IN THE HIGH COURT OF DELHI
Anoop Kumar Mendiratta, J.
Naresh Chand Jain - Appellant
Versus
State of NCT of Delhi at New Delhi - Respondent
Crl. Appeal No. 491 of 2022
Decided On : 19-10-2022
Section 138 - Negotiable Instruments Act - 138 - Summary: The court discussed the essential requirements under Section 138 of the Negotiable Instruments Act, 1881, including the demand for payment within 30 days of receiving information about the dishonored cheque. The court also considered the orders passed by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No(s).3/2020, extending the period of limitation for legal proceedings due to the challenges faced by the country on account of COVID-19 virus and resultant difficulties. The court found that the Trial Court's refusal to take cognizance was erroneous in light of the Supreme Court's orders.
Fact of the Case:
The appellant filed a complaint under Section 138 of the Negotiable Instruments Act after a cheque was returned unpaid. The Trial Court declined to take cognizance, citing failure to send the legal demand notice within the prescribed period due to COVID-19 situation and prevailing lockdown.
Finding of the Court:
The Trial Court's refusal to take cognizance was erroneous in light of the orders passed by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No(s).3/2020, extending the period of limitation for legal proceedings due to the challenges faced by the country on account of COVID-19 virus and resultant difficulties.
Issues: The main issue was whether the Trial Court's refusal to take cognizance of the complaint under Section 138 of the Negotiable Instruments Act was justified.
Ratio Decidendi: The court held that the Trial Court's refusal to take cognizance was erroneous in light of the orders passed by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No(s).3/2020, extending the period of limitation for legal proceedings due to the challenges faced by the country on account of COVID-19 virus and resultant difficulties.
Final Decision: The present appeal was allowed, and the order passed by the Trial Court, refusing to take cognizance, was set aside. The Trial Court was directed to compute the period of limitation after excluding the period as per the cheque return memo dated 17.03.2020 till 20.10.2020 and to proceed in accordance with the law.
JUDGMENT
Anoop Kumar Mendiratta, J. Appeal under Section 378 Cr.PC has been preferred on behalf of the appellant for setting aside order dated 25.02.2021 passed by the learned MM, Central District, Tis Hazari in Naresh Chand Jain Vs. M/s Zasfa Packaging, whereby the cognizance of the offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as `the said Act') was declined and the complaint was held to be not maintainable.
2. In brief, as per the case of the appellant, a cheque bearing No. 140118 dated 15.03.2020 for an amount of Rs.8,85,600/- was issued by the accused/respondent No. 2 as part liability outstanding against the arrears of rent in favour of the appellant. The cheque was deposited on 15.03.2020 by the appellant in his bank account maintained in State Bank of India, which was returned unpaid with the remarks `PAYMENT STOPPED BY DRAWER' as per the cheque return memo dated 17.03.2020. The legal notice was sent by the complainant/appellant to the accused/respondent on 20.10.2020 and complaint was thereafter filed on 10.11.2020 under Section 138 of the said Act before the learned MM, Central District, Tis Hazari. It is claimed by the appellant that legal notice could not be issued within stipulated period under Section 138 of the Act due to Covid-19 situation and prevailing lockdown.
3. It is further the case of the appellant that Hon'ble Supreme Court of India vide order dated 23.03.2020 passed in Writ Petition (Civil) No(s).3/2020 took suo motu cognizance and the period of limitation for the legal proceedings was extended from 15.03.2020 till further orders in view of challenges faced by the country on account of COVID-19 virus and resultant difficulties. Reference is also made to further directions passed by the Hon'ble Supreme Court vide orders dates 08.03.2021, 27.04.2021, 23.09.2021 and 10.01.2022 in Suo Motu Writ Petition (Civil) No(s).3/2020.
It is urged that the learned Trial Court wrongly refused to take the cognizance relying upon judgment passed by the Hon'ble Supreme Court in Sagufa Ahmed & Ors. Vs. Upper Assam Plywood Products Pvt. Ltd. & Ors., Civil Appeal Nos.3007-3008 of 2020 decided on 18.09.2020. It is further submitted that the period of limitation of 45 days involved in the aforesaid appeal had expired on 02.02.2020 i.e. prior to the orders in Suo Motu Writ Petition (Civil) No(s).3/2020 and it was held by the Hon'ble Supreme Court that what was extended with reference to the order dated 23.03.2020 by the Hon'ble Supreme Court was only the period of limitation and not the period up to which the delay can be condoned in exercise of discretion conferred by the proviso to Section 421 (3) of the Companies Act, 2013.
4. It may be observed that in the present case, vide order dated 25.02.2021, learned MM declined to give benefit of extension of limitation after exclusion of period from 17.03.2020 till 20.10.2020, in terms of directions issued by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No(s).3/2020 vide order dated 23.03.2020 on the ground that no post/courier was suspended and notice could be issued by electronic form. It was also observed by learned MM that the Court does not have power to condone the delay in sending the legal demand notice as per proviso (b) of Section 138 of N.I. Act. It was further interpreted that if contention of complainant is accepted than 15 days period from the receipt of legal demand notice to pay the cheque amount, shall also stand extended, in which case the present complaint would be premature and liable to be dismissed on that account. Reliance was also placed upon judgment passed by Hon'ble Supreme Court in Sagufa Ahmed & Ors. Vs. Upper Assam Plywood Products Pvt. Ltd. & Ors., Civil Appeal Nos.3007-3008 of 2020. It was held by learned MM that time provided under proviso to Section 138 of the N.I. Act has not been enlarged by virtue of orders dated 23.03.2020 & 06.05.2020 and only period of limitation to file complaint
The main legal point established in the judgment is that the Trial Court's refusal to take cognizance of the complaint under Section 138 of the Negotiable Instruments Act was erroneous in light of th....
The orders passed by the Hon'ble Supreme Court in Suo Motu WP(C) No.3 of 2020 were for the benefit of the complainant to extend the period of limitation for filing cases/complaints during the COVID-1....
The court ruled that, for calculating the 30-day notice period under S.138, the day of receipt of information about the cheque return is excluded.
The court established that the date of receipt of the dishonor memo is excluded in calculating the notice period under Section 138 of the Negotiable Instruments Act.
A complaint under Section 138 of the Negotiable Instruments Act, 1881 must be made within one month of the date on which the cause of action arises. The court does not have jurisdiction to take cogni....
The main legal point established in the judgment is the interpretation of the statutory provisions in Sections 138 and 142 of the Negotiable Instruments Act regarding the period of limitation for fil....
The court established that in computing time limits under Section 138 of the NI Act, the first day is excluded and the last day is included.
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