Whether accused can seek his discharge if complaint was filed after expiry of period of limitation?

Even otherwise, before quashing the criminal proceedings on

the ground of limitation, the High Court could have decided whether

sufficient cause was made out by the appellant under the proviso to

Section 142(b) of the Act, and if satisfied, it could have condoned the

delay. Alternatively, the High Court could have remanded the matter

to the Trial Court to determine the issue. In support of his

submissions, he placed reliance on a judgment of this Court in

Rakesh Kumar Jain Vs. State (Through CBI) (2000) 7 SCC 656, in

which while considering the provisions of Section 473, Cr.P.C. and

deciding the question whether on the ground of limitation, the

accused is entitled to seek his discharge, this Court held:

“The mere fact that the complaint was filed 25 days after

the expiry of the period of limitation did not entitle the

accused to seek his discharge under Section 245, Cr.P.C

because the complainant has, under law, a right to seek

for extension of time under Section 473 Cr.P.C. The

complainant could satisfy the Magistrate on the facts and

circumstances of the case that the delay was explainable

which was occasioned on account of their bona fide belief

to obtain the sanction for the purpose of filing the

complaint”.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1684 OF 2014

PAWAN KUMAR RALLI  Vs  MANINDER SINGH NARULA

N.V. RAMANA, J.

Dated:AUGUST 11, 2014

Citation:(2014)15 SCC245

2. This appeal arises out of the judgment and order dated 15th

January, 2013 of the High Court of Delhi passed in Criminal

Miscellaneous Case No. 2961 of 2012 filed by the respondent herein

under Section 482 of the Criminal Procedure Code. By the said

judgment, the High Court quashed the criminal proceedings initiated

by the appellant under Section 138 of the Negotiable Instruments Act,

1881 (hereinafter referred to as ‘the Act’) against the respondent.

3. The brief history of the case, according to the appellant, is that

he had given a loan of Rs.60 lakhs to the respondent in the month of

November, 2011. In discharge of his obligation to the appellant, on

25th April, 2012, the respondent issued (i) Cheque No. 889953, drawn

on Allahabad Bank, for Rs.30 lakhs; (ii) Cheque No. 545420, drawn

on ICICI Bank, for Rs.20 lakhs; and (iii) Cheque No. 545409, drawn

on ICICI Bank, for Rs. 10 lakhs. When the appellant presented the

said cheques in his Bank for realization, they were dishonoured by

the respondent’s banker with remarks ‘Stop Payment’.

4. The appellant, after receiving the communication from his

banker about the dishonour of Cheques, issued a handwritten notice

(Annexure P4) to the respondent on 27th April, 2012 calling upon him

to make the payment. Upon non-compliance by the respondent, a

formal legal notice dated 24th May, 2012 (Annexpure P5) was issued

under Section 138/142 of the Act requiring the respondent to pay the

cheques amount along with interest and costs. In his reply to the legal

notice, the respondent totally disagreed with the allegation of taking

2Page 3

loan from the appellant. Subsequently, the appellant filed a Complaint

Case against the respondent invoking Sections 138, 141 and 142 of

the Act and Section 420, of the Indian Penal Code. The Metropolitan

Magistrate took cognizance and summoned the respondent who

pleaded not guilty and claimed to be tried.

5. During the pendency of trial, the respondent filed Criminal

Miscellaneous Case before the High Court under Section 482,

Cr.P.C. for quashing of criminal proceedings pending before the Trial

Court. The High Court expressed the view that the complaint was not

filed within a period of one month after the expiry of 15 days of receipt

of the notice dated 27th April, 2012 and hence it was barred by

limitation under Section 142(b) of the Act and by the impugned

judgment quashed the criminal proceedings against the respondent.

Aggrieved by the order of the High Court, the appellant-complainant

approached this Court by way of Special Leave Petition.

