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Friday, December 5, 2014

Review Jurisdiction : To be Sparingly Exercised

Justice P. Sathasivam
Supreme Court of India
The Supreme Court in the case of Kamlesh Verma v. Mayawati & Ors. 2013 (8) SCC 320 has eruditely discussed the law relating to exercise of powers of review by a Civil court. While citing various precedents on the subject, the Supreme Court has held that Review Jurisdiction must be exercised sparingly and should not be used as a tool to re-agitate or re-argue matters which stand conclusively decided by the Courts. While holding so, the Supreme Court has observed as under: 

"Discussion:

4. The only point for consideration in this petition is whether the review Petitioner has made out a case for reviewing the judgment and order dated 06.07.2012 and satisfies the criteria for entertaining the same in review jurisdiction?

Review Jurisdiction:

5. Article 137 of the Constitution of India provides for review of judgments or orders by the Supreme Court which reads as under:

Subject to the provisions of any law made by Parliament or any rules made under Article 145, the Supreme Court shall have power to review any judgment pronounced or order made by it.

6. Order XLVII, Rule 1(1) of the Code of Civil Procedure, 1908, provides for an application for review which reads as under:

Any person considering himself aggrieved:--

a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred,

b) by a decree or order from which no appeal is allowed, or

c) by a decision on a reference from a Court of Small Causes, and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment to the court which passed the decree or made the order.

7. Further, Part VIII Order XL of the Supreme Court Rules, 1966 deals with the review and consists of four rules. Rule 1 is important for our purpose which reads as under:

The Court may review its judgment or order, but no application for review will be entertained in a civil proceeding except on the ground mentioned in Order XLVII Rule 1 of the Code and in a criminal proceeding except on the ground of an error apparent on the face of the record.

