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        Case ID :

        2022 (3) TMI 1049 - HC - Indian Laws

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        Premature cheque dishonour complaint under the Negotiable Instruments Act is not maintainable before the statutory payment period ends. A complaint under Section 138 of the Negotiable Instruments Act must be filed only after the drawer has had the full statutory 15-day period after service ...
                        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.

                            Premature cheque dishonour complaint under the Negotiable Instruments Act is not maintainable before the statutory payment period ends.

                            A complaint under Section 138 of the Negotiable Instruments Act must be filed only after the drawer has had the full statutory 15-day period after service of demand notice to make payment. Where the complaint is filed before that cause of action arises under Section 142, it is premature and not maintainable in law. On that footing, cognizance taken on such a complaint cannot be sustained, and the settled presumption of service by normal postal course does not cure filing before the statutory waiting period expires.




                            Issues: Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 was maintainable when filed before expiry of the statutory period after service of demand notice, and whether cognizance taken on such complaint was vitiated.

                            Analysis: The cheque was dishonoured for insufficiency of funds and a demand notice was issued, but the complaint was filed before the expiry of the 15-day period contemplated by clause (c) of the proviso to Section 138 and before the cause of action had fully arisen under Section 142. In the absence of returned postal acknowledgment or returned envelope, service of notice was considered on the basis of the normal course of post and the legal presumption of service. Applying the settled position that a complaint filed before the drawer gets the statutory period to make payment is not a complaint in the eyes of law, the Court held that the complaint was premature and that cognizance on such complaint could not be sustained.

                            Conclusion: The complaint was held to be premature, the cognizance was held to be bad in law, and the challenge to the appellate acquittal failed.

                            Final Conclusion: Leave to appeal against the order of acquittal was refused because the appellate court's view on maintainability of the complaint under the cheque dishonour provisions was found to be free from illegality or perversity.

                            Ratio Decidendi: A complaint under Section 138 of the Negotiable Instruments Act, 1881 must be filed only after the drawer has had the full statutory period after service of notice to make payment; a complaint filed before the cause of action arises is not maintainable and cognizance taken on such a complaint is invalid.


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                            ActsIncome Tax
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