Section 138 Of NI Act - Time Period Of 30 Days For Issuance Of Legal Notice Excludes The Day Of Intimation By Bank - Delhi HC
The Delhi High Court in a cheque dishonor case has held, "While computing the limitation period of 30 days prescribed under Section 138(b) N.I. Act for issuance of a valid legal notice, the day on which intimation is received by the complainant from the bank that the cheque in question has been returned unpaid has to be excluded".
A bench of Justice Manoj Kumar Ohri was hearing a petition under section 482 C.R.P.C for seeking quashing of Criminal Complaints filed under Section 138 read with Sections 141/142 of the Negotiable Instruments Act, 1881 (N.I Act) against the Petitioners.
The Respondent company was engaged in the business of providing loans for clean energy projects. The Petitioner company took a loan from the Respondents and discharged their liability in part via cheques dated 31.03.2015, 30.09.2015, and 30.06.2016. However, the cheques in question got dishonored upon presentation and were returned vide return memos dated 29.05.2015, 19.10.2015, and 21.07.2016 respectively with the remarks "drawer sign differ" and "no funds."
The complainant Company received return statements from its Bank on 19.06.2015, 29.10.2015, and 27.07.2016 in respect of the aforesaid cheques.
Consequently, it posted legal demand notices on 07.07.2015, 28.11.2015, and 26.08.2016 respectively calling upon the petitioner Company to repay the debt owed within 15 days of receipt of the notices. On failure of the petitioner company to repay the amount, criminal complaints were initiated against them.
The main issue that arose in the case was, whether or not the legal demand notices issued by the complainant Company were sent within the limitation period of thirty days prescribed under Section 138(b).
The Counsel for the Petitioners argued that the legal demand notices were not issued by the complainant Company within 30 days of the receipt of information regarding dishonor of the cheques, i.e., from the date of the return memos. On the other hand, Respondents argued that they were only intimated of the dishonor of the cheques in question only when its Bank sent the aforesaid return statements, and the legal demand notices were issued within 30 days thereafter.
The Court in this relied on Econ Antri Limited v. Rom Industries Limited and Another (2014) 11 SCC 769, to observe -
"It is discernible that the words "of and from"used under Section 138 of the act does not imply different meanings. It is safe to infer that the use of the word „of‟ in Section 138(b) N.I. Act does not imply either that the day on which information regarding dishonor of cheque is received by the complainant from the bank is to be included while computing the limitation period for issuance of a valid legal notice".
The Court finally observed, "While computing the limitation period of 30 days prescribed under Section 138(b) N.I. Act for issuance of a valid legal notice, the day on which intimation is received by the complainant from the bank that the cheque in question has been returned unpaid has to be excluded".
Accordingly, the Court dismissed the Petitions.