8. This Court has repeatedly held in various judgments that the jurisdiction and scope of review is not that of an appeal and it can be entertained only if there is an error apparent on the face of the record. A mere repetition through different counsel, of old and overruled arguments, a second trip over ineffectually covered grounds or minor mistakes of inconsequential import are obviously insufficient. This Court, in Sow Chandra Kante and Anr. v. Sheikh Habib MANU/SC/0064/1975 : (1975) 1 SCC 674, held as under:
1. Mr. Daphtary, Learned Counsel for the Petitioners, has argued at length all the points which were urged at the earlier stage when we refused special leave thus making out that a review proceeding virtually amounts to a re-hearing. May be, we were not right is refusing special leave in the first round; but, once an order has been passed by this Court, a review thereof must be subject to the rules of the game and cannot be lightly entertained. A review of a judgment is a serious step and reluctant resort to it is proper only where a glaring omission or patent mistake or like grave error has crept in earlier by judicial fallibility. A mere repetition, through different counsel, of old and overruled arguments, a second trip over ineffectually covered ground or minor mistakes of inconsequential import are obviously insufficient. The very strict need for compliance with these factors is the rationale behind the insistence of counsel's certificate which should not be a routine affair or a habitual step. It is neither fairness to the Court which decided nor awareness of the precious public time lost what with a huge backlog of dockets waiting in the queue for disposal, for counsel to issue easy certificates for entertainment of review and fight over again the same battle which has been fought and lost. The Bench and the Bar, we are sure, are jointly concerned in the conservation of judicial time for maximum use. We regret to say that this case is typical of the unfortunate but frequent phenomenon of repeat performance with the review label as passport. Nothing which we did not hear then has been heard now, except a couple of rulings on points earlier put forward. May be, as counsel now urges and then pressed, our order refusing special leave was capable of a different course. The present stage is not a virgin ground but review of an earlier order which has the normal feature of finality.
9. In a criminal proceeding, review is permissible on the ground of an error apparent on the face of the record. A review proceeding cannot be equated with the original hearing of the case. In M/s. Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi MANU/SC/0445/1979 : (1980) 2 SCC 167, this Court, in paragraph Nos. 8 & 9 held as under:
8. It is well-settled that a party is not entitled to seek a review of a judgment delivered by this Court merely' for the purpose of a rehearing and a fresh decision of the case. The normal principle is that a judgment pronounced by the Court is final, and departure from that principle is justified only when circumstances of a substantial and compelling character make it necessary to do so: Sajjan Singh v.State of Rajasthan. For instance, if the attention of the Court is not drawn to a material statutory provision during the original hearing, the Court will review its judgment: G.L. Gupta v. D.N. Mehta. The Court may also reopen its judgment if a manifest wrong has been done and it is necessary to pass an order to do full and effective justice: O.N. Mohindroo v. Distt. Judge, Delhi. Power to review its judgments has been conferred on the Supreme Court by Article 137 of the Constitution, and that power is subject to the provisions of any law made by Parliament or the rules made under Article 145. In a civil proceeding, an application for review is entertained only on a ground mentioned in Order 47 Rule1 of the Code of Civil Procedure, and in a criminal proceeding on the ground of an error apparent on the face of the record (Order 40 Rule 1, Supreme Court Rules, 1966). But whatever the nature of the proceeding, it is beyond dispute that a review proceeding cannot be equated with the original hearing of the case, and the finality of the judgment delivered by the Court will not be reconsidered except "where a glaring omission or patent mistake or like grave error has crept in earlier by judicial fallibility": Sow Chandra Kante v. Sheikh Habib. 
9. Now, besides the fact that most of the legal material so assiduously collected and placed before us by the learned Additional Solicitor General, who has now been entrusted to appear for the Respondent, was never brought to our attention when the appeals were heard, we may also examine whether the judgment suffers from an error apparent on the face of the record. Such an error exists if of two or more views canvassed on the point it is possible to hold that the controversy can be said to admit of only one of them. If the view adopted by the Court in the original judgment is a possible view having regard to what the record states, it is difficult to hold that there is an error apparent on the face of the record.
10. Review of the earlier order cannot be done unless the court is satisfied that material error, manifest on the face of the order, undermines its soundness or results in miscarriage of justice. This Court, in Col. Avtar Singh Sekhon v. Union of India and Ors. MANU/SC/0416/1980 : 1980 (Supp) SCC 562, held as under:
12. A review is not a routine procedure. Here we resolved to hear Shri Kapil at length to remove any feeling that the party has been hurt without being heard. But we cannot review our earlier order unless satisfied that material error, manifest on the face of the order, undermines its soundness or results in miscarriage of justice. In Sow Chandra Kante v. Sheikh Habib this Court observed:
A review of a judgment is a serious step and reluctant resort to it is proper only where a glaring omission or patent mistake or like grave error has crept in earlier by judicial fallibility.... The present stage is not a virgin ground but review of an earlier order which has the normal feature of finality.
11. An error which is not self-evident and has to be detected by a process of reasoning can hardly be said to be an error apparent on the face of the record justifying the Court to exercise its power of review. A review is by no means an appeal in disguise whereby an erroneous decision is re-heard and corrected, but lies only for patent error. This Court, in Parsion Devi and Ors. v. Sumitri Devi and Ors. MANU/SC/1360/1997 : (1997) 8 SCC 715, held as under:
7. It is well settled that review proceedings have to be strictly confined to the ambit and scope of Order 47 Rule 1 Code of Civil Procedure. In Thungabhadra Industries Ltd. v. Govt. of A.P. this Court opined: 
"What, however, we are now concerned with is whether the statement in the order of September 1959 that the case did not involve any substantial question of law is an "error apparent on the face of the record'). The fact that on the earlier occasion the Court held on an identical state of facts that a substantial question of law arose would not per se be conclusive, for the earlier order itself might be erroneous. Similarly, even if the statement was wrong, it would not follow that it was an 'error apparent on the face of the record', for there is a distinction which is real, though it might not always be capable of exposition, between a mere erroneous decision and a decision which could be characterised as vitiated by 'error apparent'. A review is by no means an appeal in disguise whereby an erroneous decision is reheard and corrected, but lies only for patent error.
(emphasis ours) 
8. Again, in Meera Bhanja v. Nirmala Kumari Choudhury while quoting with approval a passage from Aribam Tuleshwar Sharma v. Aribam Pishak Sharma this Court once again held that review proceedings are not by way of an appeal and have to be strictly confined to the scope and ambit of Order 47 Rule 1 Code of Civil Procedure. 
9. Under Order 47 Rule 1 Code of Civil Procedure a judgment may be open to review inter alia if there is a mistake or an error apparent on the face of the record. An error which is not self-evident and has to be detected by a process of reasoning, can hardly be said to be an error apparent on the face of the record justifying the court to exercise its power of review under Order 47 Rule 1 Code of Civil Procedure. In exercise of the jurisdiction under Order 47 Rule 1 Code of Civil Procedure it is not permissible for an erroneous decision to be "reheard and corrected". A review petition, it must be remembered has a limited purpose and cannot be allowed to be "an appeal in disguise.
12. Error contemplated under the rule must be such which is apparent on the face of the record and not an error which has to be fished out and searched. It must be an error of inadvertence. The power of review can be exercised for correction of a mistake but not to substitute a view. The mere possibility of two views on the subject is not a ground for review. This Court, in Lily Thomas and Ors. v. Union of India and Ors. MANU/SC/0327/2000 : (2000) 6 SCC 224, held as under:
54. Article 137 empowers this Court to review its judgments subject to the provisions of any law made by Parliament or any rules made under Article 145 of the Constitution. The Supreme Court Rules made in exercise of the powers under Article 145 of the Constitution prescribe that in civil cases, review lies on any of the grounds specified in Order 47 Rule 1 of the Code of Civil Procedure which provides: 
"1. Application for review of judgment.--(1) Any person considering himself aggrieved:--
(a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred,
(b) by a decree or order from which no appeal is allowed, or
(c) by a decision on a reference from a Court of Small Causes,
and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment to the court which passed the decree or made the order. 
Under Order XL Rule 1 of the Supreme Court Rules no review lies except on the ground of error apparent on the face of the record in criminal cases. Order XL Rule 5 of the Supreme Court Rules provides that after an application for review has been disposed of no further application shall be entertained in the same matter. 
56. It follows, therefore, that the power of review can be exercised for correction of a mistake but not to substitute a view. Such powers can be exercised within the limits of the statute dealing with the exercise of power. The review cannot be treated like an appeal in disguise. The mere possibility of two views on the subject is not a ground for review. Once a review petition is dismissed no further petition of review can be entertained. The rule of law of following the practice of the binding nature of the larger Benches and not taking different views by the Benches of coordinated jurisdiction of equal strength has to be followed and practised. However, this Court in exercise of its powers under Article 136 or Article 32 of the Constitution and upon satisfaction that the earlier judgments have resulted in deprivation of fundamental rights of a citizen or rights created under any other statute, can take a different view notwithstanding the earlier judgment. 
58. Otherwise also no ground as envisaged under Order XL of the Supreme Court Rules read with Order 47 of the Code of Civil Procedure has been pleaded in the review petition or canvassed before us during the arguments for the purposes of reviewing the judgment in Sarla Mudgal case, MANU/SC/0290/1995 : (1995) 3 SCC 635 it is not the case of the Petitioners that they have discovered any new and important matter which after the exercise of due diligence was not within their knowledge or could not be brought to the notice of the Court at the time of passing of the judgment. All pleas raised before us were in fact addressed for and on behalf of the Petitioners before the Bench which, after considering those pleas, passed the judgment in Sarla Mudgal case. We have also not found any mistake or error apparent on the face of the record requiring a review. Error contemplated under the rule must be such which is apparent on the face of the record and not an error which has to be fished out and searched. It must be an error of inadvertence. No such error has been pointed out by the Learned Counsel appearing for the parties seeking review of the judgment. The only arguments advanced were that the judgment interpreting Section 494 amounted to violation of some of the fundamental rights. No other sufficient cause has been shown for reviewing the judgment. The words "any other sufficient reason appearing in Order 47 Rule 1 Code of Civil Procedure" must mean "a reason sufficient on grounds at least analogous to those specified in the rule" as was held in Chhajju Ram v. Neki MANU/PR/0006/1922 : AIR 1922 PC 112 and approved by this Court in Moran Mar Basselios Catholicos v. Most Rev. Mar Poulose AthanasiusMANU/SC/0003/1954 : AIR 1954 SC 526 Error apparent on the face of the proceedings is an error which is based on clear ignorance or disregard of the provisions of law. In T.C. Basappa v. T. Nagappa MANU/SC/0098/1954 : AIR 1954 SC 440 this Court held that such error is an error which is a patent error and not a mere wrong decision. In Hari Vishnu Kamath v. Ahmad IshaqueMANU/SC/0095/1954 : AIR 1955 SC 233, it was held: 
[I] It is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record. The real difficulty with reference to this matter, however, is not so much in the statement of the principle as in its application to the facts of a particular case. When does an error cease to be mere error, and become an error apparent on the face of the record? Learned Counsel on either side were unable to suggest any clear-cut rule by which the boundary between the two classes of errors could be demarcated. 
Mr. Pathak for the first Respondent contended on the strength of certain observations of Chagla, C.J. in - Batuk K. Vyas v. Surat Borough Municipality MANU/MH/0088/1953 : AIR 1953 Bom 133 that no error could be said to be apparent on the face of the record if it was not self-evident and if it required an examination or argument to establish it. This test might afford a satisfactory basis for decision in the majority of cases. Hut there must be cases in which even this test might break down, because judicial opinions also differ, and an error that might be considered by one Judge as self-evident might not be so considered by another. The fact is that what is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case. 
Therefore, it can safely be held that the Petitioners have not made out any case within the meaning of Article 137 read with Order XL of the Supreme Court Rules and Order 47 Rule 1 Code of Civil Procedure for reviewing the judgment in Sarla Mudgal case. The petition is misconceived and bereft of any substance.
13. In a review petition, it is not open to the Court to re-appreciate the evidence and reach a different conclusion, even if that is possible. Conclusion arrived at on appreciation of evidence cannot be assailed in a review petition unless it is shown that there is an error apparent on the face of the record or for some reason akin thereto. This Court, in Kerala State Electricity Board v. Hitech Electrothermics and Hydropower Ltd. and Ors. MANU/SC/0477/2005 : (2005) 6 SCC 651, held as under:
10....In a review petition it is not open to this Court to reappreciate the evidence and reach a different conclusion, even if that is possible. Learned Counsel for the Board at best sought to impress us that the correspondence exchanged between the parties did not support the conclusion reached by this Court. We are afraid such a submission cannot be permitted to be advanced in a review petition. The appreciation of evidence on record is fully within the domain of the appellate court. If on appreciation of the evidence produced, the court records a finding of fact and reaches a conclusion, that conclusion cannot be assailed in a review petition unless it is shown that there is an error apparent on the face of the record or for some reason akin thereto. It has not been contended before us that there is any error apparent on the face of the record. To permit the review Petitioner to argue on a question of appreciation of evidence would amount to converting a review petition into an appeal in disguise.
14. Review is not re-hearing of an original matter. The power of review cannot be confused with appellate power which enables a superior court to correct all errors committed by a subordinate court. A repetition of old and overruled argument is not enough to re-open concluded adjudications. This Court, in Jain Studios Ltd. v. Shin Satellite Public Co. Ltd. MANU/SC/8226/2006 : (2006) 5 SCC 501, held as under:
11. So far as the grievance of the applicant on merits is concerned, the Learned Counsel for the opponent is right in submitting that virtually the applicant seeks the same relief which had been sought at the time of arguing the main matter and had been negatived. Once such a prayer had been refused, no review petition would lie which would convert rehearing of the original matter. It is settled law that the power of review cannot be confused with appellate power which enables a superior court to correct all errors committed by a subordinate court. It is not rehearing of an original matter. A repetition of old and overruled argument is not enough to reopen concluded adjudications. The power of review can be exercised with extreme care, caution and circumspection and only in exceptional cases. 
12. When a prayer to appoint an arbitrator by the applicant herein had been made at the time when the arbitration petition was heard and was rejected, the same relief cannot be sought by an indirect method by filing a review petition. Such petition, in my opinion, is in the nature of "second innings" which is impermissible and unwarranted and cannot be granted.
15. Review proceedings are not by way of an appeal and have to be strictly confined to the scope and ambit of Order XLVII Rule 1 of Code of Civil Procedure. In review jurisdiction, mere disagreement with the view of the judgment cannot be the ground for invoking the same. As long as the point is already dealt with and answered, the parties are not entitled to challenge the impugned judgment in the guise that an alternative view is possible under the review jurisdiction.

