2022 (3) TMI 685 - HC - Indian Laws

Dishonor of cheque - Fund insufficient - transmission of legal notice, cheque return and statutory provision under section 138(c) and 142(b) of Negotiable Instruments Act which was required to be filed on 11.09.2017 - time limitation - HELD THAT - It is an admitted fact that it is not in dispute that the cheque was returned on 29.07.2017, notice for payment by way of legal notice was issued on 09.08.2017. The petitioner has received the notice on 12.08.2017 and the complaint was filed on 20.09.2017. It has been discussed in the order taking cognizance. For correct appreciation of the limitation, here the Court is required to look into section 138 of the Negotiable Instruments Act alongwith the proviso and sub section (b) of section 142 of Negotiable Instruments Act. On perusal of sub-section(b) of section 142 of the Negotiable Instruments Act, it is crystal clear that the complaint is required to be made within one month of the date on which the cause of action arose - The proviso (c) of section 138 of Negotiable Instruments Act speaks that for the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice, complaint is required to be filed. Thus, in view of the above date, which has been discussed here, it is crystal clear that 15 days time completed on 26.09.2017 and the complaint was filed on 20.09.2017. Thus, it was within the time. The contention of the learned counsel for the petitioner with regard to limitation of 8 days is not substantial and, accordingly, there is no illegality in the cognizance order. Petition dismissed.

Summary

Issues:
1. Quashing of order taking cognizance under section 138 of Negotiable Instruments Act against the petitioner in two complaint cases.
2. Delay in filing the complaint case and its impact on taking cognizance.
3. Disclosure of nature of debt as a condition precedent for filing a complaint under section 138 of the Negotiable Instruments Act.

Analysis:

1. The High Court heard two petitions seeking the quashing of orders taking cognizance under section 138 of the Negotiable Instruments Act against the petitioner in two complaint cases involving two cheques issued by the second opposite party (O.P.No.2). Both petitions were heard together due to common facts and legal issues.

2. The complaint cases were filed by the O.P.No.2, alleging that the accused issued a cheque that bounced due to insufficient funds in the account, leading to the filing of complaints under section 138 of the Negotiable Instruments Act. The petitioner's counsel argued a delay of 8 days in filing the complaint, challenging the cognizance taken without a condonation petition. The respondent's counsel contended that the cases were filed within the stipulated time.

3. The legal analysis included reference to the case of "K.S.Joseph v. Philips Carbon Black Ltd. & Anr.", highlighting the importance of timely filing of complaints under the Negotiable Instruments Act. The court examined the provisions under sections 138 and 142 of the Act concerning the presentation of cheques to the bank, issuance of demand notices, and the timeline for filing complaints after the cause of action arises.

4. The court emphasized the statutory requirements, such as presenting the cheque within six months, issuing a demand notice within thirty days of cheque return, and filing a complaint within one month of the cause of action. The judgment clarified that the complaint in question was filed within the specified timeframe, dismissing the argument of limitation raised by the petitioner's counsel.

5. Regarding the disclosure of the nature of debt, the court held that the absence of such details in the complaint did not invalidate the case, as it could be addressed during the trial phase. Ultimately, the court dismissed both petitions [Cr.M.P.No.4227 of 2018 and Cr.M.P.No.4257 of 2018], upholding the order taking cognizance under section 138 of the Negotiable Instruments Act against the petitioner in both cases.