Case Note & Summary
The dispute arose from two cheques drawn on the State Bank of India for Rs 36,00,000 and Rs 13,00,000, which were dishonoured and returned unpaid under a memo issued by UCO Bank, Begusarai on 20 November 2015. The appellant, Birendra Prasad Sah, received the memo on 4 December 2015 and issued a legal notice on 31 December 2015 within the 30-day period prescribed under proviso (b) to Section 138 of the Negotiable Instruments Act, 1881. The appellant claimed that despite queries with the postal department between 14 February 2016 and 23 February 2016, no proof of service was provided, leading to a second legal notice on 26 February 2016. The second respondent replied on 2 March 2016. The appellant filed a complaint under Section 138 on 11 May 2016. The Chief Judicial Magistrate, Begusarai, condoned the delay in filing the complaint on 14 July 2016 and took cognizance, issuing summons to the second respondent. The second respondent's revisional application before the Sessions Judge was rejected on 8 March 2017. However, the High Court of Judicature at Patna, in a petition under Section 482 CrPC, quashed the proceedings on 10 May 2018, holding that the complaint was not filed within the statutory period of 30 days under Section 138. The Supreme Court considered the legal issues: whether successive legal notices are permissible under Section 138, and whether the delay in filing the complaint was properly condoned. The appellant argued, relying on MSR Leathers v. S Palaniappan (2013) 1 SCC 177, that successive notices are permissible and that the CJM had condoned the delay. The respondent contended that the second notice was beyond 30 days from the memo of dishonour and that the complaint was time-barred. The Supreme Court held that the first notice dated 31 December 2015 constituted the cause of action, and the appellant had shown sufficient cause for the delay in filing the complaint, which the CJM had condoned. The Court found the High Court's judgment unsustainable and allowed the appeal, restoring the complaint to the trial court for adjudication on merits.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Successive Legal Notices - The issuance of successive notices is permissible under Section 138 having regard to the object of the legislation, as held in MSR Leathers v. S Palaniappan (2013) 1 SCC 177. The first notice dated 31 December 2015, issued within 30 days of receipt of the memo of dishonour, constituted the cause of action. The second notice dated 26 February 2016 was issued due to non-acknowledgment of service of the first notice. (Paras 7, 10) B) Negotiable Instruments Act - Condonation of Delay - Section 142 - Sufficient Cause - The complaint was instituted on 11 May 2016, beyond the one-month period from the cause of action. The appellant showed sufficient cause in paragraphs 7 and 8 of the complaint for the delay. The Chief Judicial Magistrate condoned the delay. The High Court erred in quashing the proceedings without considering the condonation. (Paras 11-12) C) Criminal Procedure Code, 1973 - Inherent Powers - Section 482 - Quashing of Complaint - The High Court's order quashing the complaint under Section 482 CrPC was unsustainable because the appellant had shown sufficient cause for delay and the CJM had condoned it. The Supreme Court restored the complaint to the trial court. (Paras 6, 12)
Issue of Consideration
Whether the High Court erred in quashing a complaint under Section 138 of the Negotiable Instruments Act, 1881 on the ground that the complaint was not filed within the statutory period, despite the appellant having issued successive legal notices and the Chief Judicial Magistrate having condoned the delay.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the complaint to the file of the trial court for adjudication on merits. The Court held that the first notice dated 31 December 2015 constituted the cause of action, and the appellant had shown sufficient cause for condonation of delay in filing the complaint.
Law Points
- Section 138 Negotiable Instruments Act
- 1881
- proviso (b) notice within 30 days
- successive notices permissible
- condonation of delay under Section 142
- cause of action arises from first notice