6. Before us, the case of the appellant is that the High Court was

not justified in exercising extra ordinary jurisdiction under Section

482, Cr.P.C. The High Court incorrectly considered the handwritten

note as legal notice and calculated the limitation period accordingly.

Whereas, the handwritten note was only an intimation to the accused

and according to the provisions of law, the actual notice within 30

days from the date of dishonour of the cheques, was issued on 24th

May, 2012 and accordingly criminal proceedings were initiated well

within the limitation period. But, the High Court failed to take into

consideration this material fact and merely on the ground of 25 days

delay from the date of service of handwritten note, quashed the

criminal proceedings. The High Court ignored the fact that the Act

clearly enables the Court to condone the delay, if any, beyond 30

days of limitation period under proviso to Section 142(b) of the Act.

7. During the course of hearing, we felt it justifiable to have

assistance of a senior counsel and we accordingly appointed

Mr. Huzefa Ahmadi, learned senior counsel as Amicus Curiae.

8. Learned Amicus submitted that the handwritten note dated 27th

April, 2012 whereby the appellant called upon the respondent to

make payment, would fall within the four corners of ‘notice’ under

Section 138(b) of the Act and there was a delay of 25 days in filing

the Complaint under the provisions of the Act. He further submitted

that the proviso to Section 142(b) of the Act confers power on the

Court to condone the delay, if the complainant satisfies the Court on

the part of delay. As it was believed by the Trial Court that since the

legal notice was issued on 24th May, 2012 the limitation period would

come into force from that date only, there was no occasion for the

appellant to plead for sufficient cause for condonation of delay as the

question of delay did not arise before the Trial Court. While issuing

process, the Trial Court was clearly of the view that the Complaint

was within limitation on the basis of averments made in the

Complaint. Therefore, the occasion did not arise for the appellant to

raise the plea of ‘sufficient cause’ for the delay. Moreover, the

respondent had also not raised the question of limitation before the

Trial Court and the issue of limitation was raised for the first time

before the High Court.

9. Even otherwise, before quashing the criminal proceedings on

the ground of limitation, the High Court could have decided whether

sufficient cause was made out by the appellant under the proviso to

Section 142(b) of the Act, and if satisfied, it could have condoned the

delay. Alternatively, the High Court could have remanded the matter

to the Trial Court to determine the issue. In support of his

submissions, he placed reliance on a judgment of this Court in

Rakesh Kumar Jain Vs. State (Through CBI) (2000) 7 SCC 656, in

which while considering the provisions of Section 473, Cr.P.C. and

deciding the question whether on the ground of limitation, the

accused is entitled to seek his discharge, this Court held:

“The mere fact that the complaint was filed 25 days after

the expiry of the period of limitation did not entitle the

accused to seek his discharge under Section 245, Cr.P.C

because the complainant has, under law, a right to seek

for extension of time under Section 473 Cr.P.C. The

complainant could satisfy the Magistrate on the facts and

circumstances of the case that the delay was explainable

which was occasioned on account of their bona fide belief

to obtain the sanction for the purpose of filing the

complaint”.

10. Learned Amicus finally submitted that the legislative intent in

inserting the proviso to Clause (b) of Section 142 of the Act was only

to protect the Cheque holders from the defaulters who issued the

Cheques and the Court should act reasonably in providing an

opportunity to the Cheque holder to present his version on the issue

of delay if any. After taking into consideration the reasons advanced

by the Cheque holder, the Court should consider the question of

delay and then only it should pass an order. But in the present case,

the High Court adopted an unhealthy approach by passing the

impugned order quashing the criminal proceedings on the ground of

limitation, that too for a delay of only 25 days, without considering the

appellant’s reasons for the delay. He further submitted that the

observation of the High Court in the impugned order that “allowing the

appellant to pursue the Complaint against the respondent would be

an abuse of process” is also not in the interest of justice.

