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        Case ID :

        2010 (2) TMI 1318 - HC - Indian Laws

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        Section 138 notice service and limitation: complaint remained timely after valid service of the third notice. Where notice after cheque dishonour could not be served because the drawer was not found at the address, the payee was not defeated in a prosecution under ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Section 138 notice service and limitation: complaint remained timely after valid service of the third notice.

                          Where notice after cheque dishonour could not be served because the drawer was not found at the address, the payee was not defeated in a prosecution under Section 138 of the Negotiable Instruments Act. The cause of action arose only after valid service of the third notice and expiry of the statutory fifteen-day period without payment; a complaint filed within thirty days thereafter was within limitation. The concurrent finding that the third notice was duly served was a finding of fact, and the revisional court was not justified in disturbing it. The complaint was therefore not time-barred and the statutory requirements of Section 138 were satisfied.




                          Issues: Whether the complaint under Section 138 of the Negotiable Instruments Act was barred by limitation on the ground that the cause of action had to be computed from the first notice sent after dishonour of the cheque, and whether the revisional court could interfere with the concurrent finding that the third notice was duly served and the complaint was filed within time.

                          Analysis: The cheque was dishonoured for insufficiency of funds and the first two notices sent by the complainant were returned unserved because the addressee was not found at the address. The third notice was admittedly served, and the drawer did not make payment within fifteen days of service. The Court applied the principle that where the notice cannot be served for reasons such as the drawer's non-availability, the payee is not defeated in the prosecution under Section 138, and the cause of action arises upon expiry of the statutory period after valid service of notice. The complaint filed within thirty days thereafter was therefore within limitation. The concurrent finding of service of notice was a finding of fact and did not call for interference in revision.

                          Conclusion: The complaint was not time-barred, the statutory requirements under Section 138 were satisfied, and no revisional interference was warranted.


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                          ActsIncome Tax
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