शनिवार, 16 जनवरी 2010

109. NI Act - Limitation starts from first notice

Whether after the notice issued under clause (b) of Section 138 of the Negotiable Instruments Act,1881 is received by the drawer of the cheque, the payee or holder of the cheque, who does not take any action on the basis of such notice within the period prescribed under Section 138 of the Act, is entitled to send a fresh notice in respect of the same cheque and, thereafter, proceed to file a complaint under Section 138 of the Act?

Above question has been answered in negative by the Supreme Court in CRIMINAL APPEAL NO.46 OF 2010 (@ SPECIAL LEAVE PETITION (CRL) NO.6676 OF 2008), Tameeshwar Vaishnav Vs. Ramvishal Gupta (Decided on 8/1/10) wherein relying on two earlier decisions it has been held that under s 138 , NI Act, the cause of action arises only once. In this case first notice was issued on 22th march 2006 but complaint was not filed within 30 days and subsequently the cheque was again presented and dishonored and fresh notice was issued on 14th June 2006 and on that basis a complint was filed on 10th July 2006.
The Supreme Court accepted the argument that when the complainant did not take any action on the basis of the first notice a second notice in regard to the self-same cheque was barred under the proviso to Section 138 of the Act. In Sadanandan Bhadran vs. Madhavan Sunil Kumar [(1998) 6 SCC 514], it was held that the cause of action to file complaint on non-payment despite issue of notice, arises but once. Another cause of action would not arise on repeated dishonour on re-presentation. It was also held that while the payee was free to present the cheque repeatedly within its validity period, once notice had been issued and payments not received within 15 days of the receipt of the notice, the payee has to avail the very cause of action arising thereupon and file the complaint. Dishonour of the cheque on each re-presentation does not give rise to a fresh cause of action. This view was reiterated in Prem Chand Vijay Kumar vs. Yashpal Singh & Anr. [(2005) 4 SCC 417].


Following above decisions in Tameeshwar case (supra) the Supreme Court held that:

“The provisions of Section 138 and clauses (a), (b) and (c) to the proviso thereof indicate that a cheque has to be presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. Clause (b) indicates that the payee or the holder in due course of the cheque, has to make demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid and clause (c) provides that if the drawer of the cheque fails to make the payment of the said amount of money to the payee or to the holder in due course of the cheque within 15 days of receipt of the said notice, the payee or the holder of the cheque may file a complaint under Section 142 of the Act in the manner prescribed.”

The Supreme Court hald that : “In the instant case, it is clear that the fresh (sic) notices were received by the Appellant on 14th June, 2006, whereas the complaints were filed on 10th July, 2006. It must, therefore, be held that the complaints were filed beyond the period of limitation and the learned Magistrate erred in taking cognizance on the complaints filed on the basis of the second notices issued on 7th June, 2006. Similarly, the High Court was also wrong in affirming the order of the learned Magistrate.”
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सोमवार, 4 जनवरी 2010

