offences- Notwithstanding anything contained in
the Code of Criminal Procedure, 1973 (2of1974), -

(a) no court shall take cognizance of any offence punishable under
F Section 138 except upon a complaint, in writing, made by Ln•
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
G Section 138;
(c) no court inferior to that ofa Metropolitan Magistrate or a Judicial
Magistrate of the first class shall try any offence punishable
under Section 138."

H Sub-section (c) of Sectiofl 13 8 which makes the dishonour of cheque an
NARSINGH DAS TAPADIA v. G.D. PARTANI [SETHI, J.] 175
offence provides that nothing contained in the Section shall apply unless: A
"(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 purposes of this section, 'debt or other liability'
B
meano a legally enforceable debt or other liability."
The compliance of clause (c) of proviso to Section 138 enables the
Court to entertain a complaint. Clause (b) of Section 142 prescribes a period
within which the complaint can be filed from the date of the cause of action
arising under clause (c) of the proviso to Section 138. No period is prescribed c

-
before which the complaint cannot be filed, and if filed not disclosing the
cause of action in terms of clause ( c) of the proviso to Section 138, the Court
may not take cognizance till the time the cause of action arises to the
complainant.
"Taking cognizance of an offence" by the court has to be distinguished D
from the filing of the complaint by the complainant. Taking cognizance would
mean the action taken by the court for initiating judicial proceedings against
the offender in respect of the offence regarding which the complaint is filed.
Before it can be said that any Magistrate or Court has taken cognizance of
an offence it must be shown, that he has applied his mind to the facts for E
the purpose of proceeding further in the matter at the instance of the
complainant. If the Magistrate or the Court is shown to have applied the mind
not for the purpose of taking action upon the complaint but for taking some
other kind of action contemplated under the Code of Criminal Procedure such
as ordering investigation under Section 156(3) or issuing a search warrant, he
cannot be said to have taken cognizance of the offence Narayandas F
Bhagwandas Madhavdas v. State of West Bengal, AIR (1959) SC 1118; and
Gopa/ Das Sindhi & Ors. v. State of Assam & Anr., AIR (1961) SC 986.
This Court in Nirmaljit Singh Hoon v. The State a/West Bengal & Anr.,
[1973] 3 sec 753 observed:
G
"Under Section 190 of the Code of Criminal Procedure, a Magistrate
can take cognizance of an offence, either on receiving a complaint or
on a police report or on information otherwise received. Where a
complaint is presented before him, he can under Section 200 take
cognizance of the offence made out therein and has then to examine
_,. the complaint and his witnesses. The object of such examination is to H
176 SUPREME COURT REPORTS [1998] 1 S.C.R.

A ascertain whether there is a prima facie case against the person accused
of the offence in the complaint, and to preve.nt the issue of process
on a complaint which is either false or vexatious or intended only to
harass such a person. Such examination is provided therefore to find
out whether there is or not sufficient ground for proceeding. Under
Section 202, a Magistrate, on receipt of a complaint, may postpone the
B issue of process and either inquire into the case himself or direct an
inquiry to be made by a Magistrate subordinate to him or by a police
officer for ascertaining its truth or falsehood. Under Section 203, he
may dismiss the complaint; if, after taki.ng the statement of the
complainant and his witnesses and the result of the investigation, if
c any, under Section 202, there is in his judgment 'no sufficient ground
for proceeding'."

D
Mete presentation of the complaint in the court cannot be held to mean,
that its cognizance had been taken by the Magistrate. If the complaint is
found to be pre-mature, it can await maturity or be returned to the complainant
for filing later and its mere presentation at an earlier date need not necessarily
-
render the complaint liable to be dismissed or confer any right upon the
accused to absolve himself from the criminal liability for the offence committed.
Again this Court in D. Lakshminarayana Reddy & Ors. v. V Narayana Reddy
& Ors., AIR (1976) SC 1672 dealt with the issue and observed:
E
"What is meant by 'taking cognizance of an offence' by the Magistrate
within the contemplation of Section 190 ? This expression has not
been defined in the Code. But from the scheme of the Code, the
content and marginal heading of Section 190 and the caption of
Chapter XIV under which Sections 190 to 199 occur, it is clear that a
F case can be said to be instituted in a Court only when the Court ~~lees
cognizance of the offence alleged therein. The ways. in which such
cognizance can be taken are set out in clauses (a), (b) and (c) of
Section 190( 1). Whether the Magistrate has or has not taken cognizance
of the offence will depend on the circumstances of the particular case
including the mode in which the case is sought to be instituted, and
G
the nature of the preliminary action, if any, taken by the Magistrate.
Broadly speaking, when on receiving a complaint, the Magistrate
applies his mind for the purposes of proceeding under Section 200
and the succeeding sections in Chapter XV of the Code of 1973, he

-
is said to have taken cognizance of the offence within the meaning
H of Section 190(1 )(a). If instead of proceeding under Chapter XV, he,
NARSINGH DAS TAPADIA v. G.D. PARTANI [SETHI, J.] 177
has in the judicial exercise of his discretion, taken action of some A
other kind, such as issuing a search warrant for the purpose of
investigating, or ordering investigation by the police under Section
156(3), he cannot be said to have taken cognizance of any offence."

In the instant case mere presentation of the complaint on 8.11.1994
when it was returned to the complainant/ appellant on the ground that the B
verification was not signed by the counsel, could not be termed to be an
action of the magistrate taking cognizance within the meaning of Section 142
of the Act. The High Court appears to have committed not only mistake of

.. law but a mistake of fact as well. No cognizance was taken on 8.11.1994, but
the Magistrate is shown to have applied his minu and taken cognizance only C
on 17 .11.1994. The learned Judge of the High Court, without reference to
various provisions of the Act and the Code of Criminal Procedure, wrongly
held thus:

"The date of filing i.e. 8.11.1994 in this case is crucial.The return of
the complaint filed by the respondent to comply with some objections D
and subsequent filing on 17 .1 l.1994 in this case does not have any.
affect. Therefore, the complaint is pre-mature and is liable to be
dismissed."

As the impugned judgment is based upon wrong assumptions of law
and facts, the same is liable to be set aside. E
In view of what has been stated hereinabove, this appeal is allowed by
setting aside the impugned order, with the result that the conviction of the
respondent under Section 138 of the Act is upheld.

So far as awarding of sentence is concerned, we are inclined to take F
a lenient view in the light of the subsequent developments in the case. The
respondent has filed an affidavit on 24.8.2000 submi~ing that the appellant
has been paid a sum of Rs. 3,94,243.33 which includes the cheque amount and
the interest payable thereon. In support of his submission he has filed
Annexures R-1 and R-2 along with the affidavit. Learned counsel for the G
appellant has admitted the payment of the amount. Thus, we feel that no
useful purpose would be served by sending the respondent back to jail as
the interests of justice would be served by imposing a penalty of fine alone
in the circumstances adverted to above. Accordingly, upon conviction under
Section 138 of the Act, the sentence of imprisonment awarded to the
- '
respondent is substituted with the imposition of fine of Rs. 5,000 to be H
178 SUPREME COURT.REPORTS (2000] SUPP. 3 S.C.R.

A deposited within two months. In case the amount of fine is not deposited
within the time specified, the respondent shall suffer imprisonment of three
months in default thereof.

T.N.A. Appeal allowed.

.