Karnataka High Court

Sri. Chudamani S/O. Shivalingayya ... vs Sri. Pundalik S/O. Balachandra ... on 1 August, 2024

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                                                                    NC: 2024:KHC-D:10865
                                                             CRL.A No. 100146 of 2023




                            IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
                                  DATED THIS THE 1ST DAY OF AUGUST, 2024
                                                  BEFORE
                                    THE HON'BLE MS. JUSTICE J.M.KHAZI
                                  CRIMINAL APPEAL NO.100146 OF 2023 (A)
                      BETWEEN:

                      SRI CHUDAMANI
                      S/O. SHIVALINGAYYA CHILLALMATH,
                      AGE: 29 YEARS, OCC: BUSINESS,
                      R/O: HEMBLI ONI, HOSAYALLAPUR,
                      DHARWAD-580001.
                                                                             ...PETITIONER

                      (BY SRI SURESH SHETTEMMANAVAR, ADVOCATE)

                      AND:

                      SRI PUNDALIK
                      S/O. BALACHANDRA PALANKAR,
                      AGE: 37 YEARS, OCC: BUSINESS,
                      R/O: DESAI GALLI,
                      TQ. AND DIST. HAVERI-581110.
                                                                            ...RESPONDENT

                      (NOTICE SERVED TO RESPONDENT)
Digitally signed by
YASHAVANT                    THIS CRIMINAL APPEAL IS FIELD UNDER SECTION 378(4) OF
NARAYANKAR
Location: HIGH        CR.PC., SEEKING TO SET ASIDE THE ORDER PASSED BY THE PRL.
COURT OF
KARNATAKA             SENIOR CIVIL JUDGE AND CJM COURT, DHARWAD IN CRIMINAL
                      CASE     NO.1835/2022    DATED     31.12.2022    ACQUITTING     FOR
                      RESPONDENT FOR THE OFFENCES PUNISHABLE UNDER SECTION
                      138    OF   NEGOTIABLE   INSTRUMENT     ACT     AND   CONVICT   THE
                      RESPONDENT BY ALLOWING THIS CRIMINAL APPEAL PETITION, IN
                      THE INTEREST OF JUSTICE AND EQUITY.


                             THIS CRIMINAL APPEAL, COMING ON FOR ADMISSION, THIS
                      DAY, THE COURT DELIVERED THE FOLLOWING:
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                                         NC: 2024:KHC-D:10865
                                    CRL.A No. 100146 of 2023




CORAM:     THE HON'BLE MS. JUSTICE J.M.KHAZI

                         ORAL ORDER

(PER: THE HON'BLE MS. JUSTICE J.M.KHAZI)

This appeal is by the complainant challenging the

dismissal of complaint filed by him against the accused

alleging offence punishable under Section 138 of the

Negotiable Instruments Act, 1881 (for short, "the N.I.Act"),

on the sole ground that the complainant has failed to

comply with proviso (b) of Section 138 of the N.I.Act, by

failing to issue the demand notice within 30 days from the

date of receipt of information from the Bank regarding the

return of cheque as unpaid.

2. For the sake of convenience, the parties are

referred to as per their ranks before the Trial Court.

3. It is the case of complainant that he is having

retail business in Dharwad. Accused is doing real estate

business. Accused came in contact with the complainant

about 3-4 years back and offered to sell sites. Complainant

arranged amount of Rs.5,50,000/- by taking loan and paid

the same to accused in the month December-2017.

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However, accused failed to develop the sites and therefore

on the insistence of complainant, issued cheque dated

16.03.2020 for Rs.4,00,000/-. However, when presented

for encashment through State Bank of India, main Branch

Dharwad, on 18.03.2020, the cheque returned dishonoured

with endorsement 'funds insufficient'. The accused even

executed a bond acknowledging his liability. Complainant

got issued legal notice dated 04.06.2020 and it was duly

served on the accused on 13.06.2020. However, the

accused failed to repay the amount due under the cheque.

He has also not sent reply to the legal notice. Therefore,

without any alternative complaint is filed.

4. Accused appeared through counsel and

contested the case by pleading not guilty.

5. At the trial, complainant examined himself as

P.W.1 and relied upon Ex.P.1 to Ex.P.5.

6. Accused did not choose to lead any defence

evidence.

