2021 (7) TMI 649 - HC - Indian Laws

Dishonor of Cheque - insufficient fund - it was argued that the cheques were issued as security and not in discharge of any debt - crystallization of cause of action on the date of filing of the complaint case under section 138 of the Negotiable Instruments Act, 1881or not - complainant itself was pre-mature or not? HELD THAT - This court is of the considered view that the learned trial court completely failed to consider that the cause of action for filing a complaint case under Section 138 of the N.I. Act is not counted from the date of dispatch of legal notice, but is counted from expiry of 15 days from the date of service of legal notice. Thus, the timeline for filing the case, even if it is assumed that the legal notice having been sent through registered cover on 04.03.2008 and not return back unserved or returned back for any other reason , the date of service would be 03.04.2008 i.e expiry of 30 days from dispatch of the legal notice and thereafter 15 days was required to be counted i.e., till 18.04.2008 for the cause of action to mature in order to file a complaint case under section 138 of the Negotiable Instruments Act, 1881 - However, in the instant case, the complaint was filed on 10.04.2008 and thus, the cause of action for filing the complaint case under Section 138 of the N.I. Act had not matured on 10.04.2008, which is the date of filing the complaint case. This Court also finds that the learned trial court has not recorded any finding in connection with the service of legal notice much less of finding of deemed service of notice after expiry of the 30 days period from dispatch of legal notice under registered cover. This Court finds that there is no material on record regarding service of legal notice dated 03.03.2008 dispatched by registry on 04.03.2008 upon the petitioner and it is not the case of the complainant that the legal notice was returned unserved or returned for any other reason. This court is also of the considered view that presumption regarding service of notice sent through registered cover can be drawn only upon expiry of 30 days from the date of dispatch of notice - This Court finds that the law has been well settled that the cause of action for filing a complaint case under Section 138 of the N.I Act could not arise prior to expiry of 15 days from the date of service of legal notice on the accused. The condition precedent for filing the case under Section 138 of the Negotiable Instruments Act, 1881, having not been satisfied, the complaint itself was not maintainable on the day it was filed and accordingly, the petitioners could not have been convicted under the said Section. The question of any presumption regarding existing debt under Section 139 of the Negotiable Instruments Act, 1881 also could not arise as the complaint itself was not maintainable - Petition allowed.

Summary

Issues Involved:
1. Service of notice under Section 138 of the Negotiable Instruments Act.
2. Timeliness of filing the complaint under Section 138 of the Negotiable Instruments Act.
3. Presumption of debt or liability under Section 139 of the Negotiable Instruments Act.

Issue-Wise Detailed Analysis:

1. Service of Notice under Section 138 of the Negotiable Instruments Act:
The petitioner argued that the impugned judgments were perverse as there was no finding recorded regarding the service of notice concerning the bouncing of cheques. The notice was sent by registered post on 04.03.2008, and the petitioner denied receiving it. The petitioner contended that the service could only be presumed upon the expiry of 30 days from its dispatch, and the complaint was filed prematurely on 10.04.2008. The opposite party countered that there was no illegality or perversity in the judgments and relied on the Supreme Court's decision in C. C. Alavi Haji Vs. Palapetty Muhammed, which discussed the presumption of service of notice.

2. Timeliness of Filing the Complaint under Section 138 of the Negotiable Instruments Act:
The court found that the complaint was filed prematurely. The timeline for filing the complaint should be counted from the expiry of 15 days after the presumed service of the notice, which would be 03.04.2008 (30 days from dispatch), making the earliest date for filing the complaint 18.04.2008. The complaint filed on 10.04.2008 was thus premature. Both the trial and appellate courts failed to consider the correct timeline for the cause of action to mature.

3. Presumption of Debt or Liability under Section 139 of the Negotiable Instruments Act:
The trial court had presumed the existence of debt or liability based on the issuance of cheques, which were dishonored due to insufficient funds. The appellate court also upheld this presumption, stating that the accused had not rebutted the presumption of debt or liability. However, the High Court found that since the complaint was premature, the presumption under Section 139 could not arise, and the complaint itself was not maintainable.

Findings of the Court:
The High Court concluded that the complaint was filed before the cause of action had matured, rendering it premature and not maintainable. The court referred to the Supreme Court's judgment in Yogendra Pratap Singh vs. Savitri Pandey, which emphasized that the cause of action for filing a complaint under Section 138 arises only after the expiry of 15 days from the date of service of the notice. Consequently, the High Court set aside the judgments and sentences passed by the lower courts, discharged the petitioner from the liability of the bail bonds, and allowed the revision petition. The court also noted that the complainant could file a fresh complaint and satisfy the court regarding any delay.

Conclusion:
The High Court allowed the revision petition, set aside the convictions and sentences, and discharged the petitioner from bail bonds. The court emphasized the importance of adhering to the prescribed timelines under Section 138 of the Negotiable Instruments Act and clarified the legal position regarding the service of notice and the filing of complaints.