TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 408
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....various orders passed by Hon'ble Supreme Court in Suo Motu WP(C) No.3 of 2020 9 to 13 8 to 19 2.3 Reference to judgments of the Hon'ble Supreme Court wherein, the object of Act of 1881 has been detailed 14 & 15 19 to 24 2.4 Summary of factors which weighed with this Court for dismissing the petition 19 26 to 30 2. Learned counsel for the petitioner has submitted that in the present case, cheque for an amount of Rs.1,53,02,122/- dated 16.09.2020 was returned on 17.09.2020, with the remarks "Funds Insufficient/Dormant Account" and legal notice was issued on 29.09.2020 and the complaint was instituted on 21.10.2020 and the summoning order was passed on 21.01.2021. It is contended that the petitioner is seeking to challenge the complaint and summoning order solely on the ground that as per the Order dated 08.03.2021, passed by the Hon'ble Supreme Court in Suo Motu WP (C) No.3 of 2020 (Annexure P-4), the period from 15.03.2020 till 14.03.2021,was to be excluded in computing the period under proviso (b) and (c) of Section 138 of the Act of 1881 and any other law, which prescribed period(s) of limitation for instituting the proceedings. It is further contended that in t....
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....hat period of one month stipulated under Section 142(b) of the Act of 1881 for filing of such complaint has expired. Learned counsel for the petitioner has submitted that the first question was answered in the negative and the said finding would support the plea raised by him in the present case. 5. This Court has heard the learned counsel for the petitioner and has perused the paper book. 6. The order passed by the Hon'ble Supreme Court in Suo Motu WP(C) No. 3/ 2020, on 23.03.2020 and the subsequent orders passed prior to 08.03.2021, have not been annexed with the present petition and on a query put by this Court, learned counsel for the petitioner has supplied copies of the orders dated 23.03.2020, 06.05.2020, 08.06.2020, 06.07.2020, 10.07.2020, 03.03.2021, 04.03.2021, which are collectively taken on record as Mark "A". Learned Counsel for the petitioner has stated that the said orders are all the Orders passed in Suo Motu WP (C) No.3 of 2020 prior to the order dated 08.03.2021. It is submitted that the Order dated 08.03.2021 and the orders passed subsequent thereto, have already been annexed with the present petition. 7. The chronological list of events leading to the fil....
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....mplaint under Section 138 of the Act of 1881 filed (re: page 13 of the paper book). ix) 21.01.2021(P-2 Pg 22):Summoning Order passed by the JMIC, Chandigarh summoning the petitioner under Section 138 of the Act of 1881, for 01.04.2021 (re: page 22 of the paper book) x) The petitioner did not appear and thus, warrants including non-bailable warrants issued (re: order dated 05.04.2022 P-3 Pg 23) xi) 08.03.2021 (P-4 Pg 24):- Order passed by the Hon'ble Supreme Court on which reliance has been placed upon by the learned counsel for the petitioner. The said order has been passed after the summoning order dated 21.01.2021 passed in the present case. In the said order, the term "instituting proceedings" has been mentioned and the said term as well as a reading of the order as a whole, would clearly show that the same has been passed in order to give benefit to the persons who have to institute a case/complaint, by extending the period of limitation for filing of the said case. Even in the said order there is no embargo to file a complaint under Section 138 of the Act of 1881. xii) 16.04.2021:-The Hon'ble Supreme Court of India had in another Suo Motu proceedings i.e., Suo Motu Wri....
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.... Hon'ble Supreme Court in SMW (c) no. 3 of 2020 starting from 23.03.2020.On 23.03.2020, the Hon'ble Supreme Court had passed the following order:- "This Court has taken Suo Motu cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 Virus and resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/ appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State). To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings. We are exercising this power under Article 142 read with Article 141 of the Constitution of India and declare that this order is....
