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2003 (2) TMI 398 - HC - Companies Law

Issues Involved:
1. Applicability of Section 5 of the Limitation Act, 1963, to proceedings under the Negotiable Instruments Act, 1881.
2. Interpretation of Section 142 of the Negotiable Instruments Act concerning the limitation period for filing complaints.

Issue-wise Detailed Analysis:

1. Applicability of Section 5 of the Limitation Act, 1963, to proceedings under the Negotiable Instruments Act, 1881:

The primary issue was whether Section 5 of the Limitation Act, 1963, which allows for the condonation of delay, applies to proceedings under the Negotiable Instruments Act, 1881 (NI Act). The petitioner argued that the NI Act does not exclude the application of the Limitation Act's provisions and, under Section 29(2) of the Limitation Act, Section 5 should apply to proceedings under the NI Act. The petitioner cited judgments from the Orissa High Court, which supported this view, but also acknowledged a contrary judgment from the Andhra Pradesh High Court.

The court analyzed the legislative intent and the specific provisions of the NI Act and the Limitation Act. It highlighted that the Limitation Act of 1963 reversed the position of the 1908 Act, making Sections 4 to 24 applicable to special laws unless expressly excluded. However, the court referred to the Supreme Court's judgment in Union of India v. Popular Construction Co., which clarified that even without express exclusion, the scheme and object of a special law could exclude the applicability of Sections 4 to 24 of the Limitation Act.

The court concluded that Section 142 of the NI Act, which prohibits courts from taking cognizance of an offence unless the complaint is made within one month from the date of cause of action, effectively excludes the application of Section 5 of the Limitation Act. The non obstante clause in Section 142 and the specific limitation period prescribed indicate a legislative intent to exclude the power to condone delays under Section 5 of the Limitation Act.

2. Interpretation of Section 142 of the Negotiable Instruments Act concerning the limitation period for filing complaints:

The court examined Section 142 of the NI Act, which outlines the procedure for taking cognizance of offences under Section 138 of the Act. The section includes a non obstante clause and stipulates that no court shall take cognizance of any offence punishable under Section 138 except upon a written complaint made within one month of the date on which the cause of action arises. The cause of action is defined under Section 138(c) as the failure of the drawer to make payment within 15 days of receiving the notice.

The court noted that the combined reading of Section 142(b) and Section 138(c) indicates a limitation period of 45 days from the date of receipt of notice by the accused for filing a complaint. In the present cases, the complaints were filed beyond this period. The court reiterated that the legislative intent behind the insertion of Chapter XVII (Sections 138 to 142) in the NI Act was to provide a speedier and effective remedy for dishonoured cheques, free from traditional delays and procedural bottlenecks.

The court emphasized that the limitation period for filing complaints under Section 138 is substantive and conclusive, affecting the right to initiate proceedings. It distinguished between original proceedings and subsequent steps like appeals or interlocutory applications, where Section 5 of the Limitation Act might apply. However, for original proceedings like filing a complaint under Section 138, the strict limitation period must be adhered to.

Conclusion:

The court dismissed the criminal revision cases, upholding the trial court's decision that the complaints were barred by limitation and could not be entertained. The court affirmed that Section 5 of the Limitation Act does not apply to original proceedings under the NI Act, and the specific limitation period prescribed under Section 142 must be strictly followed.

 

 

 

 

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