M/s. Rajaguru Traders vs C. Vijayakumar

Dr. S. Vimala, J. - The issue raised in this case is, whether a criminal complaint filed under Section 138 of N.I. Act is maintainable, when the cheque was presented for payment beyond the period of six months, as prescribed under the proviso (a) to Section 138 of N.I. Act.

This petition has been filed by the petitioner/accused, seeking to quash the case in C.C. No.249 of 2009 pending on the file of the learned Judicial Magistrate No.2, Karur, on the ground that the complaint is barred by limitation.

The case of the respondent/complainant is that the accused borrowed a sum of Rs.1,15,000/- on 12.07.2006 as hand loan and issued two cheques dated 27.11.2006 and 04.12.2006 each for a sum of Rs.50,000/- and Rs.65,000/- respectively. The complainant presented the above cheques for collection through his bank, namely, South Indian Bank Limited, Karur on 18.05.2007 and the same was returned with an endorsement ?Insufficient Funds?. Once again, the cheques were re-presented on 24.05.2007 and again, it was returned with the same endorsement. Subsequently, the cheques met with the similar result, when it was again presented on 14.07.2007. The last presentation of the cheque on 14.07.2007 is obviously the cheque presented after six months for collection of money. Still, after issuing a legal notice, a complaint has been filed under Section 138 of Negotiable Instruments Act.

It is contended by the petitioner / accused that the complaint filed is not at all maintainable on account of the fact that the complainant has presented the cheques after expiry of the validity of the cheques, i.e., after the expiry of six months. Therefore, on this sole ground, the complaint in C.C. No.249 of 2009 is sought to be quashed.

Admittedly, there is no dispute over the date of issuance of cheques and its date of presentation and especially the last presentation on 14.07.2007. Therefore, when the cheques have been presented for collection on 14.07.2007, which is clearly after expiry of six months, the complaint itself is not maintainable.

This dictum is supported by the decision of the Delhi High Court in the case of Shroff Publisher v. Springer India Pvt. Ltd., reported in 2008 Cri L.J. 1217, where-under relying upon the judgment of the Supreme Court, it was held that when a cheque was presented for payment beyond the period of six months as prescribed under provision (a) to Section 138 of N.I. Act, the complaint is not maintainable.

6.1. The relevant observation in Paragraph No.21 reads as under:

"21. The observations of the. Supreme Court in the decision reported as Sh. Ishar Alloy Steel Ltd. v. Jayaswals NECO Ltd. AIR 2001 SC 1161 : 2001 Cri LJ 1250 on this issue are conclusive. In the said case, appellant had issued a cheque dated 21-7-1997 in favor of the respondent. The respondent presented the cheque for payment on 26-9-1997 which was returned unpaid. Again on 20-1-1998, the respondent presented the cheque to its bank i.e. State Bank of India at Raipur. The cheque reached the drawer bank on 20-1-1998 admittedly after 6 months from the date it became payable. The cheque was returned unpaid by the bank of the respondent on 3-2-1998. A notice as required under proviso (b) of Section 138 of NI Act was issued on 10-2-1998 which was received by the appellant on 16-2-1998. A criminal complaint under Section 138 of NI Act was filed against the appellant. Holding that as the cheque was presented for payment beyond the period of 6 months as prescribed under proviso (a) to Section 138 of the NI Act, Supreme Court has held the complaint to be non-maintainable."

Learned counsel for the respondent/complainant would submit that even though the last presentation was after six months, initial two presentations were well within the time. This contention cannot be accepted, as it is only the last presentation based on which legal notice has been issued. Clause (b) to the proviso of Section 138 of the N.I. Act requires that notice of demand for payment of amount of dishonoured cheque must be sent within a period of 30 days from the receipt of information by the bank about the dishonour of cheque, which provides the cause of action.

In the result, this Criminal Original Petition is allowed and the proceedings in C.C. No.249 of 2009 on the file of the Judicial Magistrate No.2, Karur stand quashed.

Learned counsel for the respondent submitted that if the complaint is dismissed, it should be an impediment for the complainant to seek the civil remedy. It is made clear that the order passed in this case on technical ground of limitation would not be an impediment in order to invoke the civil remedy, provided the civil remedy is available on merits. Consequently, connected miscellaneous petition is closed.