Summary of the Principles:

16. Thus, in view of the above, the following grounds of review are maintainable as stipulated by the statute:

(A) When the review will be maintainable:

(i) Discovery of new and important matter or evidence which, after the exercise of due diligence, was not within knowledge of the Petitioner or could not be produced by him;

(ii) Mistake or error apparent on the face of the record;

(iii) Any other sufficient reason.

The words "any other sufficient reason" has been interpreted in Chhajju Ram v.Neki MANU/PR/0006/1922 : AIR 1922 PC 112 and approved by this Court inMoran Mar Basselios Catholicos v. Most Rev. Mar Poulose Athanasius and Ors. MANU/SC/0003/1954 : (1955) 1 SCR 520, to mean "a reason sufficient on grounds at least analogous to those specified in the rule". The same principles have been reiterated in Union of India v. Sandur Manganese and Iron Ores Ltd. and Ors. MANU/SC/0417/2013 : JT 2013 (8) SC 275.

(B) When the review will not be maintainable:

(i) A repetition of old and overruled argument is not enough to reopen concluded adjudications.

(ii) Minor mistakes of inconsequential import.

(iii) Review proceedings cannot be equated with the original hearing of the case.

(iv) Review is not maintainable unless the material error, manifest on the face of the order, undermines its soundness or results in miscarriage of justice.

(v) A review is by no means an appeal in disguise whereby an erroneous decision is reheard and corrected but lies only for patent error.

(vi) The mere possibility of two views on the subject cannot be a ground for review.

(vii) The error apparent on the face of the record should not be an error which has to be fished out and searched.

(viii) The appreciation of evidence on record is fully within the domain of the appellate court, it cannot be permitted to be advanced in the review petition.

(ix) Review is not maintainable when the same relief sought at the time of arguing the main matter had been negatived.

17. Keeping the above principles in mind, let us consider the claim of the Petitioner and find out whether a case has been made out for interference exercising review jurisdiction.

Sunday, April 6, 2014

Vicarious Liability under S. 138 Negotiable Instruments Act : Necessary Averments must be made in Complaint

Justice C.K. Prasad
Supreme Court of India
The Hon'ble Supreme Court in A.K. Singhania Vs. Gujarat State Fertilizer Co. Ltd. & Anr. has reiterated that a complaint under S. 138 read with S. 141 of the Negotiable Instruments Act must necessarily contain specific averments with respect to the role of each Director in cases where a Company is arrayed as an accused. While examining previous decisions on this subject, the Bench has held as under:

16. In case of offence by company for dishonour of cheque, the culpability of the Directors has to be decided with reference to Section 141 of the Act, same reads as follows: 
141. Offences by companies.-(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:  
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:  
Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.  
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.  
Explanation.- For the purposes of this section,-
(a) "company" means any body corporate and includes a firm or other association of individuals; and  
(b) "director", in relation to a firm, means a partner in the firm.” 
17. From a plain reading of the aforesaid provision it is evident that every person who at the time the offence was committed is in charge of and responsible to the Company shall be deemed to be guilty of the offence under Section 138 of the Act. In the face of it, will it be necessary to specifically state in the complaint that the person accused was in charge of and responsible for the conduct of the business of the Company? In our opinion, in the case of offence by Company, to bring its Directors within the mischief of Section 138 of the Act, it shall be necessary to allege that they were in charge of and responsible to the conduct of the business of the Company. It is necessary ingredient which would be sufficient to proceed against such Directors. However, we may add that as no particular form is prescribed, it may not be necessary to reproduce the words of the section. If reading of the complaint shows and substance of accusation discloses necessary averments, that would be sufficient to proceed against such of the Directors and no particular form is necessary. However, it may not be necessary to allege and prove that, in fact, such of the Directors have any specific role in respect of the transaction leading to issuance of cheque. Section 141 of the Act makes the Directors in charge and responsible to Company “for the conduct of the business of the Company” within the mischief of Section 138 of the Act and not particular business for which the cheque was issued. We cannot read more than what has been mandated in Section 141 of the Act. 

18. A large number of authorities of this Court have been cited by the counsel representing the party to bring home their point. We deem it inexpedient to refer to all of them. Suffice it to say that this question has been answered eloquently by a three-Judge Bench decision of this Court in the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89, in the following words: 

“19. In view of the above discussion, our answers to the questions posed in the reference are as under: 

(a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in-charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.” 

20. This Court in the case of National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330, after reviewing all its earlier judgments summarized the legal position as follows: 
“39. From the above discussion, the following principles emerge:  
(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.  
(ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company.  
(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.  
(iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred.  
(v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.  
(vi) If the accused is a Director or an officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in the complaint.  
(vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases.” 
21. In Harshendra Kumar D. v. Rebatilata Koley, (2011) 3 SCC 351, after referring to its earlier decisions in S.M.S. Pharmaceuticals Ltd.(supra), National Small Industries Corpn. Ltd.(supra), N. Rangachari v. Bharat Sanchar Nigam Ltd., (2007) 5 SCC 108 and K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48, this Court reiterated the same view. 

22. We have found on fact that there is no averment that the two accused herein were in charge of and responsible for the conduct of the business of the company at the time the offence was committed. Hence, there is no essential averment in the complaints. In view of what we have observed above, the prosecution of accused A.K. Singhania and accused Vikram Prakash cannot be allowed to continue. Accordingly, the order of the High Court quashing the prosecution of the accused Vikram Prakash is not fit to be interfered with. For the same reason the order passed by the High Court declining the prayer of A.K. Singhania for quashing of the prosecution cannot be sustained and the appeals preferred by him deserve to be allowed. 

23. In the result, we dismiss the appeals preferred by the complainant Gujarat State Fertilizers Company Ltd. and allow the appeals preferred by A.K. Singhania and quash his prosecution in all these cases.

Thursday, September 12, 2013

Date on which Cause of Action Arose to be Excluded from Limitation in 'Cheque Bounce' cases : Supreme Court holds

Justice Ranjana P. Desai
Supreme Court of India
A 3 Judge Bench of the Supreme Court in Econ Antri Ltd. Vs. Rom Industries Ltd. & Anr. has recently answered a reference whether for calculating the period of one month which is prescribed under Section 142(b) of the Negotiable Instruments Act, the period has to be reckoned by excluding the date on which the cause of action arose?. While answering the reference, the Supreme Court held as under:

On 13/10/2006, while granting leave in Special Leave Petition (Criminal) No.211 of 2005, this Court passed the following order: 
“In our view, the judgment relied upon by the counsel for the appellant in the case of Saketh India Ltd. & Ors. v. India Securities Ltd. (1999) 3 SCC 1 requires reconsideration. Orders of the Hon’ble the Chief Justice may be obtained for placing this matter before a larger Bench.” 
Pursuant to the above order, this appeal is placed before us. 

