Case Note & Summary
The applicant, M/s. Airsonic Travels Pvt. Ltd., through its representative Pramod Atmaram Rane, was the original complainant in three complaints under Section 138 of the Negotiable Instruments Act, 1881 against the accused, Shri Prem Motiram Jhangiani. The accused had issued several cheques in discharge of debts/liabilities, which were dishonoured on different dates between 5.1.1994 and 14.1.1994. On 15.1.1994, a consolidated notice was issued to the accused demanding payment, which was served on the same day. The accused failed to make payment within 15 days of receipt of notice. The complaints were filed on 1.3.1994. The trial court convicted the accused, but the Sessions Court acquitted him on the ground that the complaints were barred by limitation, holding that they were not filed within one month from the expiry of 15 days available for payment. The complainant filed three appeals along with applications seeking leave to appeal. The High Court examined the provisions of Sections 138 and 142 of the NI Act. It noted that the notice was served on 15.1.1994, so the accused had 15 days to pay, i.e., up to 30.1.1994. The cause of action arose on 31.1.1994, the day after the expiry of the 15-day period. The complaints filed on 1.3.1994 were within one month from 31.1.1994. The High Court relied on the Supreme Court decision in Saketh India Ltd. & Ors. vs. India Securities Ltd. (1999) 3 SCC 1, which held that the cause of action arises on the day following the expiry of 15 days from receipt of notice. The High Court concluded that the complaints were within limitation and set aside the Sessions Court's order, allowing the appeals and granting leave to appeal.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Limitation - Section 138, 142(a) - Cause of action arises on the day following the expiry of 15 days from receipt of notice - Complaints filed on 1.3.1994 were within one month from 31.1.1994 - Held that the Sessions Court erred in holding the complaints barred by limitation (Paras 3-5).
Issue of Consideration
Whether the complaints under Section 138 of the Negotiable Instruments Act, 1881 were barred by limitation as they were not filed within one month from the expiry of 15 days available for payment to the accused.
Final Decision
The High Court allowed the applications for leave to appeal and set aside the Sessions Court's order of acquittal, holding that the complaints were within limitation.
Law Points
- Limitation period for filing complaint under Section 138 of Negotiable Instruments Act
- 1881
- Computation of cause of action
- Notice period
- Section 142(a) NI Act
Case Details
2011 LawText (BOM) (03) 136
Criminal Application No. 4496 of 2009 with Criminal Application No. 4497 of 2009 with Criminal Application No. 4498 of 2009
Mr. A.M. Chimalkar for applicant, Mr. Prem Motiram Jhangiani respondent No.1 in person, Mr. V.B. Konde Deshmukh APP for respondent No.2
M/s. Airsonic Travels Pvt. Ltd. through Shri Promod Atmaram Rane
Shri Prem Motiram Jhangiani, The State of Maharashtra
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Nature of Litigation
Criminal appeals against acquittal in cheque dishonour cases under Section 138 of Negotiable Instruments Act, 1881.
Remedy Sought
Leave to appeal against the acquittal order passed by the Sessions Court.
Filing Reason
The Sessions Court acquitted the accused on the ground that the complaints were barred by limitation.
Previous Decisions
Trial Court convicted the accused; Sessions Court acquitted the accused holding complaints barred by limitation.
Issues
Whether the complaints under Section 138 of the Negotiable Instruments Act, 1881 were barred by limitation as they were not filed within one month from the expiry of 15 days available for payment to the accused.
Submissions/Arguments
Applicant argued that the complaints were filed within one month from the date of cause of action, which arose on 31.1.1994, the day after expiry of 15 days from notice.
Respondent/accused argued that the complaints were barred by limitation as they were not filed within one month from the expiry of 15 days.
Ratio Decidendi
Under Section 138 of the Negotiable Instruments Act, 1881, the cause of action arises on the day following the expiry of 15 days from the receipt of notice by the drawer. The complaint under Section 142(a) must be filed within one month from that date. In this case, notice was served on 15.1.1994, so the 15-day period ended on 30.1.1994, and cause of action arose on 31.1.1994. The complaints filed on 1.3.1994 were within one month from 31.1.1994 and thus within limitation.
Judgment Excerpts
As per clause (c) to Sec. 138, the drawer of the cheque has to make payment within 15 days from the receipt of the notice. The notice was received by the accused on 15.1.1994. Therefore, he had time to make payment within 15 days. So he could have made payment upto 30.1.94. As he failed to make payment till the end of 30.1.1994, the cause of action arose on 31.1.1994.
In Saketh India Ltd. & Ors. vs. India Securities Ltd. (1999) 3 SCC 1, the Supreme Court considered the provisions of Sections 138 and 142 and observed thus: '...the cause of action arises on the day following the expiry of 15 days from receipt of notice.'
Procedural History
The original complainant filed three complaints under Section 138 NI Act on 1.3.1994. The trial court convicted the accused. The accused appealed to the Sessions Court, which acquitted him on limitation grounds. The complainant then filed three criminal applications seeking leave to appeal to the High Court.
Acts & Sections
- Negotiable Instruments Act, 1881: 138, 142(a)
