Court dismisses petitions as legal notices issued within statutory period

The court dismissed the petitions, finding that the legal demand notices were issued within the statutory period of thirty days as required by Section 138(b) of the Negotiable Instruments Act, 1881. The complaints were deemed not time-barred, and the defense regarding the complainant company's prior knowledge of the dishonor of the cheques remains available to the petitioners for trial.

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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 Notices

The 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.

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