2002 (11) TMI 663 - HC - Companies Law

Summary

Issues:
1. Challenge to the impugned order dated 18-12-2001 summoning the petitioners as accused under section 138 of the Negotiable Instruments Act.
2. Question of whether the complaint is time-barred and maintainable due to the service of the notice.
3. Dispute regarding the nature and validity of the notice served on the petitioners.

Analysis:
1. The petitioners, as directors of a company, challenged the order summoning them for the offence under section 138 of the Negotiable Instruments Act. The company issued two cheques which were dishonoured, leading to legal proceedings initiated by the respondent. The main contention was the complaint being time-barred, as the first notice was served on 5-7-2001, and the complaint was filed in December. The confusion regarding the company's name change was also raised by the petitioners.

2. The key argument revolved around the nature of the notice served on the petitioners. The letter dated 5-7-2001 was deemed insufficient as a legal notice under section 138 of the Act. The crucial notice dated 17-11-2001, served through an advocate, demanded payment within 15 days, failing which a criminal complaint would be filed. The court emphasized the importance of a clear intention in the notice for payment within the specified time frame.

3. The judgment highlighted the significance of the last notice served strictly in terms of section 138 for triggering the limitation period to file a complaint. The court clarified that only a notice meeting the statutory requirements could initiate legal action, and failure to do so would forfeit the right to proceed subsequently. The decision was made based on the facts of the case, emphasizing the importance of a valid notice for legal proceedings.

In conclusion, the court dismissed the petition, finding no merit in the challenge to the impugned order. The judgment underscored the necessity of a proper notice under section 138 of the Act for initiating legal action in cases of dishonoured cheques, emphasizing the importance of adherence to statutory requirements for maintaining the validity of complaints and legal proceedings.