List of legal articles by Dr. V.N. Tripathi

115. Compounding of offences u/s 138, NI Act

114. Restoration of criminal complaints on the line of civil suit

113. Disposal of seazed vehicles

112. Jurisdiction of BFIR vis a vis High Court

111. Cancellation of petrol pump dealership- prier notice of test is mandatory

110. Principle of negative equality

109. NI Act - Limitation starts from first notice

108. LIST / INDEX

107. Special Appeal in Allahabad High Court - when not maintainable

106. Penal provisions relating to road accidents
105. First Law maker of the world
104. The Court can not dismiss the suit when plaintiff fails to pay the costs
103. Shifted to other subject
102. --- do -----
101. --- do -----
100. --- do -----
99. Divorce in U.K. – Basic rules (2)
98. Divorce in United Kingdom - Basic rules (1)
97. Jurisdiction of Civil Court in labor matters - when not barred.
96. Insurer is not liable if DL expired
95. Writ of mandamus - some guide lines
94. Dissolution of unregistered firm
93. Right to water
92. Age in view of amendments in Juvenile Justice Act
91. s. 138,N.I.Act - when drower says cheque was lost
90. 'Post' and 'vacancy'
89. Sentencing - Provocation, a relevant consideration
88. Family law self help center
87. Precedents- some guidelines
86. Important points regarding s.138, NI Act
85. Remand of accused on change of investigating agency
84. Conditional legislation and delegated legislation
83. Blood test in paternity dispute
82. Fraud/cheating - simultanious civil and criminal case
81. 304 B, IPC - cruelty soon before death
80. MV Act- Compensation amount on death of children
79. Transplantation of human organs
78. Investigation by unauthorised officer
76. Supreme court's jurisdiction - general information
75. Final report and charge sheet
74. High Courts in India
73. Protest petition - a practice, not statutory rule
71. A concubine,whether can be prosicuted for u/s 498-A, IPC ?
70. Ad-hoc period - whether to be included in length of service
69. Applicability of limitation Act in Excise matters
68. Different standard of evidence at different stages of trial
67. Art. 161 c.f. Art. 72 in cases of death sentence
66. Transparency and accountability in a statute
65 Argument beyond pleadings
64 State Judicial Service - who is empowered to frame rules?
63 Welfare statutes
62 Will - Disinheritance of heirs of equal degree
61 Option between Ss. 163 – A and 166 of M.V. Act
60 Criminal prosecution of Company - Changing judicial views.
59 Evidence of defense at the stage of charge
58 Difference between inquiry officer and disciplinary authority
57 Interest under Land Acquisition Act
56 Territorial jurisdiction of High Court
56 Limitation Act – Art.58 v. Art. 113
54 Evidentiary value of certified copy of sale deed
53 quashing of FIR because of cross cases
52 Judicial interference in police investigation
51 Standard of proof at the stage of summoning order
50 Quashing of FIR when dispute is of civil nature
49 Inquest report - Object and scope
48. s. 156 (3) CrPC- Prospective accused has no standing
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107. Special Appeal in Allahabad High Court - when not maintainable

In SPECIAL APPEAL No.1942 of 2008 Sheet Gupta v. State Of U.P. & Others decided on 11/12/2009, the Full Bench of Allahabad High Court resolved the controversy regarding maintainability of Special Appeal (Letters Patent Appeal or Intra-Court Appeal ) against a judgment of single judge of the High Court. The question was referred to Full Bench as there were two contradictory decisions of coordinate two judge benches. The referred question was as under:


"Whether a special appeal under the provisions of Rule 5 of Chapter VIII of the Rules of the Court lies in a case where the judgment has been given by a learned single Judge in a writ petition directed against an order passed in an appeal under paragraph 28 of the U.P. Scheduled Commodities Distribution Order, 2004?"


Laying down general rules regarding maintainability of Special Appeal the Full Bench held that :

“from the perusal of Chapter VIII Rule 5 of the Rules of Allahabad High Court, a special appeal shall lie before this Court from the judgment passed by one Judge of the Court. However, such special appeal will not lie in the following circumstances:
1.The judgment passed by one Judge in the exercise of appellate jurisdiction, in respect of a decree or order made by a Court subject to the Superintendence of the Court;
2.the order made by one Judge in the exercise of revisional jurisdiction;
3.the order made by one Judge in the exercise of the power of Superintendence of the High Court;
4.the order made by one Judge in the exercise of criminal jurisdiction;
5.the order made by one Judge in the exercise of jurisdiction conferred by Article 226 or Article 227 of the Constitution of India in respect of any judgment, order or award by
(i) the tribunal,
(ii) Court or
(iii) statutory arbitrator
made or purported to be made in the exercise or purported exercise of jurisdiction under any Uttar Pradesh Act or under any Central Act, with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution of India;
6.the order made by one Judge in the exercise of jurisdiction conferred by Article 226 or 227 of the Constitution of India in respect of any judgment, order or award of
(i) the Government or
(ii) any officer or
(iii) authority,
made or purported to be made in the exercise or purported exercise of appellate or revisional jurisdiction under any such Act, i.e. under any Uttar Pradesh Act or under any Central Act, with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution of India."

Answering the referred question the Full Bench held that: “---- the Essential Commodities Act, 1955 is a Central Act referable to Entry 33 of the Concurrent List in the Seventh Schedule to the Constitution of India. ---In the present case, we find that the Commissioner had exercised powers conferred under Clause 28 of the Distribution Order, 2004, which order has been passed under the provisions of the Act, therefore, the appellate power has been exercised under the Act and, thus, no special appeal would lie. It may be mentioned here that right of an appeal is a statutory right and not a vested right and can be hedged by conditions as held by the Apex Court in the cases of Smt. Ganga Bai[1]and Vijay Prakash & Jawahar. [2]"




[1] Smt. Ganga Bai vs. Vijay Kumar and others, AIR 1974 SC 1126.

[2] Vijay Prakash D. Mehta and Jawahar D. Mehta vs. Collector of Customs (Preventive), Bombay, AIR 1988 SC 2010

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