At, High Court of Judicature at Bombay
By, THE HON'BLE MR. JUSTICE F.I. REBELLO
Mr.V.G. Muzumdar, for the Applicants. Mr.R.Y. Mirza, A.P.P.for State.
Writ petition came to be dismissed on 26-11-1998. A Review petition has been filed against the said dismissal. Assuming that the a Review in the Criminal Writ Petition is maintainable, the point sought to be contested by the Review applicant is being dealt with and decided in view of the arguments advanced. The Review Applicant was the petitioner in Writ Petition No.39/98. The said writ petition was directed against the issuance of process Under Section 138 of the Negotiable Instruments Act,1881.
2.The learned Counsel for the petitioner contends that in a case where proceedings, including a complaint are initiated against a company in respect of which proceedings are registered Under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1993 (hereinafter referred to as SICA) before the Board or before the Appellate Authority no criminal complaint can be filed without taking permission of the Board or Appellate Authority. It is contended that in such an event it is not a debt recoverable under the explanation to Section 138 of the Negotiable Instruments Act and if it be a debt that can only be done by taking permission of the Board or Appellate Authority Under Section 138 of the Negotiable Instruments Act. I am unable to agree with the said contention. Once it is proved that the cheque was issued, and it is presented and dishonoured it shows prima facie indebtedness. Burden is on the person denying to prove that no amount is due and payable or not legally recoverable. Filing of proceedings before B.I.F.R. or Appellate Authority does not make the debt non-recoverable. In suits or other legal proceedings contemplated by Section 22 of SICA, no proceedings can be filed or continued without the permission of the Board. Such proceedings will not include criminal proceedings as has been held in the judgment dated 3rd December, 1998 in the case of Mardia Copper Products Ltd. & ors. vs. Commissioner of Sales Tax, Bombay & Anr., in Criminal Application No.3018 of 1998.
3.It was sought to be contended that when the proceedings are registered against the Company Under Section 22 of the SICA, the explanation to Section 138 of the Negotiable Instruments Act would make the debt legally unenforceable and consequently a complaint cannot be maintained if the cheque is dishonoured unless the consent is obtained of BIPR or the Appellate Authority as the case may be. Reliance has also been placed on K.J. Aaiyar's Judicial Dictionary to the expression 'debt'. The said Dictionary defines 'debt' as under:-
"Debt is a pecuniary liability. A sum payable or recoverable by action in respect of money demand. It refers to the definition given by Lindey L.J. in web v. Stention(1888 QBD 518).... a debt is a sum of money which is now payable or will become payable in future by reason of a present obligation."
4. It is, therefore, contended that if debt is not presently recoverable no offence Under Section 138 can be spelt out. On proceedings being registered the debt is not legally payable and, therefore, no complaint will be maintainable. I am unimpressed. Chapter 18 which includes Section 138, was inserted by the Banking Public Financial Institutions and Negotiable Instrument Laws (Amendment) Act 1988 with effect from 1-4-1989. It is central legislation. Section 138 of the Negotiable Instruments Act requires that where a 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 discharged either because the amount of money standing to the credit of that account is insufficient or it exceeds the amount arranged to be paid from that account by an agreement made with the bank, such person shall be deemed to have committed an offence. There are provisos which contemplate fulfillment of some other conditions. This includes the presentation of cheque within a period of six months from the date on which it was drawn or within the period of its validity and or in due course makes a demand for the payment of the said amount of money. A notice is required to be give 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. If within such time 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 offence is complete. Complaint has to be filed within the terms stipulated under the Act. SICA is also a Central Legislation enacted in the year 1985 which came into force with effect from 12-1-1987. The amendment which was referred to namely Section 22 wherein the words "and no suit for recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans, or advance granted to the industrial company" was introduced by the Sick Industrial Companies (Special Provisions) Act, 1993. The only effects of the said amendment is that whereas earlier proceedings for winding or for execution, distress or like against the assets of the company could not be initiated without the permission, consequent to the amendment, no suit for recovery of money or enforcement can be instituted without permission or continued if instituted. This to my mind makes no difference whatsoever. Under Section 22 recoveries in the nature of civil debts are prohibited except as provided therein. Section 138 of the Negotiable Instruments Act makes dishonour of a cheque a criminal offence. SICA does not create a bar of making a demand. The explanation Under Section 138 can be of no assistance for the argument sought to be advanced as all that the explanation says is debt or other liability, means a legally enforceable debt or other liability. Section 22 of SICA only puts an embargo on suing. The explanation to Section 138 of the Negotiable Instruments Act does not have the effect or making ineffective the provisions of Section 138 of the Negotiable Instruments Act.When there are two Central Legislations in the field, both Acts of Parliament it is presumed that Parliament was aware of the position. Learned Counsel then points to the provisions of Section 32 of SICA which says that the provisions of this Act and of any rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973 and the Urban Land (Ceiling and Regulation) Act, 1976. This argument has also to be rejected. If the argument of learned Counsel is to be accepted then provisions of Indian Penal Code, offences involved when money is involving will stand excluded on account of the Sick Industrial Companies (Special Provisions) Act, 1985. Take
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the present case. Under what provision is the Board's or Appellate Authority permission required or must a person seeking to give information to the police of a cognizable offence have to first apply to the Board or Appellate Authority for permission to maintain the complaint. This would be reading something in SICA which the express language does not provide for. In the light of that there is no substance in that contention. 5.In the light of that there is no merit in this Review Application which is accordingly rejected. 6.Learned Counsel for the applicants seeks stay of the order for the order for a period of 8 weeks. Considering the facts and circumstances the proceedings before the Magistrate are stayed for a period of 8 weeks from day.