2. Since the referral order states that the judgment of this Court in Saketh India Ltd. & Ors. v. India Securities Ltd. (1999) 3 SCC 1 (“Saketh”) requires reconsideration, we must first refer to the said judgment. In that case, this Court identified the question of law involved in the appeal before it as under: 
“Whether the complaint filed under Section 138 of the NI Act is within or beyond time as it was contended that it was not filed within one month from the date on which the cause of action arose under clause (c) of the proviso to Section 138 of the NI Act?” 
The same question was reframed in simpler language as under: 
“Whether for calculating the period of one month which is prescribed under Section 142(b), the period has to be reckoned by excluding the date on which the cause of action arose?” 
3. It is pointed out to us that there is a variance between the view expressed by this Court on the above question in Saketh and in SIL Import, USA v. Exim Aides Silk Exporters, Bangalore (1999) 4 SCC 567. We will have to therefore re-examine it for the purpose of answering the reference. The basic provisions of law involved in this reference are proviso (c) to Section 138 and Section 142(b) of the Negotiable Instruments Act, 1881 (“the NI Act”). 

4. Facts of Saketh need to be stated to understand how the above question of law arose. But, before we turn to the facts, we must quote Section 138 and Section 142 of the N.I. Act. We must also quote Section 12(1) and (2) of the Limitation Act, 1963 and Section 9 of the General Clauses Act, 1897, on which reliance is placed in Saketh. Section 138 of the N.I. Act reads as under: 

138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any 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 returned by the bank unpaid. either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: 

Provided that nothing contained in this section shall apply unless- 

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; 

(b) the payee or the holder in due course of the Cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and 

(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.” 

Section 142 of the N.I. Act reads as under: 

142. Cognizance of offences: Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974 ),- 

(a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the 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 section 138; 

[Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.] 

(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.” 

Sections 12(1) and (2) of the Limitation Act, 1963 reads as under: “12. Exclusion of time in legal proceedings.- 

(1) In computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded. 

(2) In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded.” 

Section 9 of the General Clauses Act, 1897 reads as under: 

9. Commencement and termination of time.- 

(1) In any [Central Act] or Regulation made after the commencement of this Act, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time, to use the word “from”, and, for the purpose of including the last in a series of days or any other period of time, to use the word “to”. 

(2) This section applies also to all [Central Acts] made after the third day of January, 1868, and to all Regulations made on or after the fourteenth day of January, 1887.” 

5. In Saketh cheques dated 15/3/1995 and 16/3/1995 issued by the accused therein bounced when presented for encashment. Notices were served on the accused on 29/9/1995. As per proviso (c) to Section 138 of the NI Act, the accused were required to make the payment of the said amount within 15 days of the receipt of the notice i.e. on or before 14/10/1995. The accused failed to pay the amount. The cause of action, therefore, arose on 15/10/1995. According to the complainant for calculating one month’s period contemplated under Section 142(b), the date ‘15/10/1995’ has to be excluded. The complaint filed on 15/11/1995 was, therefore, within time. According to the accused, however, the date on which the cause of action arose i.e. ‘15/10/1995’ has to be included in the period of limitation and thus the complaint was barred by time. The accused, therefore, filed petition under Section 482 of the Code of Criminal Procedure, 1973 (“the Code”) for quashing the process issued by the learned Magistrate. That petition was rejected by the High Court. Hence, the accused approached this Court. This Court referred to its judgment in Haru Das Gupta v. State of West Bengal. (1972) 1 SCC 639 wherein it was held that the rule is well established that where a particular time is given from a certain date within which an act is to be done, the day on that date is to be excluded; the effect of defining the period from such a day until such a day within which an act is to be done is to exclude the first day and to include the last day. Referring to several English decisions on the point, this Court observed that the principle of excluding the day from which the period is to be reckoned is incorporated in Section 12(1) and (2) of the Limitation Act, 1963. This Court observed that this principle is also incorporated in Section 9 of the General Clauses Act, 1897. This Court further observed that there is no reason for not adopting the rule enunciated in Haru Das Gupta, which is consistently followed and which is adopted in the General Clauses Act and the Limitation Act. This Court went on to observe that ordinarily in computing the time, the rule observed is to exclude the first day and to include the last. Following the said rule in the facts before it, this Court excluded the date ‘15/10/1995’ on which the cause of action had arisen for counting the period of one month. Saketh has been followed by this Court in Jindal Steel and Power Ltd. & Anr. v. Ashoka Alloy Steel Ltd. & Ors. (2006) 9 SCC 340 In Subodh S. Salaskar v. Jayprakash M. Shah & Anr., (2008)13 SCC 689 there is a reference to Jindal Steel & Power Ltd. 

6. We have heard learned counsel for the parties at some length. We have also carefully perused their written submissions. Ms. Prerna Mehta, learned counsel for the appellant submitted that Saketh lays down the correct law. She submitted that as held by this Court in Saketh while computing the period of one month as provided under Section 142(b) of the N.I. Act, the first day on which the cause of action has arisen has to be excluded. The same principle is applicable in computing the period of 15 days under Section 138(c) of the N.I. Act. Counsel submitted that Saketh has been followed by this Court in Jindal Steel and Power Ltd. and Subodh S. Salaskar. Counsel also relied on Section 12(1) of the Limitation Act, 1961 which provides that the first day on which cause of action arises is to be excluded. In this connection counsel relied on State of Himachal Pradesh & Anr. v. Himachal Techno Engineers & Anr., (2010) 12 SCC 210 where it is held that Section 12 of the Limitation Act is applicable to the Arbitration and Conciliation Act, 1996 (for short, “the Arbitration Act"), which is a statute providing for its own period of limitation. Counsel submitted that the N.I. Act is a special statute and it does not expressly bar the applicability of the Limitation Act. Counsel submitted that if this Court reaches a conclusion that the provisions of the Limitation Act are not applicable to the N.I. Act, it should hold that Section 9 of the General Clauses Act, 1897 covers this case. Counsel submitted in Tarun Prasad Chatterjee v. Dinanath Sharma(2000) 8 SCC 649 Section 12 of the Limitation Act is held to be in pari materia with Section 9 of the General Clauses Act. Counsel submitted that in the same judgment this Court has held that use of words ‘from’ and ‘within’ does not reflect any contrary intention and the first day on which the cause of action arises has to be excluded. Counsel submitted that in the circumstances this Court should hold that Saketh lays down correct proposition of law. 

