Case Note & Summary
The petitioner, Hiren Ashwin Shah, challenged the order dated 20 December 2022 passed by the Additional Sessions Judge, Borivali, Mumbai, which affirmed the order dated 22 January 2021 of the Metropolitan Magistrate, 43rd Court, Borivali, condoning a delay of 1259 days in filing a complaint under Section 138 of the Negotiable Instruments Act, 1881. The complainant (Respondent No.2) alleged that he rendered consultancy services to the petitioner, who runs M/s. Chetak Construction Company, and that the consultancy charges were overdue. A settlement was reached, and the petitioner issued two cheques dated 5 October 2016 and 22 December 2016 for Rs.10,00,000 and Rs.11,50,000 respectively, which were dishonoured. The complainant sent a demand notice on 19 January 2017. The petitioner responded with a letter dated 1 March 2017 acknowledging the liability and promising to pay by 31 March 2017, requesting the complainant not to proceed with the notice. Subsequently, the petitioner gave repeated assurances, and on 12 July 2019, a Memorandum of Understanding (MOU) was executed where the petitioner acknowledged the liability and agreed to pay Rs.20 lakhs in installments. When the petitioner defaulted, the complainant filed the complaint on 20 August 2020 along with an application for condonation of delay. The Magistrate condoned the delay, holding that the repeated assurances constituted sufficient cause. The Sessions Court affirmed this. The petitioner argued that the delay was inordinate and unexplained, and that a liberal approach in condoning delay is not justified in criminal prosecutions. The High Court dismissed the petition, holding that the courts below had correctly exercised their discretion and that the repeated assurances by the petitioner constituted sufficient cause for the delay. The court noted that the nature of the offence under Section 138 is quasi-criminal and that a pragmatic approach is warranted to promote commercial efficacy. The petition was dismissed, and the rule was discharged.
Headnote
A) Negotiable Instruments Act - Condonation of Delay - Section 142(b) - Sufficient Cause - The court considered whether repeated assurances and promises by the accused to pay the amount, including a letter dated 1 March 2017 and a MOU dated 12 July 2019, constitute sufficient cause for condoning the delay of 1259 days in filing a complaint under Section 138 of the Negotiable Instruments Act, 1881. The court held that such assurances dissuaded the complainant from filing the complaint within the statutory period and thus constitute sufficient cause. (Paras 3.3-3.5, 5-6) B) Criminal Procedure - Condonation of Delay - Liberal Approach - The court examined whether a liberal approach in condoning delay, often applied in civil proceedings, is justifiable in a criminal prosecution under Section 138 of the Negotiable Instruments Act, 1881. The court held that while penal consequences are involved, the nature of the offence is quasi-criminal and the object of the Act is to promote commercial efficacy, so a pragmatic approach is warranted. (Paras 5-6) C) Negotiable Instruments Act - Limitation - Section 142(b) - Computation of Delay - The court addressed the computation of delay from the date of cause of action, which arises after the expiry of 15 days from the receipt of the demand notice. The court noted that the complainant filed the complaint on 20 August 2020, and the delay was 1259 days, but the repeated assurances by the accused provided sufficient cause. (Paras 3.2-3.5)
Issue of Consideration
Whether the delay of 1259 days in filing a complaint under Section 138 of the Negotiable Instruments Act, 1881 was properly condoned by the Magistrate and affirmed by the Sessions Court, and whether the repeated assurances and promises by the accused constitute sufficient cause for condonation of delay.
Final Decision
The High Court dismissed the writ petition, holding that the courts below had correctly exercised their discretion in condoning the delay. The repeated assurances by the petitioner constituted sufficient cause for the delay. The rule was discharged.
Law Points
- Condonation of delay
- Sufficient cause
- Repeated assurances
- Section 138 Negotiable Instruments Act
- 1881
- Section 142(b) Negotiable Instruments Act
- Criminal prosecution
- Liberal approach
