Section-138 NI Act: No separate application for condonation of delay: Apex Court accepted condonation of delay in filing of case where reasons were mentioned in complaint itself [Read the Order]

May 14, 2019:

Supreme Court has allowed a complaint for cheque bounce to continue where the case was filed beyond limitation period but sufficient reasons for delay were indicated in the complaint itself.

A bench of Justice Chandrachud and Justice Gupta has passed the order in the case titled as Birendra Prasad Sah vs The State of Bihar on 08.05.2019.

The dispute arises over two cheques drawn on the State Bank of India in the amount of Rs 36,00,000 and Rs 13,00,000 which were returned unpaid under a memo issued by the UCO Bank, Begusarai on 20 November 2015. The appellant received the memo on 4 December 2015. Following this, a legal notice was issued on 31 December 2015 intimating the dishonour of the cheque. According to the appellant, between 14 February 2016 and 23 February 2016, he made queries with the postal department but no proof of service was provided. Accordingly, on 26 February 2016, a second legal notice was issued. This was replied to by the second respondent on 2 March 2016. Eventually, a complaint under Section 138 was instituted on 11 May 2016.

The Chief Judicial Magistrate, Begusarai by an order dated 14 July 2016, condoned the delay in filing the complaint. While taking cognizance, the CJM issued summons to the second respondent. The second respondent instituted revisional proceedings before the Sessions Judge which were rejected on 8 March 2017. In a further recourse to the High Court under Section 482 CrPC, the learned Single Judge held that the complaint under Section 138 was not filed within the statutory period of thirty days prescribed under Section 138 as a result of which the proceedings were quashed.

When the complainant challenged the quashing order, the Supreme Court observed "The appellant has in the complaint specifically narrated the circumstance that despite repeated requests to the postal department, no acknowledgment of the notice was furnished. It was in these circumstances that the appellant issued a second notice dated 26 February 2016"

It then observed "The proviso however stipulates that cognizance of the complaint may be taken by the court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period. Both in paragraphs 7 and 8 of the complaint, the appellant indicated adequate and sufficient reasons for not being able to institute the complaint within the stipulated period. These have been adverted to above. The CJM condoned the delay on the cause which was shown by the appellant for the period commencing from 6 April 2018. However, if paragraphs 7 and 8 of the complaint are read together, it is evident that the appellant had indicated sufficient cause for seeking condonation of the delay in the institution of the complaint".

Supreme Court then opined "we are of the view that sufficient cause was shown by the appellant for condoning the delay in instituting the complaint taking the basis of the complaint as the issuance of the first legal notice dated 31 December 2015".

Supreme Court then stated that the order of High Court quashing the case is not sustainable and therefore it set aside the same.

Read the Order here:

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