7. Shri Sunil Gupta, learned senior counsel for the respondents, on the other hand, submitted that the provisions of the N.I. Act provide for a criminal offence and punishment and, therefore, must be strictly construed. Counsel submitted that it is well settled that when two different words are used in the same provision or statute, they convey different meaning. [The Member, Board of Revenue v. Arthur Paul Benthall AIR 1956 SC 35, The Labour Commissioner, Madhya Pradesh v. Burhanpur Tapti Mills Ltd. and others AIR 1964 SC 1687, B.R. Enterprises etc. V. State of U.P. & Ors. etc. (1999) 9 SCC 700, Kailash Nath Agarwal and ors. v. Pradeshiya Industrial & Investment Corporation of U.P. Ltd. and another(2003) 4 SCC 305, DLF Qutab Enclave Complex Educational Charitable Trust v. State of Haryana and others(2003) 5 SCC 622]. Counsel pointed out that Section 138(a) provides a period of 6 months from the date on which the Cheque is drawn, as the period within which the Cheque is to be presented to the bank. Section 138(b) provides that the payee must make a demand of the amount due to him within 30 days of the receipt of information from the bank. Section 138(c) uses the words ‘within 15 days of the receipt of notice’. Using two different words ‘from’ and ‘of’ in the same Section at different places clarifies the intention of the legislature to convey different meanings by the said words. According to counsel, seen in this light, the word ‘of’ occurring in Section 138(c) and Section 142(b) is to be interpreted differently as against the word ‘from’ occurring in Section 138(a). The word ‘from’ may be taken as implying exclusion of the date in question and may well be governed by the General Clauses Act, 1897. However, the word ‘of’ is different and needs to be interpreted to include the starting day of the commencement of the prescribed period. It is not governed by Section 9 of the General Clauses Act, 1897. Thus, for the purposes of Section 142(b), which prescribes that the complaint is to be filed within 30 days of the date on which the cause of action arises, the starting date on which the cause of action arises should be included for computing the period of 30 days. Counsel further submitted that Section 138(c) and Section 142(b) prescribe the period within which certain acts are required to be done. Section 12(1) of the Limitation Act cannot be resorted to so as to extend that period even by one day. If the starting point is excluded, that will render the word ‘within’ of Section 142(b) of the N.I. Act otiose. Counsel submitted that the word ‘within’ has been held by this Court to mean ‘on or before’. [Danial Latifi and Another v. U.O.I. (2001) 7 SCC 740] Therefore, the complaint under Section 142(b) should be filed on or before or within, 30 days of the date on which the cause of action under Section 138(c) arises. Counsel submitted that there is no justification to exclude the 16th day of the 15 day period under Section 138(c) or the first day of the 30 days period under Section 142(b) as has been wrongly decided in Saketh. This would amount to exclusion of the starting date of the period. Such exclusion has been held to be against the law in SIL Import USA. Counsel further submitted that the provisions of the Limitation Act are not applicable to the N.I. Act as held by this Court in Subodh S. Salaskar. Counsel pointed out that by Amending Act 55 of 2002, a proviso was added to Section 142(b) of the N.I. Act. It bestows discretion upon the court to accept a complaint after the period of 30 days and to condone the delay. This amendment signifies that prior to this amendment the courts had no discretion to condone the delay or exclude time by resorting to Section 5 of the Limitation Act. The statement of objects and reasons of the Amending Act 55 of 2002 confirms the legal position that the N.I. Act being a special statute, the Limitation Act is not applicable to it. Counsel submitted that the judgment of this Court on the Arbitration Act is not applicable to this case because Section 43 of the Arbitration Act specifically makes the Limitation Act applicable to arbitrations. Counsel submitted that in view of the above, it is evident that Saketh does not lay down the correct law. It is SIL Import USA which correctly analyses the provisions of law and lays down the law. Counsel urged that the reference be answered in light of his submissions. 

8. It is necessary to first refer to SIL Import USA on which heavy reliance is placed by the respondents as it takes a view contrary to the view taken in Saketh. In SIL Import USA, the complainant- Company’s case was that the accused owed a sum of US $ 72,075 (equivalent to more than 26 lakhs of rupees) to it towards the sale consideration of certain materials. The accused gave some post-dated Cheques in repayment thereof. Two of the said Cheques when presented on 3/5/1996 for encashment were dishonoured with the remark “no sufficient funds”. The complainant sent a notice to the accused by fax on 11/6/1996. On the next day i.e. 12/6/1996 the complainant also sent the same notice by registered post which was served on the accused on 25/6/1996. On 8/8/1996 the complainant filed a complaint under Section 138 of the N.I. Act. Cognizance of the offence was taken and process was issued. Process was quashed by the Magistrate on the grounds urged by the accused. The complainant moved the High Court. The High Court set aside the Magistrate’s order and restored the complaint. That order was challenged in this Court. The only point which was urged before this Court was that the Magistrate could not have taken cognizance of the offence after the expiry of 30 days from the date of cause of action. This contention was upheld by this Court. This Court held that the notice envisaged in clause (b) of the proviso to Section 138 transmitted by fax would be in compliance with the legal requirement. There was no dispute about the fact that notice sent by fax was received by the complainant on the same date i.e. 11/6/1996. This Court observed that as per clause (c) of Section 138, starting point of period for making payment is the date of receipt of the notice. Once it starts, the offence is completed on failure to pay the amount within 15 days therefrom. Cause of action would arise if the offence is committed. Thus, it was held that since the fax was received on 11/6/1996, the period of 15 days for making payment expired on 26/6/1996. Since amount was not paid, offence was committed and, therefore, cause of action arose from 26/6/1996 and the period of limitation for filing complaint expired on 26/7/1996 i.e. the date on which period of one month expired as contemplated under Section 142(b). The complaint filed on 8/8/1996 was, therefore, beyond the period of limitation. The relevant observations of this Court could be quoted hereunder: 
“19. The High Court’s view is that the sender of the notice must know the date when it was received by the sendee, for otherwise he would not be in a position to count the period in order to ascertain the date when cause of action has arisen. The fallacy of the above reasoning is that it erases the starting date of the period of 15 days envisaged in clause (c). As per the said clause the starting date is the date of “the receipt of the said notice”. Once it starts, the offence is completed on the failure to pay the amount within 15 days therefrom. Cause of action would arise if the offence is committed. 
20. If a different interpretation is given the absolute interdict incorporated in Section 142 of the Act that no court shall take cognizance of any offence unless the complaint is made within one month of the date on which the cause of action arises, would become otiose.” 
9. Undoubtedly, the view taken in SIL Import USA runs counter to the view taken in Saketh. What persuaded this Court in Saketh to take the view that in computing time, the rule is to exclude the first day and include the last can be understood if we have a look at the English cases which have been referred to in the passage quoted therein from Haru Das Gupta. 

10. We must first refer to The Goldsmiths’ Company v. The West Metropolitan Railway Company. (1904) 1 K.B, at p. 1, 5 In that case, under a special Act, a railway company was empowered to take lands compulsorily for the purpose of its undertaking, and the powers of the company for this purpose were to cease after the expiration of three years from the passing of the Act. The Act received the Royal assent on 9/8/1899. On 9/8/1902 the railway company gave notice to the plaintiffs to treat for the purchase of lands belonging to them which were scheduled in the special Act. The question was whether the notice was served on the plaintiffs within three years. It was held that the notice was served within the prescribed time because the day of the passing of the Act i.e. 9/8/1899 had to be excluded. The relevant observations of the Court may be quoted as under: “The true principle that governs this case is that indicated in the report of Lester v. Garland15 Ves. 248; 10 R. R. 68, where Sir William Grant broke away from the line of cases supporting the view that there was a general rule that in cases where time is to run from the doing of an act or the happening of an event the first day is always to be included in the computation of the time. The view expressed by Sir William Grant was repeated by Parke B. in Russell v. Ledsam14 M. & W. 574, and by other judges in subsequent cases. The rule is now well established that where a particular time is given, from a certain date, within which an act is to be done, the day of the date is to be excluded.” 

11. The second case referred to is Cartwright v. MacCormack [1963] 1 All E.R. 11. In that case, the plaintiffs met with an accident at 5.45 p.m. on 17/12/1959. He was run into by the defendant driving a motor car. He issued his writ in this action claiming damages for personal injuries. The defendant initiated third party proceedings against the respondent insurance company, alleging the company’s liability to indemnify him under an instrument called a temporary cover note admittedly issued by the insurance company on 2/12/1959. The insurance company inter alia contended that the policy had expired before the accident happened. The insurance company succeeded on this point. On appeal the insurance company reiterated that the cover note issued by the insurance company contained the expression ‘fifteen days from the date of commencement of policy’. On the same note date and time were noted as 2/12/1959 and 11.45 a.m. It was argued that the fifteen days started at 11.45 a.m. on 2/12/1959 and expired at the same time on 17/12/1959. The accident occurred at 5.45 p.m. on 17/12/1959 and, therefore, it was not covered by the insurance policy. The Court of Appeal treated the expression ‘fifteen days from the commencement of the policy’ as excluding the first date and the cover note was held to commence at midnight of that date. It was observed that the policy expired fifteen days from 2/12/1959 and these words on the ordinary rules of construction exclude the first date and begin at midnight on that day, therefore, the policy would cover the accident which had occurred at 5.45 p.m. on 17/12/1959. 