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....ceedings under section 138 of the Negotiable Instruments Act, 1881;" In view of this Court's earlier order dated 23.03.2020 passed in Suo Motu Writ Petition (Civil) No.3/2020 and taking into consideration the effect of the Corona Virus (COVID 19) and resultant difficulties being faced by the lawyers and litigants and with a view to obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunal across the country including this Court, it is hereby ordered that all periods of limitation prescribed under the Arbitration and Conciliation Act, 1996 and under section 138 of the Negotiable Instruments Act 1881 shall be extended with effect from 15.03.2020 till further orders to be passed by this Court in the present proceedings. In case the limitation has expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown. In view of the above, the instant interlocutory application is disposed of. IA No.483....
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....etition (C) No. 3/2020, by our order dated 23.03.2020 and 06.05.2020, we ordered that all periods of limitation prescribed under the Arbiration and Conciliation Act, 1996 shall be extended w.e.f. 15.03.2020 till further orders. Learned Attorney General has sought a minor modification in the aforesaid orders. Section 29A of the Arbitration and Conciliation Act, 1996 does not prescribe a period of limitation but fixes a time to do certain acts, i.e. making an arbitral award within a prescribed time. We, accordingly, direct that the aforesaid orders shall also apply for extension of time limit for passing arbitral award under Section 29A of the said Act. Similarly, Section 23(4) of the Arbitration and Conciliation Act, 1996 provides for a time period of 6 months for the completion of the statement of claim and defence. We, accordingly, direct that the aforesaid orders shall also apply for extension of the time limit prescribed under Section 23(4) of the said Act. The application is disposed of accordingly. Pre-Institution Mediation and Settlement under Section 12A of the Commercial Courts Act, 2015. Under Section 12A of the Commercial Courts Act, 2015, time is prescribed for....
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....d that the said period has not been prescribed by any statute but it is a period prescribed by the Reserve Bank of India under Section 35-A of the Banking Regulation Act, 1949 and thus, the Hon'ble Supreme Court did not consider it appropriate to interfere with the period prescribed by the Reserve Bank of India. It was, however, left to the Reserve Bank of India in its discretion to alter such period. There is nothing on record to suggest that any such period was altered by the Reserve Bank of India nor any such argument has been raised before this Court. Thus, a person who had a cheque in his favour, the validity of which is for a limited period, was required to present the same within the aforesaid period, as, in case, he did not present it to the concerned bank within the said period, then, there could be a possibility of his cheque becoming invalid. Thus, no fault could be found with the complainant in the present case who had chosen to present the cheque within its validity period and after the dishonour of the cheque on account of "funds insufficient/dormant account" vide return memo date 17.09.2020, issued a legal notice dated 29.09.2020 and after the petitioner had fail....
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.... cases filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter 'the Act') pending at various levels, a Division Bench of this Court consisting of two of us (the Chief Justice of India and L. Nageswara Rao, J.) decided to examine the reasons for the delay in disposal of these cases. The Registry was directed to register a Suo Motu Writ Petition (Criminal) captioned as "Expeditious Trial of Cases under Section 138 of N.I. Act 1881". Mr. Sidharth Luthra, learned Senior Counsel was appointed as Amicus Curiae and Mr. K. Parameshwar, learned Counsel was requested to assist him. Notices were issued to the Union of India, Registrar Generals of the High Courts, Director Generals of Police of the States and Union Territories, Member Secretary of the National Legal Services Authority, Reserve Bank of India and Indian Banks' Association, Mumbai as the representative of banking institutions. Xxx xxx xxx xxx 24. The upshot of the above discussion leads us to the following conclusions: 1) The High Courts are requested to issue practice directions to the Magistrates to record reasons before converting trial of complaints under Section 138 of the Act from summar....