11. Learned counsel for the respondent, on the other hand,

contended that there is no apparent error in the judgment of the High

Court in quashing the criminal proceedings on the ground of

limitation. The High Court has correctly treated the handwritten notice

sent by the appellant on 27th April, 2012 as a valid notice in terms of

Section 138 of the Act as the appellant had given the notice in writing

within fifteen days of information of dishonour of the Cheuqes from

his banker. In support of this contention learned counsel has cited the

judgment of this Court in Central Bank of India & Anr. Vs. Saxons

Farms & Ors. (1999) 8 SCC 221 wherein this Court held that though

no form of notice is prescribed in Clause (b) of Section 138 of the Act,

the requirement is that notice shall be given in writing within fifteen

days of receipt of information from the bank regarding return of the

Cheque as unpaid and in the notice a demand for payment of the

amount of the Cheque has to be made. So, learned counsel argued

that looking at this settled legal position, the first notice issued by the

appellant on 27th April, 2012 had since fulfilled the criteria laid down

by this Court, the same has to be treated as ‘notice’ within the

meaning of Section 138(b) of the Act. Therefore, he submitted that

the High Court was right in considering the handwritten note as

‘notice’ for the purpose of calculating delay in filing the Complaint and

it rightly declared that the Complaint was barred by limitation.

12. Learned counsel for the respondent further contended that

even though the proviso to Section 142(b) of the Act facilitates

condonation of delay if the complainant satisfies the Court that he

had cogent reasons for not making the complaint within the limitation

period, in the present case the complainant had made no request

before the High Court for availing such benefit of condonation of

delay. To substantiate his argument, learned counsel relied upon the

counter affidavit filed by the appellant before the High Court and

submitted that there also the appellant, instead of pleading for

condonation of delay, took the stand that the communication dated

27th April, 2012 shall not be treated as notice, whereas it fulfilled all

ingredients of a ‘notice’ under Section 138 of the Act. In support of his

claim that the matter is barred by limitation and requires to be

dismissed at the threshold itself, he relied on this Court’s Judgment in

Ramesh Chand Sharma Vs. Udham Singh Kamal & Ors. (1999) 8

SCC 304 and submitted that in that case also despite the objection of

limitation raised by the appellants, the first respondent did not file any

application for condonation of delay and this Court had dismissed the

O.A. filed by the first respondent, on the ground of limitation.

13. Learned counsel for the respondent therefore firmly opposed

the plea of the learned Amicus that the matter has to be remanded

back to the Trial Court for hearing the issue of limitation by providing

an opportunity to the appellant to avail the remedy envisaged under

the proviso to Section 142(b) of the Act. He finally submitted that the

High Court was right in quashing the criminal proceedings and the

impugned order does not call for interference of this Court under

Article 136 of the Constitution.

14. We have heard learned counsel at length. In view of the

conflicting approach adopted by the High Court in determining the

issue of limitation which subsequently led to the quashing of criminal

proceedings pending before the Trial Court, the following issues

emerge for our consideration for the disposal of this matter:

(a) Whether the handwritten note sent by the appellant

on 27th April, 2012 to the respondent could be

treated as ‘notice’ or the notice issued by the

advocate on 24th May, 2012 could only be treated

as ‘notice’ within the meaning of Section 138 of the

Act?

(b) If there was any delay in filing the Complaint in the

present case, whether such delay could have been

condoned by the High Court in accordance with the

provisions of the Act?

(c) Whether the High Court was right in quashing the

criminal proceedings on the ground of limitation or

instead of quashing the criminal proceedings it

ought to have remitted the matter back to the Trial

Court for deciding the issue of limitation?

