2013 (9) TMI 246 - SC - Companies Law

Computing one-month period under Section 142(b) Negotiable Instruments Act requires excluding first day cause of action arose

Econ Antri Ltd. Versus Rom Industries Ltd. And Another

The SC held that when computing the one-month period under Section 142(b) of the Negotiable Instruments Act for filing complaints, the first day on which ... Interpretation of Section 138 and Section 142(b) of the Negotiable Instruments Act, 1881 - Calculation of Period of one month in Negotiable Instrument Act - Exclusion of first day - Whether for calculating the period of one month which was prescribed under Section 142(b), the period had to be reckoned by excluding the date on which the cause of action arose - Meaning of word 'Of' - Expressions such as ‘from such a day’ or ‘until such a day’. Held that:- While computing the period of one month as provided under Section 142(b) of the N.I. Act, the first day on which the cause of action had arisen had to be excluded - It was not possible to hold that the word ‘of’ occurring in Section 138(c) and 142(b) of the N.I. Act was to be interpreted differently as against the word ‘from’ occurring in Section 138(a) of the N.I. Act; and that for the purposes of Section 142(b), which prescribes that the complaint was to be filed within 30 days of the date on which the cause of action arises, the starting day on which the cause of action arises should be included for computing the period of 30 days. Days included or excluded — When a period of time running from a given day or even to another day or event was prescribed by law or fixed as contract, and the question arises whether the computation was to be made inclusively or exclusively of the first-mentioned or of the lastmentioned day, regard must be had to the context and to the purposes for which the computation had to be made - Where there was room for doubt, the enactment or instrument ought to be so construed as to effectuate and not to defeat the intention of Parliament or of the parties, as the case may be - Expressions such as ‘from such a day’ or ‘until such a day’ are equivocal, since they do not make it clear whether the inclusion or the exclusion of the day named may be intended - As a general rule, however, the effect of defining a period in such a manner was to exclude the first day and to include the last day. Saketh India Ltd. & Ors. v. India Securities Ltd. [1999 (3) TMI 591 - SUPREME COURT], lays down the correct proposition of law - the purpose of calculating the period of one month, which was prescribed u/s 142(b) of the N.I. Act, the period had to be reckoned by excluding the date on which the cause of action arose - SIL Import USA does not lay down the correct law - Needless to say that any decision of this Court which takes a view contrary to the view taken in Saketh by this Court, do not lay down the correct law on the question involved in this reference. Issues Involved:1. Interpretation of Section 138 and Section 142(b) of the Negotiable Instruments Act, 1881.2. Applicability of Section 12 of the Limitation Act, 1963 and Section 9 of the General Clauses Act, 1897.3. Variance between the judgments in Saketh India Ltd. & Ors. v. India Securities Ltd. and SIL Import, USA v. Exim Aides Silk Exporters, Bangalore.Detailed Analysis:1. Interpretation of Section 138 and Section 142(b) of the Negotiable Instruments Act, 1881:The primary issue in this case is whether the period of one month prescribed under Section 142(b) of the NI Act should exclude the date on which the cause of action arose. Section 138(c) of the NI Act mandates that the drawer of a dishonored cheque must make payment within 15 days of receiving notice. Section 142(b) stipulates that a complaint must be filed within one month of the cause of action arising. The Court held that for calculating the period of one month under Section 142(b), the date on which the cause of action arose must be excluded. This interpretation aligns with the principle that the day from which a period is to be reckoned should be excluded, as established in English case law and previous Indian judgments.2. Applicability of Section 12 of the Limitation Act, 1963 and Section 9 of the General Clauses Act, 1897:The Court examined whether Section 12(1) of the Limitation Act, 1963, which excludes the day from which the period is to be reckoned, applies to the NI Act. Although the Limitation Act is generally not applicable to the NI Act, the Court found that the same principle is incorporated in Section 9 of the General Clauses Act, 1897. Section 9 states that for excluding the first day in a series of days, the word 'from' is sufficient. The Court concluded that this principle should be applied to the NI Act, thereby excluding the first day when calculating the period for filing a complaint under Section 142(b).3. Variance between the judgments in Saketh India Ltd. & Ors. v. India Securities Ltd. and SIL Import, USA v. Exim Aides Silk Exporters, Bangalore:The Court noted the conflicting views in Saketh and SIL Import USA. In Saketh, the Court held that the first day should be excluded in computing the time period, relying on English decisions and the principle established in Haru Das Gupta v. State of West Bengal. In contrast, SIL Import USA included the first day in the computation, leading to a different conclusion. The Court in the current case found the reasoning in Saketh more persuasive and consistent with established legal principles. Thus, it held that Saketh correctly interpreted the law, and SIL Import USA did not.Conclusion:The Court concluded that for the purpose of calculating the one-month period under Section 142(b) of the NI Act, the date on which the cause of action arose must be excluded. This interpretation aligns with the principles in Section 9 of the General Clauses Act, 1897, and the established legal rule of excluding the first day in a series of days. Consequently, the judgment in Saketh was upheld as laying down the correct law, while SIL Import USA was found to be incorrect. The reference was answered accordingly, confirming the exclusion of the first day in the computation of the limitation period under the NI Act.