Section 138 NI Act: Delay In Filing The Complaint Can Be Condoned If Sufficient Cause Is Shown In The Complaint

The Supreme Court has observed that cognizance of a complaint filed under Section 138 of the Negotiable Instrument Act can be taken by the court even after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.

The bench comprising Justice DY Chandrachud and Justice Hemant Gupta was concerned with an appeal against Patna High Court judgment which quashed a summons issued by Chief Judicial Magistrate in a cheque bounce complaint.

In Birendra Prasad Sah vs. State of Bihar, after dishonour of cheques, the complainant issued a legal notice on 31.12.2015. As the accused failed to reply, the reminder notice was issued on 26.02.2016 by the complainant. The accused replied to the second notice denying his liability. The complaint was filed on 11.05.2016. The delay in filing complaint was condoned by the CJM taking into consideration the request made by the complainant that during the intervening period he had fallen ill.

The High Court had quashed the summons mainly on the ground that it was not permissible for a payee to create another cause of action in respect of the same cheque. It also observed that the complainant failed to file the complaint within the statutory period of thirty days as prescribed under the N.I. Act in pursuance to the issuance of first notice.

In appeal, though it was argued before the Apex Court bench, that in MSR Leathers v. S Palaniappan, a three judge Bench of this Court has taken the view that the issuance of successive notices is permissible under the provisions of Section 138, the bench did not consider this issue.

Instead, the bench observed that that sufficient cause was shown by the complainant 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. Setting aside the High Court order on this ground, the bench said:

"The complaint was instituted on 11 May 2016. Under Section 142(1), a complaint has to be instituted within one month of the date on which the cause of action has arisen under clause (c) of the proviso to Section 1386 . 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. The High Court has merely adverted to the presumption that the first notice would be deemed to have been served if it was dispatched in the ordinary course. Even if that presumption applies, 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."