2021 (2) TMI 45 - HC - Indian Laws

Limitation Period Error: High Court Invalidates Summoning Order in Section 138 Complaint

The High Court held that the complaint under Section 138 of the Negotiable Instruments Act was filed beyond the limitation period, rendering the summoning ... Condonation of delay in filing appeal - service of demand notice - Jurisdiction - power of Metropolitan Magistrate to take cognizance of the complaint u/s 138 Negotiable Instruments Act (NI Act) filed by respondent No.2, without that being accompanied by application under Section 142 (b) NI Act for condoning the delay in filing the complaint - HELD THAT:- The crux of the present case is that legal demand notice dated 31.05.2019 was sent on 01.06.2019, which was duly served upon the petitioner on 03.06.2019. The 15 days notice period in this case commenced on 04.06.2019 and lapsed on 18.06.2019. It is not in dispute that in terms of Hon’ble Supreme Court’s decision in M/S. SAKETH INDIA LIMITED AND OTHERS VERSUS M/S. INDIA SECURITIES LIMITED [1999 (3) TMI 591 - SUPREME COURT], one day has to be excluded for counting the one month limitation period and, therefore, excluding the day of 19.06.2019, the limitation period started from 20.06.2019 and the limitation period expired with the day in the succeeding month immediately preceding the day corresponding to the date upon which the period started. Consequently, the limitation period in this case, which commenced on 20.06.2019, expired in the succeeding month on a day preceding the date of commencement i.e. 19.07.2019. Admittedly, the complaint in this case was instituted on 20.07.2019 i.e. 01 day after the limitation period had expired. Hence, both the courts below have fallen in error while computing the period of limitation. Moreover, at the time of filing, the complaint was not even accompanied by an application under Section 142 (b) NI Act for condoning the delay. It is pertinent to mention here that on one hand, Revisional Court in Para-16 of the impugned order (as extracted in Para-10 of this order) has held that as per tracking report and as admitted, petitioner had received the demand notice on 03.06.2019 and on the other hand, in Para-17 the Revisional Court has observed that as per tracking report, the demand notice was received by petitioner on 05.06.2019 and so, the complaint is filed within the limitation period. Revisional Court has erroneously taken into consideration two different dates for service of demand notice while computing the limitation period. It is an admitted fact that the demand notice was served upon petitioner on 03.06.2019 and so, Revisional Court was not required to take into consideration the tracking report showing service of demand notice on 05.06.2019 to justify that the complaint was filed within the limitation period. Petition allowed. Issues Involved:1. Jurisdiction of the Metropolitan Magistrate to take cognizance of the complaint under Section 138 of the Negotiable Instruments Act (NI Act).2. Calculation of the limitation period for filing the complaint under Section 138 of the NI Act.3. Validity of the summoning order issued by the Metropolitan Magistrate.4. Revisional Court's decision upholding the summoning order and its correctness in calculating the limitation period.Issue-wise Detailed Analysis:1. Jurisdiction of the Metropolitan Magistrate:The petitioner argued that the learned Metropolitan Magistrate lacked jurisdiction to take cognizance of the complaint under Section 138 of the NI Act because the complaint was filed beyond the limitation period and was not accompanied by an application under Section 142(b) NI Act for condoning the delay. The petitioner contended that the complaint was filed without correctly calculating the days, making the summoning order illegal and without jurisdiction.2. Calculation of the Limitation Period:The primary contention revolved around the calculation of the limitation period for filing the complaint. The petitioner relied on the Supreme Court's decisions in *Rameshchandra Ambalal Joshi v. State of Gujarat* and *SIL Import, USA v. Exim Aides Silk Exporters* to argue that the complaint was filed beyond the prescribed period. The Revisional Court, while dismissing the petition, held that the demand notice was served on the petitioner on 03.06.2019, and the 15-day notice period lapsed on 18.06.2019. The cause of action accrued on 19.06.2019, and excluding this day, the limitation period started on 20.06.2019 and expired on 19.07.2019. Since the complaint was filed on 20.07.2019, it was deemed to be one day late.3. Validity of the Summoning Order:The summoning order issued by the Metropolitan Magistrate on 26.09.2019 was challenged on the grounds that it was issued without proper jurisdiction and beyond the limitation period. The Revisional Court upheld this order, but the High Court found that the complaint was indeed filed one day after the limitation period had expired, and no application for condoning the delay was filed.4. Revisional Court's Decision:The Revisional Court's decision was scrutinized for its correctness in calculating the limitation period. The Revisional Court initially held that the demand notice was received on 03.06.2019, but later considered another date, i.e., 05.06.2019, for justifying the complaint's timeliness. The High Court found this contradictory and erroneous. The High Court emphasized that the correct date of service was 03.06.2019, and the limitation period should be calculated accordingly. Consequently, the High Court set aside both the Revisional Court's order dated 27.11.2020 and the Metropolitan Magistrate's order dated 26.09.2019.Conclusion:The High Court concluded that the complaint was filed beyond the limitation period, and the orders of the Metropolitan Magistrate and the Revisional Court were erroneous. The petition was allowed, and the impugned orders were set aside. The case was disposed of, and the High Court directed that a copy of the order be sent to the Revisional Court/trial court for necessary information and compliance.