12. The third case referred to is Marren v. Dawson Bentley & Co. Ltd. (1961) 2Q.B. 135. In that case on 8/11/1954 an accident occurred whereby the plaintiff was injured in the course of his employment with the defendants. On 8/11/1957, he issued a writ claiming damages for the injuries which he alleged were caused by the defendants’ negligence. The defendants pleaded, inter alia, that the plaintiff’s cause of action, if any, accrued on 8/11/1954 and the proceedings had not been commenced within the period of three years thereof contrary to Section 2(1) of the Limitation Act, 1939. It was held that the day of the accident was to be excluded from the computation of the period within which the action should be brought and, therefore, the defendants’ plea must fail. While coming to this conclusion reliance was placed on passages from Halsbury’s laws of England 2nd ed., vol. 32 p. 142. It is necessary to quote those passages: 

“207. The general rule in cases in which a period is fixed within which a person must act or take the consequences is that the day of the act or event from which the period runs should not be counted against him. This rule is especially reasonable in the case in which that person is not necessarily cognisant of the act or event; and further in support of it there is the consideration that in case the period allowed was one day only, the consequence of including that day would be to reduce to a few hours or minutes the time within which the person affected should take action. 

208. In view of these considerations the general rule is that, as well in cases where the limitation of time is imposed by the act of a party as in those where it is imposed by statute, the day from which the time begins to run is excluded; thus, where a period is fixed within which a criminal prosecution or a civil action may be commenced, the day on which the offence is committed or the cause of action arises is excluded in the computation.” 

Reliance was also placed in this judgment on Radcliffe v. Bartholomew(1892) 1 Q.B.161. In that case on June 30 an information was laid against the appellant therein in respect of an act of cruelty alleged to have been committed by him on May 30. An objection was taken on the ground that the complaint had not been made within one calendar month after the cause of the complaint had arisen. It was held that the day on which the alleged offence was committed was to be excluded from the computation of the calendar month within which the complaint was to be made; that the complaint was, therefore, made in time. 

13. The fourth case referred to is Stewart v. Chapman(1951) 2 KB 792. In that case, an information was preferred by a police constable that Mr. Chapman had on 11/1/1951 driven a motor car along a road without due care and attention contrary to Section 12 of the Road Traffic Act, 1930. At hearing, a preliminary objection was taken that the notice of intended prosecution had not been served on the defendant within fourteen days of commission of offence in accordance with Section 21 of the Road Traffic Act, 1930, inasmuch as although the alleged offence was committed at 7.15 a.m. on 11/1/1951, the prosecutor did not send the notice of intended prosecution by registered post; until 1.00 p.m. on 11/1/1951 and it was not delivered to the defendant until 25/1/1951 at about 8.00 a.m. This submission was rejected observing that in calculating the period of fourteen days within which the notice of an intended prosecution must be served under Section 21 of the Road Traffic Act, 1930, the date of commission of the offence is to be excluded. 

14. In re. North. Ex parte Hasluck(1895) 2 Q.B. 264, the execution creditor obtained judgment on 19/5/1893. An order was made authorizing sale of the bankrupt’s goods. The purchase money there under was paid to the sheriff on July 18. The sheriff retained the money for fourteen days in compliance with Section 11 of the Bankruptcy Act, 1890. In August, the solicitor of the execution creditor paid over the said money to the execution creditor. Application was filed by the trustee in bankruptcy for an order calling upon the execution creditor and his solicitor to pay over to the trustee, the proceeds of an execution against the bankruptcy goods on the ground that at the time of the sale they had notice of prior act of bankruptcy on the part of the bankrupt. Under Section 1 of the Bankruptcy Act, 1890, a debtor commits an act of bankruptcy if execution against him has been levied by seizure of his goods, and the goods have been held by the sheriff for twenty one days. The time limit of twenty one days was an allowance of time to the debtor within which to redeem if he can. It was under these circumstances it became necessary to ascertain whether there was, in fact, a holding by the sheriff for twenty one days prior to the sale. If there was, then neither the execution creditor, nor his solicitor could be heard to say that they had no notice of such possession and the act of bankruptcy thereby constituted. Vaughan Williams, J. held that if the goods were seized on June 27 and sold on July 18, if June 27 is excluded, there was no holding by the sheriff for 21 days and consequently there was no act of bankruptcy and therefore execution creditor is not bound to hand over the money on the ground that he received it with notice of an act of bankruptcy. On appeal the same view was reiterated. Rigby L.J referred to Lester v. Garland15 Ves. 248 where Sir W. Grant expressed that if there were to be a general rule, it ought to be one of exclusion, as being more reasonable than one to the opposite effect. 15. We shall now turn to Haru Das Gupta, where this Court has followed the law laid down in the above judgments. In that case, the petitioner therein was arrested and detained on 5/2/1971 by order of District Magistrate passed on that day. The order of confirmation and continuation, which has to be passed within three months from the date of detention, was passed on 5/5/1971. The question for decision was as to when the period of three months can be said to have expired. It was contended by the petitioner that the period of three months expired on the midnight of 4/5/1971, and any confirmation and continuation of detention thereafter would not be valid. This Court referred to several English decisions on the point apart from the above decisions and rejected this submission holding that the day of commencement of detention namely 5/2/1971 has to be excluded. Relevant observations of this could read as under: 

“These decisions show that courts have drawn a distinction between a term created within which an act may be done and a time limited for the doing of an act. The rule is well-established that where a particular time is given from a certain date within which an act is to be done, the day on that date is to be excluded. (See Goldsmiths Company v. the West Metropolitan Railway Company). This rule was followed in Cartwright v. Maccormack where the expression “fifteen days from the date of commencement of the policy” in a cover note issued by an insurance company was construed as excluding the first date and the cover note to commence at midnight of that day, and also in Marren v. Damson Bentley & Co. Ltd. a case for compensation for injuries received in the course of employment, where for purposes of computing the period of limitation the date of the accident, being the date of the cause of action, was excluded. (See also Stewart v. Chadman and In re North, Ex parte Wasluck). Thus, as a general rule the effect of defining a period from such a day until such a day within which an act is to be done is to exclude the first day and to include the last day. [See Halsbury’s Laws of England, (3rd Edn.). Vol. 37, pp. 92 and 95.] There is no reason why the aforesaid rule of construction followed consistently and for so long should not also be applied here.” 

16. We have extensively referred to Saketh. The reasoning of this Court in Saketh based on the above English decisions and decision of this Court in Haru Das Gupta which aptly lay down and explain the principle that where a particular time is given from a certain date within which an act has to be done, the day of the date is to be excluded, commends itself to us as against the reasoning of this Court in SIL Import USA where there is no reference to the said decisions. 

