Part payment after notice in cheque dishonour case does not absolve from...

Part payment after notice in cheque dishonour case does not absolve from legal liability: Calcutta HC

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Calcutta high court has held that simply because a part payment was received by the complainant after issuance of statutory notice in a cheque bounce case is not enough to deviate from the cause of action. Merely because the accused has paid some amount of the cheque after receiving statutory notice, that will not absolve him from the legal enforceable liability. These directions were issued by a single-judge bench of Justice Indrajit Chatterjee on 6 December 2016 in the case of Hazi Jahangir Molla. Vs. Md. Alim Mallick & Anr [C.R.R. 856 of 2013 with C.R.A.N. 1728 of 2016].

In this case, the complainant had given on 30/12/1999, an advance of Rs.2,85,000/- to the accused by cash. On the same day, the accused issued a cheque drawn on Allahabad Bank, Dakshin Jhapordah Branch, P.S. Domjur, District- Howrah, covering an amount of Rs.2,85,000/-, but with a request that the cheque should be deposited in bank at least after 10 days. The complainant presented the cheque in the bank after 12 days but it was dishonoured on 17/01/2004 due to insufficiency of funds, and the complainant received the returned memo from his banker on 20/01/2000. Thereafter, the complainant issued the notice as contemplated under the Negotiable Instruments Act but even though the notice was received, it was not replied. However, meanwhile, the accused paid Rs.1,00,000/-. A complaint was filed in court under Section 138 of the N.I. Act.

The trial court convicted the accused and directed him to suffer simple imprisonment for 4 months and directed to pay fine of Rs.2,85,000/- and in default to suffer imprisonment for one month and further directed on realisation of fine amount, the same would go to the complainant. The judgment was assailed before the Sessions Court and it was decided by the 2nd Additional Sessions Judge, Howrah wherein the appellate court affirmed the said judgement.

A revision application was filed under Section 401 read with Section 482 of the Code of Criminal Procedure before the high court.

It was argued by the accused that the cause of action came down to Rs.1,85,000/- as after receipt of the notice accused paid Rs. 1 lakh and that was duly accepted by the complainant before filing of the complaint on March 14, 2000 and as such demand notice was defective and a separate demand notice ought to have been issued. Regarding the part payment, a Single Bench decision of the Kerala High Court in the case of Shiju K. Vs. Nalini and Anr., 2016 (3) AICLR 214 (Ker.), was cited.

However, the Calcutta high court held that the decision of Kerala High Court as passed in Shiju K. case can have only persuasive value as it is a decision of the other High Courts. The Court held that there are other decisions on the issue of part payment, such as Synergy Credit Corporation Ltd. Vs. Midland Industries Ltd., 2006 Cri LJ 3276 (Madras) and Andhra Engineering Corpn. Vs. TCI Finance Ltd., 1999 (3) Crimes 504, holding that merely because the accused has paid some amount of the cheque but that will not absolve him from the legal enforceable liability. The Court also relied upon a decision of the Bombay High Court in the case of Vishnu Bhat Vs/. Narayan R. Bandekar and Others, 008 (2) ICC 494, wherein the Single Bench of the Bombay High Court held that once the cheque is dishonoured, the offence is committed and any payment subsequent thereto will not absolve the accused of liability of criminal offence. Thus, the court held that simply because a part payment was received by the complainant after issuance of statutory notice in a cheque bounce case is not enough to deviate from the cause of action.

On the issue of limitation, Calcutta high court held that since part payment of Rs.1 lakh was made on 11.03.2000 (after receipt of notice), it is the starting time of the period of limitation. The complaint was filed within three days of that, i.e., on 14.03.2000 and as such the complaint was filed perfectly within time.

The high court confirmed the conviction of the accused, however, it changed the sentence. The substantive sentence was reduced from 4 months Simple Imprisonment to 10 days. The fine was converted as compensation but the amount was increased to Rs.3,70,000/- being double of the amount of Rs.1,85,000/-. If this amount was not paid then the accused would have to suffer further Simple Imprisonment for one year more.

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