2024 (11) TMI 709 - SCH - Indian Laws

Dishonour of Cheque - challenge to summoning order - appellant contended that the complaint filed was not premature, as it was within the limitation period of one month from the cause of action - Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT - On reading of proviso (c) to Section 138 as well as clause (b) of sub-section (1) of Section 142 of the N.I. Act, it becomes clear that the cause of action for the complainant to maintain a complaint arises when within fifteen days from the receipt of the notice issued by the complainant, there is no payment of the amount stated in the cheque which has been dishonoured. On the said cause of action arising, a complaint would be maintainable within a period of one month as per clause (b) of sub-section (1) of Section 142 of the N.I. Act. In the instant case, the legal notice was issued on 30.09.2019 which was received by the respondent No.2 on 01.10.2019, but a reply was given on 16.10.2019. There was no payment of the amount which was stated in the cheque which was dishonoured. Consequently, within a period of one month from 16.10.2019, the appellant had the right to maintain the complaint. In the instant case, the complaint was filed on 23.10.2019, which is within the period of limitation as prescribed in clause (b) of sub-section (1) of Section 142 of the N.I. Act. The High Court, therefore, fell in error in holding that the complaint was premature by construing the date 16.10.2019, on which the reply was sent by respondent No.2-accused as the date from which limitation period of one month had to be calculated. This is contrary to clause (b) of sub-section (1) of Section 142 of the N.I. Act. The impugned order passed by the High Court is set aside and the summoning order dated 09.12.2019 is revived - Appeal allowed.

Summary

Issues:
Validity of order quashing summoning order under Section 138 of the Negotiable Instruments Act, 1881.

Analysis:
The Supreme Court heard an appeal challenging the High Court's order quashing a summoning order issued by the Chief Judicial Magistrate under Section 138 of the Negotiable Instruments Act, 1881. The appellant contended that the complaint filed was not premature, as it was within the limitation period of one month from the cause of action. The legal notice was served on the accused, and upon no payment being made within fifteen days, the complaint was filed. The High Court's decision was based on an incorrect interpretation of the limitation period under the Act. The Court examined Sections 138 and 142 of the Act, emphasizing that the cause of action arises when no payment is made within fifteen days of notice. The appellant's complaint was filed within the prescribed period, making it maintainable. The Court held that the High Court erred in deeming the complaint premature based on the date of the accused's reply, contrary to the Act's provisions.

The Court considered the provisions of the Negotiable Instruments Act, particularly Section 138 and Section 142, to determine the validity of the complaint and the limitation period for filing it. The appellant's argument that the complaint was timely filed within the Act's requirements was upheld, emphasizing the importance of the cause of action in initiating legal proceedings under the Act. The Court clarified the correct interpretation of the Act's provisions regarding the timeline for filing complaints in cases of dishonored cheques, highlighting the significance of the notice period and the subsequent filing of complaints within the stipulated timeframe.

In conclusion, the Supreme Court allowed the appeal, setting aside the High Court's order and reviving the summoning order issued by the Chief Judicial Magistrate. The Court directed the Magistrate to proceed with the proceedings expeditiously and in accordance with the law. The judgment clarified the correct interpretation of the relevant provisions of the Negotiable Instruments Act, emphasizing the importance of adhering to the prescribed timelines for filing complaints in cases of dishonored cheques.