7. Vide the impugned Judgment and Order, the

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trial Court dismissed the complaint on the ground that the

demand notice was not issued within 30 days of receipt of

the information regarding the dishonoure of cheque from

the Bank.

8. Aggrieved by the same, the complainant is

before this Court contending that despite drawing the

attention of the trial Court regarding the order passed by

the Hon'ble Supreme Court extending the period of

limitation during the Covid-19 pandemic period, the trial

Court has erred in holding that proviso (b) to Section 138 of

the N.I.Act is not complied with.

9. Notice of this appeal is duly served on the

respondent. However, he has not chosen to appear before

this Court and contest the matter.

10. Thus it is the definite case of the complainant

that the accused issued subject cheque for a sum of

Rs.4,00,000/- towards repayment of part of his liability and

when it was presented through his account, it was

dishonoured on the ground 'funds insufficient' in the

account of the accused. Though, the legal notice sent to the

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accused is duly served on him, he has failed to comply with.

He has also not sent any reply.

11. The trial Court has framed points for

consideration based on the mandatory requirements to be

complied with in order to attract the provisions of Section

138 of the N.I.Act. The trial Court has rightly answered

point Nos.1 and 2 in the affirmative. As per proviso (b) of

Section 138 of the N.I.Act, after receipt of information from

the Bank, the complainant is required to issue legal notice

within 30 days calling upon the accused to pay the amount

due under the cheque, providing 15 days time to the

accused to make payment. After the expiry of 15 days from

the date of service of notice, the complainant would get a

right to file the complainant within one month.

12. In the present case, the cheque in question is

dated 16.03.2020. Complainant presented it for

encashment on the same day. It returned dishonoured on

18.03.2020. Therefore, as per the proviso (b) of Section

138 of the N.I.Act, the complainant was required to issue

notice on or before 17.04.2020. However, complainant has

NC: 2024:KHC-D:10865

got issued notice on 04.06.2020, which is beyond the

period of one month. On this ground, the trial Court has

dismissed the complaint.

13. However, the learned counsel for complainant

has drawn the attention of this Court to the order passed by

the Hon'ble Supreme Court in COGNIZANCE FOR

EXTENTION OF LIMITATION, IN RE (Miscellaneous

Application No.665/2021 in SMW (C) No.3/2020 dated

23.09.2021) reported in (2021) 18 SCC 250. Due to

outbreak of Covid-19 pandemic in March, 2020, the Hon'ble

Supreme Court took Suo Motu cognizance of the difficulties

that might be faced by the litigants in filing the

petitions/applications/suits/appeals/all other proceedings

within the period of limitation prescribed under the general

law of limitation or under any special laws (both Central/ or

State). Vide order dated 23.03.2020, directions were issued

by the Hon'ble Supreme Court extending the period of

limitation with effect from 15.03.2020 till further orders as

under :

NC: 2024:KHC-D:10865

"1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.

2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.

3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

NC: 2024:KHC-D:10865

4. The Government of India shall amend the guidelines for containment zones, to state.

"Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements."

14. As per paragraph No.8 of the said order, the

Hon'ble Supreme Court issued the following directions :

"I. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021.

II. In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance period of limitation remaining, with effect from

NC: 2024:KHC-D:10865

03.10.2021, is greater than 90 days, that longer period shall apply.

III. The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

IV. The Government of India shall amend the guidelines for containment zones, to state.

"Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements."

15. Thus during the Covid-19 pandemic period as

per the order of the Hon'ble Supreme Court, the period of

limitation is extended as detailed in the above order.

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NC: 2024:KHC-D:10865

Therefore, by virtue of the order of the Hon'ble Supreme

Court, the period of limitation of 30 days for issuing the

legal notice stand extended. This fact is not taken into

consideration by the trial Court. Therefore, point No.3 is

also answered in the affirmative. For this reason, the

impugned Judgment and order is liable to be set aside. In

the light of this, the trial Court is required to give finding on

point No.4 afresh and for this purpose, it is necessary to

remand the case for consideration of trial Court to give a

finding on the merits of the case and accordingly the

following:

ORDER

(i) Appeal filed by the complainant under Section

378(4) of the Cr.P.C. is allowed.

(ii) The impugned Judgment and order dated

31.12.2022 passed in Criminal Case

No.1835/2022 by the Principal Senior Civil

Judge and CJM, Dharwad sofar as its finding

that the complainant has not complied with