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....ght weeks. Further hearing in this matter will be before 3-Judges Bench. 26. We place on record our appreciation for the valuable assistance rendered by Mr. Sidharth Luthra, learned Senior Counsel and Mr. K. Parameshwar, learned Counsel, as Amici Curiae. ......................CJI. [ S. A. BOBDE ] ..................................J. [ L. NAGESWARA RAO ] ........................J. [B. R. GAVAI ] ............................J. [ A. S. BOPANNA ] ....................................J. [ S. RAVINDRA BHAT ]" The present petitioner apparently only wants to delay the final adjudication of the proceedings under Section 138 of the Act of 1881, as neither the petitioner has raised any ground to the effect that the cheque in question was not issued by the petitioner nor is the petitioner ready to honour the cheque even now and even in case, the sole argument raised by the learned counsel for the petitioner is accepted then also, at best, the present proceedings would be set aside and the complainant would be given the liberty to file a fresh complaint and it is not that the petitioner would be absolved of his liability under Section 138 of the Act of 1881. Moreover, the present pet....
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....onise with the object of the statue, and which effectuate the object of the legislature. If an expression is susceptible of narrow or technical meaning, as well as a popular meaning the court would be justified in assuming that the legislature used the expression in the sense which would carry out its object and reject that which renders the exercise of its power invalid" 33. Applying the above rule of interpretation and the provisions of Section 138, we have no hesitation in holding that a prosecution based on a second or successive default in payment of the cheque amount should not be impermissible simply because no prosecution based on the first default which was followed by statutory notice and a failure to pay had not been launched. If the entire purpose underlying Section 138 of the Negotiable Instruments Act is to compel the drawers to honour their commitments made in the course of their business or other affairs, there is no reason why a person who has issued a cheque which is dishonoured and who fails to make payment despite statutory notice served upon him should be immune to prosecution simply because the holder of the cheque has not rushed to the court with a complain....
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....the existing provisions were made. Though, in this reference, we are not directly concerned with these amendments but they do indicate the anxiety of the Legislature to make the provisions more result oriented. Therefore, while construing the provision, the object of the legislation has to be borne in mind. Xxx xxx 6. As noted hereinbefore, Section 138 of the Act was enacted to punish unscrupulous drawers of cheques who, though purport to discharge their liability by issuing cheque, have no intention of really doing so. Apart from civil liability, criminal liability is sought to be imposed by the said provision on such unscrupulous drawers of cheques. Xxx xxx Xxx xxx 17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (....
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.... of the period from 15.03.2020 till 14.03.2021 for the purpose of instituting proceedings including the proceedings under section 138 of the Act of 1881 and other laws. The usage of the word "instituting" proceedings in paragraph 3, makes it clear that the same is only for the above purpose and cannot, in the understanding of this Court, be construed to mean that the same would enlarge the time granted to the accused person to make the payment of the cheque amount. iv) The orders passed by the Hon'ble Supreme Court do not restrain the complainant or any person from instituting the proceedings during the period of the pandemic. 17. With respect to the judgment of the Hon'ble Supreme Court in Yogendra Pratap Singh's case (Supra), which has been relied upon by the learned counsel for the petitioner, it would be relevant to note that the said case was a case in which, the complaint under Section 138 had been filed prior to the expiry of 15 days from the service of legal notice and was thus, held to be premature. In the present case, complaint dated 21.10.2020 has been filed after the expiry of 15 days from the date of service of the notice and the said fact has not been chal....
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....rrants including non-bailable warrants were issued as the petitioner did not join the proceedings and after a delay of 1 year and 3 months from the date of passing of the summoning order, the petitioner has chosen to file the present petition without appearing before the trial court. iii) None of the orders passed by the Hon'ble Supreme Court from 23.03.2020 till 10.01.2022, put any embargo upon the complainant to institute the complaint under Section 138 of the Act of 1881. iv) The said orders of the Hon'ble Supreme Court are for the benefit of the complainant who could not institute the complaint under Section 138 on account of the COVID-19 pandemic and cannot be construed to the disadvantage of the litigants who in spite of the pandemic, were vigilant to institute their complaints in accordance with the provisions of the Act of 1881. v) A perusal of the order of the Hon'ble Supreme Court dated 10.07.2020, would show that the argument raised therein, with respect to granting extension qua the period of validity of the cheque, had been rejected, thus, necessarily requiring the holder of a cheque to present the cheque during the period of its validity, which could be elapsing....