News By/Courtesy: Vagish | 16 May 2019 11:23am IST

HIGHLIGHTS

  • SC observed that cognizance of a complaint filed under Section 138 of the Negotiable Instrument Act can be taken by the court even after the prescribed period on sufficient cause being shown for delay
  • The appellant stated that in the case of MSR Leathers v S. Palaniappan it was held that issuance of successive notices is permitted under Section 138 of NI Act w.r.t the object of legislation.
  • The court did not express any opinion on the merits of the contention of the case. The court directed that the complaint be restored to the trial court.

In a recent judgment, the Supreme Court observed that cognizance of a complaint filed under Section 138 of the Negotiable Instrument Act can be taken by the court even after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period. The bench comprising Justice DY Chandrachud and Justice Hemant Gupta was concerned with an appeal impugning a judgment of Patna High Court which quashed a summons issued by Chief Judicial Magistrate in a cheque bounce complaint.  The court considered the submission of the appellant who assailed the judgment and submitted that in the case of MSR Leathers S. Palaniappan  (CRIMINAL APPEAL NOS. 261-264 OF 2002) where it was held that issuance of successive notices is permitted under Section 138 of Negotiable Instruments Act having regard to the object of legislation.

The appellant, in this case,  issued a legal notice which was within a period of 30 days that is the prescribed time. The drawer of the cheque has failed to make payment to the holder in due course or payee within 15 days of the receipt is provided in the proviso (c). The second respondent did not admit that the legal notice was served on him. The appellant narrated the circumstances that despite repeated request to the postal department, no acknowledgement of notice was furnished. Hence a second notice was issued. The court considered the first notice to constitute the cause of action under section 138 of NI Act. The court stated that a complaint has to be instituted under section 142(1) of the NI Act within a month. The proviso also states that the complaint is cognizable before the court after the prescribed period if the complainant makes the court believe that there were sufficient reasons for the complaint to be cognizable.  In paragraph 7 and 8 of the complaint, the court recognized reasons that are sufficient for the court to take cognizance of the complaint.

The court enunciated that, "The complaint was instituted on 11 May 2016. Under Section 142(1), a complaint has to be instituted within one month of the date on which the cause of action has arisen under clause (c) of the proviso to Section 1386 . The proviso however stipulates that cognizance of the complaint may be taken by the court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period. Both in paragraphs 7 and 8 of the complaint, the appellant indicated adequate and sufficient reasons for not being able to institute the complaint within the stipulated period. These have been adverted to above. The CJM condoned the delay on the cause which was shown by the appellant for the period commencing from 6 April 2018. However, if paragraphs 7 and 8 of the complaint are read together, it is evident that the appellant had indicated sufficient cause for seeking condonation of the delay in the institution of the complaint. The High Court has merely adverted to the presumption that the first notice would be deemed to have been served if it was dispatched in the ordinary course. Even if that presumption applies, we are of the view that sufficient cause was shown by the appellant for condoning the delay in instituting the complaint taking the basis of the complaint as the issuance of the first legal notice dated 31 December 2015." The court did not express any opinion on the merits of the contention of the case. The court directed that the complaint be restored to the trial court.

Section Editor: Shreyashi Tiwari | 16 May 2019 11:33am IST


Tags : #SC #NIA #138 #Delay #Complaint #Sufficient #Cause #Delay #Condoned

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