Cognizance of Offences Under Section 138 of the Negotiable Instruments Act, 1881: A Judicial Perspective

 

Cognizance of Offences Under Section 138 of the Negotiable Instruments Act, 1881: A Judicial Perspective

By: Advocate Abhishek Jat

The issue of cognizance of an offence under Section 138 of the Negotiable Instruments Act, 1881 ("NI Act") has been the subject of judicial scrutiny, particularly concerning the validity of complaints filed before the expiration of the statutory 15-day period prescribed under Section 138(c). Additionally, the question arises whether a complainant can refile the complaint if the initial one was premature and the limitation period under Section 142(b) has expired. These issues were definitively addressed by the Hon'ble Supreme Court in Yogendra Pratap Singh v. Savitri Pandey & Anr., (2014) 10 SCC 713.

Section 138 of the NI Act criminalizes the dishonor of a cheque for insufficiency of funds or exceeding the arrangement made with the banker. However, the offence is conditioned by certain procedural requirements stipulated in the proviso to Section 138, particularly Clause (c), which mandates that the drawer must be given 15 days from the date of receipt of the statutory notice to make payment before a complaint can be instituted. The Hon'ble Supreme Court, in Yogendra Pratap Singh (supra), held that any complaint filed before the completion of this 15-day period is premature and does not constitute a legally valid complaint.

The Court emphasized that mere presentation of a complaint in the Magistrate’s Court before the expiry of 15 days does not mean that cognizance has been taken. If the complaint is filed within 15 days of service of notice, it is non est in law and cannot be the basis for initiating proceedings under Section 138 of the NI Act. The legal bar under Section 142 of the NI Act prohibits the Magistrate from taking cognizance of such a premature complaint. Thus, an offence under Section 138 is deemed to have been committed only when the stipulated 15-day period has elapsed, and the payment remains outstanding. Any complaint filed before this period is void ab initio and is liable to be quashed.

The second issue pertains to whether a complainant, whose initial complaint was prematurely filed and subsequently dismissed, can present a fresh complaint despite the expiry of the limitation period under Section 142(b). Section 142(b) prescribes that a complaint under Section 138 must be filed within one month from the date on which the cause of action arises under Clause (c) of the proviso to Section 138. However, the proviso to Section 142(b) allows the Court to condone the delay in filing if sufficient cause is shown. The Supreme Court, in Yogendra Pratap Singh (supra), clarified that if the original complaint was premature and, therefore, non est in law, the complainant is not barred from filing a fresh complaint within one month from the date of the decision in the criminal case that declared the earlier complaint invalid. The delay in filing such a fresh complaint shall be deemed to have been condoned under the proviso to Section 142(b), provided the complainant satisfies the Court regarding the existence of sufficient cause for the delay.

This ruling brings clarity to the procedural aspects of initiating prosecution under Section 138 of the NI Act. It underscores the necessity for strict adherence to statutory timelines while simultaneously safeguarding the rights of complainants who may have inadvertently filed a premature complaint. The key takeaways from the Supreme Court’s judgment are that a complaint filed before the expiry of 15 days from the service of notice is not legally maintainable. A complainant is permitted to file a fresh complaint even after the expiry of the one-month limitation period under Section 142(b), provided sufficient cause is demonstrated. The delay in filing a fresh complaint is treated as condoned under the proviso to Section 142(b).

The decision in Yogendra Pratap Singh (supra) ensures that procedural irregularities do not unduly prejudice a complainant’s right to seek redress under Section 138 of the NI Act. While reaffirming the mandatory nature of the statutory timelines, the Supreme Court has also provided a remedial avenue for complainants whose complaints were prematurely filed. This judgment serves as a guiding precedent in cheque dishonor cases, ensuring a balanced and legally sound interpretation of the NI Act’s provisions.

References:

1. Yogendra Pratap Singh v. Savitri Pandey & Anr., (2014) 10 SCC 713.
2. Negotiable Instruments Act, 1881.
3. Criminal Procedure Code, 1973.
4. Narsingh Das Tapadia v. Goverdhan Das Partani & Anr., (2000) 7 SCC 183.
5. Sarav Investment and Financial Consultants Pvt. Ltd. v. Llyods Register of Shipping Indian Office Staff Provident Fund & Anr., (2007) 12 SCALE 123.