Case Note & Summary
The appellant, Praveen Otarmal Parmar, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 against the respondents, M/s. Abhiroop Associates and its partner Uday Raghunath Manerikar, for dishonour of a cheque. The complainant sent a first notice on 31st March 2003 by RPAD, but the acknowledgment was not received. Consequently, the complainant sent a second notice to accused No.1 on 16th April 2003 and to accused No.2 on 21st April 2003. As the accused failed to pay, the complaint was filed on 5th June 2003. The trial court acquitted the respondents, holding that the complaint was barred by limitation by four days, calculating the limitation period from the first notice dated 31st March 2003. The complainant appealed. The High Court examined the issue of limitation and held that the cause of action under Section 138 arises from the date of service of notice. Since the first notice was not served, it could not give rise to a cause of action. The second notice, which was served, gave a fresh cause of action. The complaint was filed within one month from the date of the second notice, and thus was within limitation. The High Court allowed the appeal, set aside the acquittal, and remanded the matter to the trial court for fresh consideration on merits.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Limitation - Section 138 - Cause of Action - The complainant sent a first notice on 31st March 2003 which was not served. A second notice was sent on 16th April 2003 and 21st April 2003. The complaint was filed on 5th June 2003. The trial court held the complaint was barred by limitation by four days, calculating from the first notice. The High Court held that the cause of action arises from the date of service of notice, and since the first notice was not served, the second notice gave a fresh cause of action. The complaint was within limitation from the second notice. (Paras 1-3)
Issue of Consideration
Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 was barred by limitation when the complainant sent a second notice after the first notice was not served, and the complaint was filed within one month from the second notice.
Final Decision
The appeal is allowed. The impugned judgment dated 23rd March 2006 passed by the 11th Jt. Judicial Magistrate First Class, Pune in Case No.298 of 2003 is set aside. The matter is remanded back to the trial court for fresh consideration on merits. The parties are directed to appear before the trial court on 11th September 2023.
Law Points
- Cause of action under Section 138 of Negotiable Instruments Act arises from the date of service of notice
- not from the date of first dispatch
- limitation period for filing complaint is one month from date of cause of action
- second notice can give fresh cause of action if first notice is not served
