2022 (2) TMI 86 - HC - Indian Laws

Court dismisses petitions as legal notices issued within statutory period

M/s. Rayapati Power Generation Pvt. Ltd. And Anr. Versus Indian Renewable Energy Agency Ltd. (IREDA)

The court dismissed the petitions, finding that the legal demand notices were issued within the statutory period of thirty days as required by Section ... Dishonor of Cheque - service of demand notice - legal demand notices were issued after the expiry of statutory period of 30 days set out under the N.I. Act - Section 138 read with Sections 141/142 of the Negotiable Instruments Act, 1881 - HELD THAT:- In the present case, the primary issue raised by learned counsel for the petitioners during the course of submissions is that the legal demand notices were not issued by the complainant Company within 30 days of the receipt of information regarding dishonor of the cheques, i.e., from the date of the return memos, and thus the complaints are not maintainable. On the other hand, the complainant Company maintains that it was intimated of the dishonor of the cheques in question only when its Bank sent the aforesaid return statements, and the legal demand notices were issued within 30 days thereafter. In view of Econ Antri [2013 (9) TMI 246 - SUPREME COURT], a decision albeit rendered in relation to Section 138(c) and Section 142(b) N.I. Act, it is discernible that the words ‘of’ and ‘from’ used under Section 138 N.I. Act do not imply different meanings. It is safe to infer that the use of the word ‘of’ in Section 138(b) N.I. Act does not imply either that the day on which information regarding dishonor of cheque is received by the complainant from the bank is to be included while computing the limitation period for issuance of a valid legal notice - Applying the law to the facts of the present case, it is noted that the petitioner relies on the dates of return memos, i.e., dates of return of cheques in question, to compute the period of 30 days prescribed in the statute and contends that the legal demands notices were not issued in time. To the contrary, the complainant relies on the dates of receipt of return statements from its Bank, i.e., the dates on which intimation was received regarding dishonor of the cheques in question, to submit that the legal demand notices were issued within the statutory period. This Court is of the prima facie opinion that the legal notices were posted by the complainant Company within 30 days of the receipt of information from its Bank regarding dishonor of the cheques in question and were not time-barred. The contentions raised on behalf of the petitioner do not weigh with this Court and are accordingly rejected - Petition dismissed. Issues Involved:1. Whether the legal demand notices issued by the complainant company were sent within the limitation period of thirty days prescribed under Section 138(b) of the Negotiable Instruments Act, 1881.Detailed Analysis:Issue 1: Timeliness of Legal Demand NoticesThe primary issue in the present case is whether the legal demand notices issued by the complainant company were sent within the statutory period of thirty days as prescribed under Section 138(b) of the Negotiable Instruments Act, 1881 (N.I. Act). The petitioners argue that the notices were issued after the expiry of this period and thus, the criminal complaints are not maintainable.The relevant facts are as follows: The petitioner company issued three cheques to the complainant company, which were dishonored upon presentation. The dates of the cheques, return memos, receipt of return statements, and posting of legal notices are summarized in the table provided in the judgment. The complainant company received the return statements from its bank on 19.06.2015, 29.10.2015, and 27.07.2016, and subsequently posted legal demand notices on 07.07.2015, 28.11.2015, and 26.08.2016 respectively.Legal Framework and Judicial Interpretation:Section 138(b) of the N.I. Act mandates that the payee or holder in due course must issue a demand notice within thirty days of receiving information from the bank regarding the return of the cheque as unpaid. This provision is strictly construed, as the N.I. Act is a penal statute.The Supreme Court in Munoth Investments Ltd. v. Pattukola Properties Ltd. and Another (2001) 6 SCC 582 clarified that the fifteen days for issuing a demand notice are counted from the receipt of information regarding the return of the cheque, not the date of the return itself. Similarly, in N. Parameswaran Unni v. G. Kannan and Another (2017) 5 SCC 737, the Court emphasized that the notice must be served within fifteen days from the date of intimation received from the bank about the dishonor.Further, in Econ Antri Limited v. Rom Industries Limited and Another (2014) 11 SCC 769, the Supreme Court resolved the conflict regarding the interpretation of the words 'from' and 'of' in Section 138 N.I. Act. The Court held that the period prescribed under Section 142(b) of the N.I. Act should be calculated by excluding the date on which the cause of action arose. This principle was reiterated in Rameshchandra Ambalal Joshi v. State of Gujarat and Another (2014) 11 SCC 759 and applied by the Delhi High Court in Simranpal Singh Suri v. State and Another (2021 SCC OnLine Del 236).Application of Law to Facts:In the present case, the complainant company argues that the legal demand notices were issued within thirty days of receiving the return statements from its bank, which is the date of intimation regarding the dishonor of the cheques. The petitioners, however, contend that the notices should have been issued within thirty days from the date of the return memos.Considering the judicial interpretation in Munoth Investments (Supra) and Econ Antri (Supra), the Court concluded that the day on which information regarding dishonor is received by the complainant should be excluded while computing the limitation period. Therefore, the legal notices were posted within the statutory period, and the complaints are not time-barred.Conclusion:The petitions are dismissed, and the miscellaneous applications are disposed of as infructuous. The defense that the complainant company obtained knowledge of the dishonor of the cheques prior to the receipt of return statements remains available to the petitioners and will be a matter of trial.