On Tuesday, the Supreme Court drew a clear jurisdictional line in prosecutions under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), ruling that a criminal court cannot assume cognisance of a cheque dishonour complaint filed beyond limitation unless the delay is condoned beforehand. Setting aside a Karnataka High Court decision, the Court held that taking cognisance prior to condonation is not a procedural lapse capable of later correction, but rather an action taken without the authority of law. The Division Bench of Justice Sanjay Kumar and Justice Alok Aradhe clarified the sequencing mandated by Section 142(1)(b) of the NI Act and reinforced the statutory discipline governing cheque dishonour prosecutions
The dispute traces back to an alleged loan of Rs.5.40 lakh advanced to the appellant over a period of several months. A cheque issued towards repayment was subsequently dishonoured due to insufficiency of funds. After the statutory notice was issued, the cause of action under Section 138 of the Negotiable Instruments Act arose.
The complaint, however, was instituted beyond the one-month limitation prescribed under Section 142(1)(b) of the NI Act. Notwithstanding the delay, the Magistrate proceeded to take cognisance at the threshold. Much later, the delay of two days in filing the complaint was condoned on medical grounds. The Karnataka High Court sustained the continuation of the proceedings, holding that taking cognisance prior to condonation amounted to a curable irregularity. Challenging this approach, the accused carried the matter to the Apex Court.
The Appellant argued that the Magistrate lacked jurisdiction to take cognisance of a time-barred complaint without first considering and allowing an application for condonation of delay. It was contended that the statutory scheme does not permit post-facto validation of cognisance taken in breach of limitation.
On the other hand, the Respondent relied on the proviso to Section 142(1)(b) of the NI Act, contending that since the delay was eventually condoned on sufficient cause, the earlier cognisance stood cured. The High Court had accepted this reasoning, holding that the sequence of condonation and cognisance was interchangeable.
The Court observed that “It is manifest from the clear and unambiguous language of the above proviso that the power conferred upon the Court to take cognisance of a belated complaint is subject to the complainant first satisfying the Court that he had sufficient cause for not making the complaint within time.”
The Bench emphasised that the satisfaction leading to condonation must therefore precede the act of taking cognisance, adding that a proceeding filed with limitation-linked delay does not assume the character of a regular case until such delay is condoned.
The Court held that “the approach of the High Court in treating this crucial aspect as a mere interchangeable exercise, i.e., either to first condone the delay or to first take cognisance, is not in keeping with the mandate of the aforestated proviso.”
The Court further clarified that since the complaint was time-barred on the date cognisance was taken, the Magistrate had acted without jurisdiction, and a subsequent order condoning delay could not retrospectively legitimise that action.
The Apex Court concluded that “we have no hesitation in holding that the learned Magistrate erred in taking cognisance of the respondent’s complaint under Section 138 of the NI Act, even before the delay of two days in its presentation was condoned.”
Accordingly, the Karnataka High Court’s order was set aside, and the cheque dishonour complaint was quashed for want of valid cognizance.
Case Title: S. Nagesh v. Shobha S. Aradhya
Case No.: SLP (Crl.) No. 18127 of 2024
Coram: Hon’ble Mr. Justice Sanjay Kumar and Hon’ble Mr. Justice Alok Aradhe
Advocate for the Petitioner: Adv. Ashwin V. Kotemath and AOR Harisha S.R.
Advocate for the Respondent: Adv. Abdul Azeem Kalebudde
Read Judgment@ Latestlaws.com
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