15. Before embarking on the above issues, we may notice that the

proviso appended to Section 138 of the Act limits the applicability of

the main provision stating:

138. Dishonour of cheque for insufficiency, etc. of

funds in the account.—

… … …

Provided that nothing contained in this section shall apply

unless—

(a) the cheque has been presented to the bank within a

period of six months from the date on which it is

drawn or within the period of its validity, whichever

is earlier;

(b) the payee or the holder in due course of the

cheque, as the case may be, makes a demand

for the payment of the said amount of money by

giving a notice in writing, to the drawer of the

Cheque, within thirty days of the receipt of

information by him from the bank regarding the

return of the Cheque as unpaid; and

(c) the drawer of such Cheque fails to make the

payment of the said amount of money to the payee

or, as the case may be, to the holder in due course

of the Cheque, within fifteen days of the receipt of

the said notice.”

16. Section 142 of the Act also puts a limitation on the power of the

Court to take cognizance of the offences, which reads as under:

142. Cognizance of offences—Notwithstanding anything

contained in the Code of Criminal Procedure, 1973 (2 of

1974),—

(a) no court shall take cognizance of any offence

punishable under Section 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 which the cause of action arises under

clause (c) of the proviso to Section 138:

Provided that the cognizance of a complaint may be

taken by the Court after the prescribed period, if the

complainant satisfies the court that he had sufficient

cause for not making a complaint within such period.

(c) no Court inferior to that of a Metropolitan Magistrate

or a Judicial Magistrate of the First Class shall try

any offence punishable under Section 138.

17. Admittedly, in the case on hand, the Cheques in question were

issued by the respondent and the same were dishonoured by the

Bank on his instructions of ‘stop payment’. Two communications, one

a handwritten note dated 27th April, 2012 by the appellant himself

and the other a formal legal notice dated 24th May, 2012 issued by

the advocate, were served on the respondent calling upon him to pay

the Cheque amounts. The respondent did not respond to the

handwritten communication, but has replied to the legal notice issued

through advocate on 24th May, 2012 denying the allegation. Upon

failure of the respondent to obey the handwritten communication as

well as the legal notice, the appellant initiated criminal proceedings by

filing Complaint Case on 5th July, 2012. It appears that the

respondent contested the matter before the Trial Court and also filed

an application under Section 91, Cr.P.C. warranting the appellant to

produce various documents. He has also moved an application under

Section 410, Cr.P.C. seeking transfer of the Complaint to a different

Court. It is noteworthy that all through out the pendency of

proceedings before the Trial Court, the respondent did not raise the

issue of ‘limitation’. The issue was raised for the first time before the

High Court in Section 482, Cr.P.C. proceedings. The High Court,

considering the handwritten note sent by the appellant on 27th April,

2012 as ‘notice’ under Section 138 of the Act, came to the conclusion

that the complaint is barred by limitation.

18. This Court has already clarified in Central Bank of India &

Anr. (supra) that Section 138 of the Act does not prescribe any

specific form of notice, but mandates that it should be issued in

writing within thirty days (w.e.f. 6-2-2003) of receipt of information

from the banker about the dishonour of Cheque, with a demand to the

drawer for making payment of the said amount.

19. We have perused the handwritten note dated 27th April, 2012

(Annexure P4) and found that it was issued within the mandatory

period of thirty days of dishonour of cheques and contained (a) the

subject amount of Rs.60,00,000/- given by the appellant as loan to

the respondent under promissory notes; (b) the details of Cheque

numbers and dates of issue with amounts and particulars of Bank; (c)

Returning of Cheques by the banker dishonouring them on the

ground of ‘Stop Payment’ by the respondent; (d) a demand for

immediate repayment of the amount; and (d) a caution to the

respondent that in case of failure on the part of respondent, the

appellant would initiate legal proceedings. Thus, in our opinion, the

handwritten note dated 27th April, 2012 fulfilled the mandatory

requirements under clause (b) of proviso to Section 138 and could be

said to be a valid ‘notice’ in the light of this Court’s Judgment in

Central Bank of India & Anr. (supra). Moreover, this document

(Annexure P4) stands admitted by the appellant in his cross

examination also. Therefore, in our opinion, the High Court has

committed no error in considering the handwritten note dated 27th

April, 2012 as ‘notice’ under Section 138 of the Act.

