2017 (5) TMI 1431 - HC - Indian Laws

Default under Negotiable Instruments Act - whether an offence under Section 138 of the Act can be said to have been committed when the period provided for under Section 138 Clause (c) of the proviso has not expired? - Held that - The complaint under the Act filed before the expiry of 15 days is pre-mature and cannot be treated as a legally constituted complaint in the eyes of law. Therefore, the proceedings initiated on the basis of such complaint are liable to be quashed and set-aside. Resultantly, there is merit in this petition and the same is accordingly allowed and the judgment passed by Additional Sessions Judge whereby the petitioner has been convicted and sentenced to undergo simple imprisonment for one month and to pay a sum of ₹ 1,00,000/- as compensation under Section 138 of the Act, is set-aside.

Summary

Issues:
1. Interpretation of Section 138 of the Negotiable Instruments Act, 1881 regarding the timeline for filing a complaint under the Act.

Analysis:
The judgment in question pertains to a revision against a decision convicting the petitioner under Section 138 of the Negotiable Instruments Act, 1881. The key issue revolves around the timeline for filing a complaint under the Act. The complainant received a returning memo on a certain date and issued a legal notice under the Act within the stipulated period. However, the complaint was filed before the expiry of 15 days from the receipt of the notice by the accused.

The crux of the matter lies in the interpretation of Section 138 of the Act, which outlines the conditions under which an offense is deemed to have been committed. The section specifies that the drawer of a dishonored cheque must fail to make the payment within fifteen days of receiving the notice for the offense to be established. This requirement is crucial for the legal validity of a complaint under the Act.

The judgment draws attention to a precedent set by the Supreme Court in Yogendra Pratap Singh vs. Savitri Pandey, emphasizing that no complaint can be considered valid under Section 138 if filed before the expiry of the 15-day period stipulated in the proviso. The Court highlighted that the cause of action for filing a complaint only arises after this statutory period has elapsed, and any premature complaint lacks legal standing.

In light of the legal principles established by the Supreme Court, the High Court concluded that a complaint filed before the expiration of 15 days from the notice served on the accused is premature and cannot be deemed a legally valid complaint. Consequently, the proceedings initiated based on such a premature complaint were deemed unsustainable in the eyes of the law.

Therefore, the High Court allowed the petition, setting aside the previous judgments that convicted the petitioner, and quashed the proceedings initiated against them. The ruling reaffirmed the importance of adhering to the statutory timeline outlined in Section 138 of the Negotiable Instruments Act, 1881 for the validity of complaints and legal proceedings under the Act.