17. It was submitted that in Saketh this Court has erroneously placed reliance on Section 12(1) and (2) of the Limitation Act, 1963. Section 12 (1) states that in computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded. In Section 12(2) the same principle is extended to computing period of limitation for an application for leave to appeal or for revision or for review of a judgment. Our attention was drawn to Subodh S. Salaskar wherein this Court has held that the Limitation Act, 1963 is not applicable to the N.I. Act. It is true that in Subodh S. Salaskar, this Court has held that the Limitation Act, 1963 is not applicable to the N.I. Act. However even if the Limitation Act, 1963 is held not applicable to the N.I. Act, the conclusion reached in Saketh could still be reached with the aid of Section 9 of the General Clauses Act, 1897. Section 9 of the General Clauses Act, 1897 states that in any Central Act or Regulation made after the commencement of the General Clauses Act, 1897, it shall be sufficient to use the word ‘from’ for the purpose of excluding the first in a series of days or any other period of time and to use the word ‘to’ for the purpose of including the last in a series of days or any other period of time. Sub-Section (2) of Section 9 of the General Clauses Act, 1897 states that this Section applies to all Central Acts made after the third day of January, 1868, and to all Regulations made on or after the fourteenth day of January, 1887. This Section would, therefore, be applicable to the N.I. Act. 

18. Counsel, however, submitted that using two different words ‘from’ and ‘of’ in Section 138 at different places clarifies the intention of the legislature to convey different meanings by the said words. He submitted that the word ‘of’ occurring in Sections 138(c) and 142(b) of the N.I. Act is to be interpreted differently as against the word ‘from’ occurring in Section 138(a) of the N.I. Act. The word ‘from’ may be taken as implying exclusion of the date in question and that may well be governed by the General Clauses Act, 1897. However, the word ‘of’ is different and needs to be interpreted to include the starting day of the commencement of the prescribed period. It is not governed by Section 9 of the General Clauses Act 1897. Thus, according to learned counsel, for the purposes of Section 142(b), which prescribes that the complaint is to be filed within 30 days of the date on which the cause of action arises, the starting date on which the cause of action arises should be included for computing the period of 30 days. 

19. We are not impressed by his submission. In this connection, we may refer to Tarun Prasad Chatterjee. Though, this case relates to the provisions of the Representation of the People Act, 1951 (for short ‘the RP Act, 1951’), the principle laid down therein would have a bearing on the present case. What is important to bear in mind is that the Limitation Act is not applicable to it. In that case the short question involved was whether in computing the period of limitation as provided in Section 81(1) of the RP Act, 1951, the date of election of the returned candidate should be excluded or not. The appellant was declared elected on 28/11/1998. On 12/1/1999, the respondent filed an election petition under Section 81(1) of the RP Act, 1951 challenging the election of the appellant. The appellant filed an application under Order VII Rule 11 of the CPC read with Section 81 of the RP Act, 1951 praying that the election petition was liable to be dismissed at the threshold as not maintainable as the same had not been filed within 45 days from the date of election of the returned candidate. While dealing with this issue, this Court referred to Section 67-A of the RP Act, 1951 which states that for the purpose of the RP Act, 1951 the date on which a candidate is declared by the returning officer under Section 53 or Section 66 to be elected shall be the date of election of the candidate. As stated earlier, the appellant was declared elected as per this provision by the returning officer on 28/11/1998. Section 81 of the RP Act, 1951 which relates to presentation of petition reads thus: 

“81. Presentation of petitions. — (1) An election petition calling in question any election may be presented on one or more of the grounds specified in sub-section (1) of Section 100 and Section 101 to the High Court by any candidate at such election or any elector within forty-five days from, but not earlier than the date of election of the returned candidate or if there are more than one returned candidate at the election and dates of their election are different, the later of those two dates. 

Explanation.—In this sub-section, ‘elector’ means a person who was entitled to vote at the election to which the election petition relates, whether he has voted at such election or not. * * * 

(3) Every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.” 

Before analyzing this provision, this Court made it clear that it was an accepted position that the Limitation Act had no application to the RP Act, 1951. This Court then referred to sub-clause (1) of Section 9 of the General Clauses Act, 1897, which states that it shall be sufficient for the purpose of excluding the first in a series of days or any other period of time to use the words ‘from’ and for the purpose of including last in a series of days or any other period of time to use the word ‘to’. This Court observed that Section 9 gives statutory recognition to the well established principle applicable to the construction of statute that ordinarily in computing the period of time prescribed, the rule observed is to exclude the first and include the last day. This Court quoted the relevant provisions of Halsbury’s Laws of England, 37th Edn., Vol.3, p. 92. We deem it appropriate to quote the same. 

“Days included or excluded — When a period of time running from a given day or even to another day or event is prescribed by law or fixed as contract, and the question arises whether the computation is to be made inclusively or exclusively of the first-mentioned or of the last- mentioned day, regard must be had to the context and to the purposes for which the computation has to be made. Where there is room for doubt, the enactment or instrument ought to be so construed as to effectuate and not to defeat the intention of Parliament or of the parties, as the case may be. Expressions such as ‘from such a day’ or ‘until such a day’ are equivocal, since they do not make it clear whether the inclusion or the exclusion of the day named may be intended. As a general rule, however, the effect of defining a period in such a manner is to exclude the first day and to include the last day.” 

The further observations made by this Court are pertinent and need to be quoted: 

“12. Section 9 says that in any Central Act or regulation made after the commencement of the General Clauses Act, 1897, it shall be sufficient for the purpose of excluding the first in a series of days or any other period of time, to use the word “from”, and, for the purpose of including the last in a series of days or any period of time, to use the word “to”. The principle is that when a period is delimited by statute or rule, which has both a beginning and an end and the word “from” is used indicating the beginning, the opening day is to be excluded and if the last day is to be included the word “to” is to be used. In order to exclude the first day of the period, the crucial thing to be noted is whether the period of limitation is delimited by a series of days or by any fixed period. This is intended to obviate the difficulties or inconvenience that may be caused to some parties. For instance, if a policy of insurance has to be good for one day from 1st January, it might be valid only for a few hours after its execution and the party or the beneficiary in the insurance policy would not get reasonable time to lay claim, unless 1st January is excluded from the period of computation.” 

It was argued in that case that the language used in Section 81(1) that “within forty-five days from, but not earlier than the date of election of the returned candidate” expresses a different intention and Section 9 of the General Clauses Act has no application. While rejecting this submission, this Court observed that: 

“We do not find any force in this contention. In order to apply Section 9, the first condition to be fulfilled is whether a prescribed period is fixed “from” a particular point. When the period is marked by terminus a quo and terminus ad quem, the canon of interpretation envisaged in Section 9 of the General Clauses Act, 1897 require to exclude the first day. The words “from” and “within” used in Section 81(1) of the RP Act, 1951 do not express any contrary intention.” This Court concluded that a conjoint reading of Section 81(1) of the RP Act, 1951 and Section 9 of the General Clauses Act, 1897 leads to the conclusion that the first day of the period of limitation is required to be excluded for the convenience of the parties. This Court observed that if the declaration of the result is done late in the night, the candidate or elector would hardly get any time for presentation of election petition. Law comes to the rescue of such parties to give full forty-five days period for filing the election petition. In the facts before it since the date of election of the returned candidate was 28/11/1998, the election petition filed on 12/1/1999 on exclusion of the first day from computing the period of limitation, was held to be in time. 

20. As the Limitation Act is held to be not applicable to N.I. Act, drawing parallel from Tarun Prasad Chatterjee where the Limitation Act was held not applicable, we are of the opinion that with the aid of Section 9 of the General Clauses Act, 1897 it can be safely concluded in the present case that while calculating the period of one month which is prescribed under Section 142(b) of the N.I. Act, the period has to be reckoned by excluding the date on which the cause of action arose. It is not possible to agree with the counsel for the respondents that the use of the two different words ‘from’ and ‘of’ in Section 138 at different places indicates the intention of the legislature to convey different meanings by the said words. 

