S 138 NI Act| Court Cannot Take Cognizance Of Complaint Filed Before Expiry Of 15 Days From The Date Of Receipt Of Demand Notice By Accused: Karnataka HC

The Karnataka High Court reiterated that the Court cannot take cognizance of an offence under Section 138 of the Negotiable Instruments Act if the complaint is filed before the expiry of the mandatory 15-days period from the date of receipt of notice by the accused.

The Bench of Justice Anil B Katti placed reliance on the case of Yogendra Pratap Singh Vs. Savitri Pandey and Another, and observed that, "Merely because at the time of taking cognizance by the Court the period of 15 days has expired from the date on which the notice has been serve on the drawer/accused, the Court is not clothed with the jurisdiction to take cognizance of an offence under Section 138 on a complaint filed before the expiry of 15 days from the date of receipt of notice by the drawer of the cheque."

Counsel SB Halli appeared for the appellant, while Counsel AV Ramakrishna appeared for the respondent.

The appellant, dissatisfied with the judgment of the Trial Court in C.C.No.2639/2013 dated 09.10.2014, filed an appeal. The appeal questioned whether the Trial Court's decision on the offence under Section 138 of the Negotiable Instruments Act (N.I. Act) was legally unsustainable.

Upon reviewing the evidence, it was revealed that the complainant and the accused were acquainted with each other. The accused had borrowed Rs. 50,000 from the complainant and issued a cheque dated 10.01.2013, drawn on the State Bank of Mysore, Bengaluru, which later bounced due to insufficient funds. Despite receiving a demand notice from the complainant, the accused failed to respond or repay the amount. The complainant subsequently filed a complaint under Section 142(1)(b) of the N.I. Act.

The complainant argued that the issuance and signature of the cheque were not disputed, and thus, a presumption should favour them. Conversely, the accused contended that the complaint was premature as it was filed before the completion of the mandatory 15-day period after the demand notice. Consequently, the accused argued that the Trial Court's decision to take cognizance of the premature complaint was in violation of Section 138(c) of the N.I. Act, and hence, no further proceedings could be conducted against them for the offence under Section 138.

The High Court ordered that the "Appellant/complainant would be at liberty to institute a fresh complaint and since the earlier complaint could not be presented within the time prescribed by Section 142(b) of N.I.Act, the respondent would be at liberty to seek the benefit of the proviso by satisfying the Trial Court of sufficient cause for the delay in instituting the complaint. In the event that second complaint is filed within a period of one month from the date of this judgment, the Trial Court is directed to dispose of the complaint as expeditiously as possible on giving top priority since it is a matter of 2013."

Appearances:

Appellant: Counsel SB Halli

Respondent: Counsel AV Ramakrishna

Cause Title: MV Lakshminarayanappa vs Hanumanthappa

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