20. However, when the issue of limitation has come up for the first

time before the High Court, it ought to have dealt with the same on

merits as per proviso to Section 142(b) of the Act. The said proviso

appended to clause (b) of Section 142 of the Act was inserted by the

Negotiable Instruments (Amendment and Miscellaneous Provisions)

Act, 2002 and the legislative intent was, no doubt, in order to

overcome the technicality of limitation period. The Statement of

Objects and Reasons appended to the Amendment Bill, 2002

suggests that the introduction of this proviso was to provide discretion

to the Court to take cognizance of offence even after expiry of the

period of limitation [See MSR Leathers Vs. S. Palaniappan (2013) 1

SCC 177]. Only with a view to obviate the difficulties on the part of

the Complainant, Parliament inserted the proviso to clause (b) of

Section 142 of the Act in the year 2002. It confers a jurisdiction upon

the Court to condone the delay [See Subodh S. Salaskar Vs.

Jayprakash M. Shah (2008) 13 SCC 689].

21. It is no doubt true that at the time of filing the complaint, the

Magistrate has to take cognizance of the complaint when it is within

limitation and in case of delay in filing the complaint, the complaint

has to come up with the application seeking condonation of delay.

But, the peculiar fact of the present case is that in the complaint, the

complainant had only averred that he has sent the legal notice dated

24th May, 2012 but not mentioned about the handwritten note dated

27th April, 2012. Basing on the said averment, the learned Trial Judge

was satisfied that the complaint is within the prescribed period of

limitation. Hence, in this case, raising the plea of limitation and Court

exercising the discretion to condone the delay did not arise at all.

22. In the peculiar facts and circumstances of the case, while

keeping in mind the legislative intent and the specific plea of the

appellant raised in the grounds for the Special Leave Petition that he

should have been allowed to move an application for condonation of

delay before the Trial Court as the respondent has not suffered any

prejudice by reason of 25 days delay, we strongly feel that the

appellant should not have been deprived of the remedy provided by

the Legislature. In fact, the remedy so provided was to enable a

genuine litigant to pursue his case against a defaulter by overcoming

the technical difficulty of limitation. Hence, the High Court has

committed an error by not considering the issue of limitation on

merits.

23. In view of the settled principles of law in Rakesh Kumar Jain,

MSR Leathers. Subodh S. Salaskar (supra) and in the peculiar

facts and circumstances of the case, we are of the considered

opinion that the High Court was not right in quashing the complaint

merely on the ground that complaint is barred by limitation, that too a

plea which was taken for the first time before the High Court. On the

other hand, the High Court ought to have remanded the matter to the

Trial Court for deciding the issue of limitation.

24. At the same time, we want to make it very clear that by this

observation we are not laying down a legal proposition that without

even filing an application seeking condonation of delay at an initial

stage, complainant can be given opportunity at any stage of the

proceeding. As already discussed by us in the foregoing paragraphs,

we have come to the irresistible conclusion, to afford an opportunity

for the complainant to move an application seeking condonation of

delay, under the peculiar facts and circumstances of the case.

25. For all the aforesaid reasons, in order to meet the ends of

justice, we exercise our discretion under Article 142 of the

Constitution and set aside the impugned judgment of the High Court

quashing the criminal proceedings and restore the criminal

proceedings before the Trial Court. The appellant is permitted to file

an application for condonation of delay before the Trial Court and if

such an application is filed, the Trial Court shall be at liberty to

consider the same on its own merits, without being impressed upon

by any of the observations by this Court, and pass appropriate

orders.

26. We are thankful to Mr. Huzefa Ahmadi, learned amicus curiae,

for his able assistance.

27. The appeal stands allowed with the aforesaid observations.

….……………………………….J.

(RANJANA PRAKASH DESAI)

.....………………………………J.

 (N.V. RAMANA)

NEW DELHI

AUGUST 11, 2014

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