2016 (12) TMI 1662 - HC - Indian Laws

Complaint under NI act filed beyond the prescribed period of limitation - Held that - If we look into the contents of the complaint and the order passed by the Court below it would clearly reflect that in the instant also from the pleading made by the complainant in itself makes it clear that the cheque for the first time was dishonoured on 03.03.2011 and legal notice was issued to the Respondent on 04.03.2011. Therefore in view of the authoritative decision of the Supreme Court in the aforementioned judgment for all practical purposes the cause of action for the purpose of filing a case under the provisions of the N.I. Act so far as the Petitioner s case is concerned would be 04.03.2011 and not any subsequent dates. Accordingly this Court is of the opinion that the Court below has not committed any error of law in rejecting the complaint filed by the Petitioner barred by limitation.

Summary

Issues:
1. Challenge to dismissal of complaint under Section 138 of the Negotiable Instrument Act on the ground of limitation.

Analysis:

The case involved a complaint filed under Section 138 of the Negotiable Instrument Act against the Respondent accused for dishonoring a cheque issued in favor of the Petitioner. The complaint was dismissed by the Chief Judicial Magistrate on the basis of being filed beyond the period of limitation. The Petitioner argued that the service of notice dated 04.03.2011 was not proven, and thus, the notice issued on 01.06.2011 should be considered as the effective service, making the complaint within the prescribed limitation period. However, the Court observed that the cause of action for filing the complaint arose on 04.03.2011 when the first legal notice was issued after the cheque was dishonored, as per the complaint's contents.

The Court referred to the Supreme Court's decision in Prem Chand Vijay Kumar v. Yashpal Singh, emphasizing that repeated issuance of notices on dishonored cheques does not create a fresh cause of action for filing a complaint. The Supreme Court's ruling clarified the requirements for successfully prosecuting a drawer under Section 138 of the Act, highlighting the key facts needed to establish a cause of action. It was noted that the cause of action arises only once, and the period for filing a complaint is calculated from the day following the expiration of the notice period given to the drawer.

Based on the facts presented in the complaint and the legal principles outlined by the Supreme Court, the Court concluded that the cause of action for the Petitioner's case was established on 04.03.2011, the date of the first legal notice issued after the cheque was dishonored. Therefore, the Court upheld the lower court's decision to reject the complaint as barred by limitation. The Court found no error in the lower court's judgment and dismissed the present challenge, ruling that the complaint was filed beyond the limitation period, lacking merit for further consideration.