Dashrath Requires a Second Read; Goodbye, Mr. Lodha!

By Rudrajyoti Nath Ray, Senior Associate

In our post entitled “The Territorial Jurisdiction Conundrum”, we discussed how the Division Bench, in Dashrath, cleverly interpreted the “Harman Approach” and its effect on the “Bhaskaran Ratio”. It was fairly concluded by the SC 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. “The territorial jurisdiction conundrum” arose only because Bhaskaran treated the proviso to Section 138 as stipulating the ingredients of the offence.

Recently in Yogendra Pratap Singh v. Savitri Pandey (“Yogendra”), a Full Bench of the SC, while answering under reference, that, “the complaint under Section 138 of the NI Act, filed before the expiry of 15 days of service of notice cannot be treated as a complaint in the eyes of the law and criminal proceedings initiated on such complaint are liable to be quashed” 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 Section138.”

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 Division Bench – 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.”

Dashrath has produced wide spread ramifications in cheque bouncing matters. The outgoing Chief Justice of India may have made a slight inroad for one to question Dashrath in an appropriate case. Surely Hon’ble Chief Justice of India Rajendra Mal Lodha is aware of that eventuality.

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