Justice DY Chandrachud and Justice Hemant Gupta
Justice DY Chandrachud and Justice Hemant Gupta

Delay in filing Cheque Bouncing complaint can be condoned for sufficient reasons, Supreme Court

Meera Emmanuel

The Supreme Court recently observed that a delay in filing a complaint for cheque bouncing can be condoned if the complainant is able to show sufficient reasons to justify the same.

The Bench of Justices DY Chandrachud and Hemant Gupta made note of this aspect while quashing a Patna High Court verdict. The case before the Court involved two cheques drawn in favour of the appellant, which had bounced in December 4, 2015.

Consequently, the appellant sent a legal notice to the drawer of the cheque on December 31, 2015, intimating the dishonour of the cheque. This was well within the statutory limitation of 30 days prescribed under Section 138 of the Negotiable Instruments Act for issuing a legal notice.

However, the appellant did not receive any proof that his legal notice had duly reached the cheque drawer from the Postal Department. Queries made for information regarding the delivery of the notice between February 14 and February 23, 2016 did not yield any response.

This prompted the appellant to send a second legal notice on February 26, 2016. It was undisputed that this notice had reached the cheque drawer, who also sent his response on March 2, 2016.

A complaint was eventually launched by the appellant in May 2016 for cheque bouncing under Section 138. Pursuant to this, a Chief Judicial Magistrate issued summons to the cheque drawer. Revisional proceedings challenging the same were dismissed by a Session Judge in March 2017.

On further challenge, the Patna High Court quashed the proceedings, stating that the cheque bouncing complaint was not filed within the statutory period of thirty days prescribed in Section 138.

However, the Supreme Court took a more lenient view in the matter, given that the appellant appeared to have acted diligently in this case. The Bench proceeded to opine that it is the first legal notice sent by the complainant in December 2015 that should be taken as the basis for the institution of the complaint.

The Court took this view given that the complainant/appellant had sufficiently explained the reasons for the delay in presenting the legal notice. As noted in the judgment,

The appellant has in the complaint specifically narrated the circumstance that despite repeated requests to the postal department, no acknowledgment of the notice was furnished. It was in these circumstances that the appellant issued a second notice dated 26 February 2016.

Cognizant as we are of the requirement specified in proviso (b) to Section 138, that the notice must be issued within thirty days of the receipt of the memo of dishonour, we have proceeded on the basis that it is the first notice dated 31 December 2015 which constitutes the cause of action for the complaint under Section 138.

Further, the Bench also relied on the proviso to Section 142 of the Negotiable Instruments Act to point out that the Court has the discretion to entertain cheque bouncing complaints lodged beyond the statutory limitation period. This discretion may be exercised to extend the limitation period if the Court is satisfied that the complainant has sufficient cause for not making a complaint within the statutory period.

Under Section 142 (1) of the Negotiable Instruments Act, a a complaint has to be instituted within one month from the date on which the cause of action arises. However, the Court noted that the proviso to this Section allows for some relaxation when it comes to the period of limitation for sufficient causes.

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.”

It proceeded to point out that this proviso would be applicable in this case as well.

“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…

…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.”

In view of these observations, the Court set aside the High Court judgement and restored the case to the trial court. It was however emphasised that no opinion has been given on the merits of the case.

Read the Judgment:

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