2016 (9) TMI 1460 - HC - Indian Laws

Maintainability of Complaint - Dishonor of cheque due to insufficiency of funds - Offences u/s 138(c) of the N.I. Act - main contention of accused is that the complaint filed before expiry of 15 days from the issuance of notice under Section 138(c) of the Act is not maintainable - Held that - From the refusal there cannot be any inference that the accused refused to make the payment. The refusal may be to drag on the proceedings or the refusal may be to gain time to make payment or the refusal may be to tease the complainant. When no inference can be drawn as to the conduct of refusal the complainant is bound to wait for 15 days. That cannot be the case when there is an outright denial of liability by issuing a reply. Section 138 NI Act gives an opportunity not only to the honest drawer but also to a dishonest drawer to make amends and to escape from prosecution - in the present case the alleged dishonest drawer did not want to make payment but has chosen to say No Payment . Therefore there is no purpose in waiting for the completion of 15 days. The contention that the complaint is not maintainable has to be rejected - petition dismissed.

Summary

Issues:
1. Maintainability of the complaint filed under Section 138(c) of the Negotiable Instruments Act.
2. Interpretation of the 15-day period for payment after receipt of notice under Section 138(c).
3. Determining the cause of action for filing a complaint under Section 138(c).

Issue 1: Maintainability of the complaint under Section 138(c):
The petitioner sought to quash STC No.794 of 2012, arguing that the complaint was not maintainable as it was filed before the expiry of 15 days from the issuance of the notice under Section 138(c) of the Act. The respondent contended that the quash petition was filed to evade payment covered by the dishonored cheque. The court considered previous decisions, including Vinay Kumar Shailendra vs. Delhi High Court Legal Services Committee and Yogendra Pratap Singh vs. Savitri Pandey, to analyze the issue of maintainability in such cases.

Issue 2: Interpretation of the 15-day period for payment under Section 138(c):
The court examined the purpose of the 15-day period prescribed under Section 138(c) for the petitioner/accused to arrange repayment. The respondent argued that since the petitioner denied liability, there was no need to wait for the full 15 days. Reference was made to the case of Rajendran vs. Danapal Pillai, where it was held that the cause of action arises from the date of denial, and the payee need not wait for the full 15 days if the drawer denies payment despite the statutory notice.

Issue 3: Determining the cause of action for filing a complaint under Section 138(c):
The court analyzed the conflicting contentions regarding the cause of action for filing a complaint under Section 138(c). It considered the respondent's argument that the cause of action arises from the date on which the petitioner/accused failed to make payment, even if the full 15-day period had not elapsed. The court rejected the contention that there was no cause of action on the date of filing the complaint, based on the interpretations of relevant legal provisions and previous judgments.

In conclusion, the court dismissed the Criminal Original Petition, affirming the maintainability of the complaint under Section 138(c) of the Negotiable Instruments Act. The judgment provided a detailed analysis of the legal provisions, previous decisions, and the specific circumstances of the case to determine the validity of the complaint and the interpretation of the 15-day period for payment after notice of dishonor.