21. In this connection we may also usefully refer to the judgment of the Division Bench of the Bombay High Court in Vasantlal Ranchhoddas Patel & Ors. v. Union of India & Ors. AIR 1967 Bombay 138 which is approved by this Court in Gopaldas Udhavdas Ahuja and another v. Union of India and others(2004) 7 SCC 33, though in different context. In that case the premises of the appellants were searched by the officers of the Enforcement Directorate. Several packets containing diamonds were seized. The appellants made an application, for return of the diamonds, to the learned Magistrate, which was rejected. Similar prayer made to the Single Judge of the Bombay High Court was also rejected. An appeal was carried by the appellants to the Division Bench of the Bombay High Court. It was pointed out that under Section 124 of the Customs Act, 1962, no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice in writing with the prior approval of the officer of customs not below the rank of an Assistant Commissioner of Police, informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty. Under Section 110(1) of the Customs Act, 1962 a proper officer, who has reason to believe that any goods are liable to confiscation may seize such goods. Under sub- Section(2) of Section 110 of the Customs Act, 1962, where any goods are seized under sub-Section (1) and no notice in respect thereof is given under clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. Under proviso to Section 110, sub-section (2), however, the Collector could extend the period of six months on sufficient cause being shown. It was argued that the Customs Officers had seized the goods within the meaning of Section 110 of the Customs Act, 1962 on 4/9/1964. The notice contemplated under Section 124(a) was given after 3/3/1965, that is after the period of six months had expired. As per Section 110(2), notice contemplated under Section 124(a) of the Customs Act, 1962 had to be given within six months of the seizure of the goods, and, therefore, notice issued after the expiry of six months was bad in law and, hence, the Collector of Customs was not competent to extend the period of six months under the proviso to sub-section (2) of Section 110 as he had done. Therefore, no order confiscating the goods or imposing penalty could have been made and the goods had to be returned to the appellants. It was argued that Section 9 of the General Clauses Act, 1897 has no application because the words ‘from’ and ‘to’ found in Section 9 of the General Clauses Act, 1897 are not used in sub-Section 2 of Section 110 of the Customs Act, 1962. This submission was rejected and Section 9 of the General Clauses Act, 1897 was held applicable. Speaking for the Bench Chainani, C.J. observed as under: 

“... ... ...The principle underlying section 9 has been applied even in the cases of judicial orders passed by Courts, even though in terms the section is not applicable, See. Ramchandra Govind v. Laxman Savleram, AIR 1938 Bom 447, Dharamraj v Addl. Deputy Commr., Akola, AIR 1957 Bom 154, Puranchand v. Mohd Din. AIR 1935 Lah 291, Marakanda Sahu v. Lal Sadananda, AIR 1952 Orissa 279, and Liquidator Union Bank, Mal, v. Padmanabha Menon, (1954) 2 Mad LJ 44.The material words in sub-s. (2) of section 110 are "within six months of the seizure of the goods". In such provisions the word "of" has been held to be equivalent to "from": see Willims v. Burgess and Walcot, (1840) 12 Ad and El 635. In that case section 1 of the relevant statute enacted that warrants of attorney shall be filed "within twenty-one days after the execution. Section 2 enacted that unless they were "filed as aforesaid within the said space of twenty-one days from the execution, "they and the judgment thereon shall be void subject to the conditions specified in the section. The warrant of attorney was executed on 9th December, 1839 and it was filed, and judgment entered up on the 30th December. It was held that in computing the period of 21 days the day of execution must be excluded, Reliance was placed on Ex parte Fallon, (1793) 5 Term Rep 283 in which the word used was "of" and not "from". It was observed that "of", "from" and "'after" really meant the same thing and that no distinction could be suggested from the nature of the two provisions. In Stroud's Judicial Dictionary, Vol. 3, 1953 Edition in Note (5) under the word "of", it has been observed that "of" is sometimes the equivalent of "after" e.g., in the expression "within 21 days of the execution". The principle underlying section 9 of the General Clauses Act cannot therefore, be held to be inapplicable, merely because the word used in sub- section (2) of section 110 is "of" and not "from". Relevant extracts from Halsbury’s laws of England3rd Edn., vol. 37 p. 95 were quoted. They read as under: 

“The general rule in cases in which a period is fixed within which a person must act or take the consequences is that the day of the act or event from which the period runs should not be counted against him. 

This general rule applies irrespective of whether the limitation of time is imposed by the act of a party or by statute; thus, where a period is fixed within which a criminal prosecution or a civil action may be commenced, the day on which the offence is committed or the cause of action arises is excluded in the computation.” 

In the circumstances, it was held that the day on which the goods were seized has to be excluded in computing the period of limitation contemplated under sub-section (2) of Section 110 and therefore the notice was issued within the period of limitation. It is pertinent to note that under Section 110 (2) of the Customs Act, notice had to be given within six months of the seizure of the goods. Similarly, under Section 142(b) of the N.I. Act, the complaint has to be made within one month of the date of which cause of action arose. The view taken in Vasantlal Ranchhoddas Patel meets with our approval. 

22. In view of the above, it is not possible to hold that the word ‘of’ occurring in Section 138(c) and 142(b) of the N.I. Act is to be interpreted differently as against the word ‘from’ occurring in Section 138(a) of the N.I. Act; and that for the purposes of Section 142(b), which prescribes that the complaint is to be filed within 30 days of the date on which the cause of action arises, the starting day on which the cause of action arises should be included for computing the period of 30 days. As held in Ex parte Fallon(1793) 5 Term Rep 283 the words ‘of’, ‘from’ and ‘after’ may, in a given case, mean really the same thing. As stated in Stroud’s Judicial Dictionary, Vol. 3 1953 Edition, Note (5), the word ‘of’ is sometimes equivalent of ‘after’. 

23. Reliance placed on Danial Latifi is totally misplaced. In that case the Court was concerned with Section 3(1)(a) of the Muslim Women (Protection of Rights on Divorce) Act, 1986. Section 3(1)(a) provides that a divorced woman shall be entitled to a reasonable and fair provision and maintenance to be made and paid to her within the Iddat period by her former husband. This provision is entirely different from Section 142(b) of the N.I. Act, which provides that the complaint is to be made ‘within one month of the date on which the cause of action arises’. (emphasis supplied). 

24. We may, at this stage, note that learned counsel for the appellant relied on State of Himachal Pradesh where, while considering the question of computation of three months’ limitation period and further 30 days within which the challenge to the award is to be filed, as provided in Section 34(3) and proviso thereto of the Arbitration Act, this Court held that having regard to Section 12(1) of the Limitation Act, 1963 and Section 9 of the General Clauses Act, 1897, day from which such period is to be reckoned is to be excluded for calculating limitation. It was pointed out by counsel for the respondents that Section 43 of the Arbitration Act makes the Limitation Act, 1963 applicable to the Arbitration Act whereas it is held to be not applicable to the N.I. Act and, therefore, this judgment would not be applicable to the present case. We have noted that in this case reliance is not merely placed on Section 12(1) of the Limitation Act. Reliance is also placed on Section 9 of the General Clauses Act. However, since, in the instant case we have reached a conclusion on the basis of Section 9 of the General Clauses Act, 1897 and on the basis of a long line of English decisions that where a particular time is given, from a certain date, within which an act is to be done, the day of the date is to be excluded, it is not necessary to discuss whether State of Himachal Pradesh is applicable to this case or not because Section 12(1) of the Limitation Act is relied upon therein. 

25. Having considered the question of law involved in this case in proper perspective, in light of relevant judgments, we are of the opinion that Saketh lays down the correct proposition of law. We hold that for the purpose of calculating the period of one month, which is prescribed under Section 142(b) of the N.I. Act, the period has to be reckoned by excluding the date on which the cause of action arose. We hold that SIL Import USA does not lay down the correct law. Needless to say that any decision of this Court which takes a view contrary to the view taken in Saketh by this Court, which is confirmed by us, do not lay down the correct law on the question involved in this reference. The reference is answered accordingly. 
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