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SUPREME COURT OF INDIA
Jagdish Chand Gupta
Versus
San deep Arora
Decided on : September 4, 1998
Negotiable Instruments Act - Dishonoured Cheque - Summary: The court found that the notice given by the appellant to the respondent was within the prescribed time under the Negotiable Instruments Act. The respondent failed to make payment within the stipulated 15 days, and the complaint was filed within the prescribed period after the cause of action arose. The High Court's decision to quash the complaint on the ground of limitation was set aside, and the appeal was allowed.
Fact of the Case:
The cheque was dishonoured on 2-7-1996. The appellant gave notice to the respondent within the prescribed time, and the respondent failed to make payment within 15 days. The complaint was filed on 12-8-1996, within the prescribed period after the cause of action arose.
Finding of the Court:
The High Court's decision to quash the complaint on the ground of limitation was set aside, and the appeal was allowed.
Issues: Dishonour of cheque, notice period, payment period, limitation
Ratio Decidendi: The notice given by the appellant was within the prescribed time under the Negotiable Instruments Act. The respondent failed to make payment within the stipulated 15 days, and the complaint was filed within the prescribed period after the cause of action arose.
Final Decision: The High Court's decision to quash the complaint on the ground of limitation was set aside, and the appeal was allowed.
( 1 ) LEAVE granted.
( 2 ) IN the present case the cheque was dishonoured on 2-7-1996. Under Clause (b) of the proviso to Section 138 of the Negotiable Instruments Act, after the dishonour of the cheque, the payee or the holder is required to make a demand for payment by giving notice in writing to the drawer of the cheque on the return of the cheque as unpaid. In the present case, it is apparent from Annexure P-4 that a notice dated 16-7-1996 was given by the appellant to the respondent which was within the time prescribed under Clause (b) of the proviso to Section 138 of the Negotiable Instruments Act. The reply of 23-7-1996 given by the respondent makes this position apparent. Under Clause (c) of the proviso to Section 138, 15 days time is given to the respondent for making payment after receipt of notice. No such payment was made within 15 days even if we assume that 23-7-1996 was the date on which the respondent has received the notice. Section 142 (b) of the Nagotiable Instruments Act, provides that complaint should be made within one month from the date on which the cause of action arises under Clause (c) of the proviso to Section 138.
( 3 ) IN the present case, the complaint was filed on 12-8-1996 which is well within the period prescribed after the accrual of the cause of action under Clause (c) of the proviso to Section 138. The High Court was not right in quashing the complaint on the ground of limitation. The impugned order of the High Court is therefore, set aside. The appeal is allowed. Appeal allowed.
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