2018 (3) TMI 640 - HC - Indian Laws

Exclusion of Dishonoured Cheque Date in Notice Period Calculation

The Supreme Court ruled in the case that the date of receiving information about the dishonoured cheque should be excluded when calculating the statutory ... Service of notice - time limitation - dishonor of cheque - contention of the respondents was that the notice was required to be issued within a period of thirty days whereas the notice had been issued on the 31st day - whether Section 9 of the General Clauses Act, 1897, is applicable to the statutory notice under section 138 of the Act? - whether the day on which the information is received by the complainant from the bank that the cheque has been dishonoured is to be included or excluded while computing the 30-day period prescribed for issuing the statutory notice? Held that: - The Supreme Court in Econ Antri Limited [2013 (9) TMI 246 - SUPREME COURT] has held that the words “from” and “of” used in section 138 convey the same meaning i.e. “after” and accordingly the date on which the cause of action arises has to be excluded while calculating the period of limitation under Section 138 as well as 142 of the Act - Seen from that perspective, the date on which the petitioner received the information of the dishonour of the cheque (i.e. 23.12.2006) is to be excluded for the purposes of computing the period of 30 days available under the Act for issuance of notice. On excluding the date 23.12.2006, from considering, it is seen that the notice issued on 22.01.2007 has been issued on the 30th day, which would bring the said notice within the period prescribed. Petition allowed - decided in favor of petitioner. Issues:1. Interpretation of the statutory notice period under Section 138 of the Negotiable Instruments Act, 1881.2. Applicability of Section 9 of the General Clauses Act, 1897 to the statutory notice under Section 138 of the Act.Analysis:Issue 1: The petitioner challenged an order dismissing their complaint under Section 138 of the Act due to a belatedly issued statutory notice. The Revisional Court allowed the respondent's revision petition, citing the notice was issued on the 31st day after receiving information about the dishonoured cheque. The petitioner argued that the date of receipt should be excluded based on the General Clauses Act, 1897. The Revisional Court relied on Shiv Kumar vs. Natarajan, stating the notice was beyond the prescribed period.Issue 2: The petitioner contended that the Revisional Court erred in relying on Shiv Kumar (supra) as it was a two-judge decision, whereas a three-judge bench in Econ Antri Limited vs. Rom Industries Limited clarified that the date of receipt should be excluded. The Supreme Court in Econ Antri Limited held that the words 'from' and 'of' in Section 138 have the same meaning, i.e., 'after,' and the date of the cause of action must be excluded for calculating the limitation period under Sections 138 and 142 of the Act.The Supreme Court's ruling in Econ Antri Limited established that the date of receiving information about the dishonoured cheque should be excluded when computing the statutory notice period under Section 138. Therefore, the petitioner's complaint was reinstated, and the impugned order was set aside. The Trial Court was directed to expedite the proceedings due to the considerable time that had elapsed since the cheque's dishonour in 2006.