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1999 Supreme(Ker) 165

Judges : K.T.THOMAS,M.B.SHAH
SIL, Import, U.S.A. - Appellant
Versus
Exim Aides Silk Exporters - Respondent
Case No : Crl.A. No. 488 of 1999
Decided On : 05/03/1999
Advocates Appeared :
Dhruv Mehta; S. K. Mehta; F. Anam; Shobha; For Appellants Krishnamurthi Swami; G. R. Mohan; For Respondents

The cause of action for a complaint under Section 138 of the Negotiable Instruments Act arises on the expiry of 15 days from the date of the notice sent by fax.

Headnote:

S.138 of the Negotiable Instruments Act requires a complaint to be filed within one month of the cause of action arising. S.142 specifies that no court shall take cognizance of the offence unless the complaint is made within one month of the cause of action. The court interpreted the requirement of giving notice in writing and held that notice sent by fax is considered compliance with the legal requirement.

Fact of the Case:

Respondent filed a complaint against appellant for an offence under Section 138 of the Negotiable Instruments Act. Appellant issued post-dated cheques to respondent, which were dishonoured. Respondent sent a notice to appellant by fax and registered post. Appellant argued that the complaint was filed after the expiry of the limitation period. The High Court allowed the complaint to proceed. The Supreme Court held that the cause of action arose on the expiry of 15 days from the date of the fax notice, and the complaint was filed beyond the limitation period. The complaint was dismissed.

Finding of the Court:

The court analyzed the provisions of Section 138 and 142 of the Negotiable Instruments Act and interpreted the requirement of giving notice in writing. The court held that notice sent by fax would be compliance with the legal requirement. The court also discussed the need to interpret statutes in light of technological advancements. The court referred to a previous decision that stated that there can only be one cause of action for dishonour of a cheque. The court disagreed with a conflicting view expressed by the Kerala High Court. The court concluded that the complaint was filed beyond the limitation period and should be dismissed.

Ratio Decidendi: The cause of action for a complaint under Section 138 of the Negotiable Instruments Act arises on the expiry of 15 days from the date of the notice sent by fax. Notice sent by fax is considered compliance with the requirement of giving notice in writing. There can only be one cause of action for dishonour of a cheque.

Result: The complaint filed by the respondent on cheque No. 188 is dismissed.

Judgment :-

1. Leave granted.

2. A fax message sent by the respondent for his own safeguard has now boomeranged. Neither can he disown sending the fax message nor can he own its full implication. Thus he is forked in a catch-22-situation. Such a situation arose in a criminal proceeding which respondent launched against appellant for die offence under S.138 of the Negotiable Instruments Act (for short 'the Act').

3. How the above situation is reached can be summarised thus:

"Respondent is a proprietary concern doing business finished silk products by exporting them to foreign countries. Appellant is a company having its Headquarters in California (USA). Appellant has been placing orders with the respondent for exporting such silk materials. According to the respondent, appellant owned a sum of 72075 US dollars (equivalent to more than 26 lakhs of rupees) towards the sale consideration of several consignments of materials despatched to the appellant on the orders placed. After much correspondence and negotiations appellant company issued some post dated cheques on State Bank of India (California - ARTESIA Branch). Three of such cheques were presented on 3.5.1996 after those cheques attained maturity, for encashment through Bank of Madurai, Banglore Branch. Two cheques were returned dishonoured with the reason "no sufficient funds".

4. On receipt of such intimation respondent sent a notice to the appellant company by fax on 11.6.1996. On the next day the respondent sent the same notice by registered post also which was served on the appellant on 25.6.1996. On 8.8.1996 respondent filed a complaint before the Additional Chief Metropolitan Magistrate, Bangalore in respect of cheque No.188 dated 20.11.1995 (for 5998.40 US dollars) and another cheque No. 187 (with which the present appeal is not concerned). The Metropolitan Magistrate, after receiving the complaint on file took cognizance of the offence and issued process to the appellant. It was sought to be quashed for which the appellant filed a petition before the magistrate on various grounds. Learned magistrate upheld some of the grounds urged by the appellant and dismissed the complaint discharging the accused by his order dated 20.11.1996.

5. Respondent thereupon moved the High Court of Karnataka in revision against the aforesaid order of discharge. A single judge of the High Court allowed the revision petition and set aside the order of the Metropolitan Magistrate and restored the complaint on file with a direction to proceed with the prosecution in respect of cheque No. 188. It is the said order of the High Court which is now being challenged.

6. The only point canvassed by the appellant, in this appeal, was that the magistrate has no jurisdiction to take cognizance of the offence after the expiry of 30 days front the date of cause of action and in this case when respondent filed a complaint on 8.8.1996, the aforesaid period of 30 days stood expired much earlier. The said plea was based on the fact situation that respondent sent the notice buy fax on 11.6.1996 receipt of which has been owned by the appellant in full measure. If the notice sent by fax is to be treated as the notice in writing contemplated in the Section, the cause of action should have arisen on the expiry of 15 days therefrom (i.e.26.6.1996) and the period of limitation for filing the complaint expired on 26.7.1996, according to the appellant. As the complaint was filed long after that date the magistrate has no jurisdiction to take cognizance of the offence, contended learned counsel.

7. S.142 of the Act reads thus :

"142. Cognizance of offences:- Not withstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),

(a) no court shall take cognizance of any offence punishable under S.138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;

(b) such complaint is made within one month of the date on within one month of the date on whic




























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