S. 138 NI Act | Cognizance Can't Be Taken Of Time-Barred Cheque Dishonour Complaint Without First Condoning Delay : Supreme Court

Cognizance can't be taken on a cheque dishonor complaint filed belatedly unless the delay is condoned by the Court, observed the Supreme Court.

A bench of Justices Sanjay Kumar and Alok Aradhe set aside the Karnataka High Court's decision, which upheld the trial court's decision to take cognizance of a cheque dishonor complaint filed belatedly, even without condoning the delay.

“we have no hesitation in holding that the learned Magistrate erred in taking cognisance of the respondent's complaint under Section 138 of the NI Act, even before the delay of two days in its presentation was condoned.”, the court held.

The dispute stemmed from an alleged loan of ₹5.40 lakh, pursuant to which a cheque dated July 10, 2013 was dishonoured on July 17, 2013. After issuance of the statutory notice, the cause of action under Section 138 of the NI Act arose in late August 2013.

The complaint was filed on October 9, 2013, beyond the one-month limitation under Section 142(1)(b). Despite this, the Magistrate took cognizance of the date of filing and condoned the delay of nearly five years later on medical grounds. The Karnataka High Court upheld the proceedings, treating the premature cognizance as a curable irregularity.

Setting aside the impugned order, the judgment authored by Justice Sanjay Kumar held that the Magistrate's action was without jurisdiction. Interpreting the proviso to Section 142(1)(b) of the NI Act, the Court observed that condonation of delay on showing “sufficient cause” is a condition precedent for taking cognizance of a time-barred complaint.

“It is manifest from the clear and unambiguous language of the above proviso that the power conferred upon the Court to take cognisance of a belated complaint is subject to the complainant first satisfying the Court that he had sufficient cause for not making the complaint within time. The satisfaction in that regard, resulting in condonation of the delay, must therefore precede the act of taking cognizance. Ordinarily, a proceeding instituted with limitation-linked delay before a Court of law does not actually figure as a regular matter on its file until that delay is condoned.”, the court observed.

Further, rejecting the High Court's view, which held that the defect in taking cognizance before condonation was a curable irregularity since the delay had eventually been condoned, the Court clarified that the error was not a mere procedural irregularity but a jurisdictional defect. Since the complaint was time-barred on the date cognizance was taken, the Magistrate lacked the authority to proceed. A subsequent order condoning delay could not validate an earlier action taken without jurisdiction, the court said.

“the approach of the High Court in treating this crucial aspect as a mere interchangeable exercise, i.e., either to first condone the delay or to first take cognisance, is not in keeping with the mandate of the aforestated proviso.”, the court observed.

Accordingly, the appeal was allowed, and the complaint was quashed due to lack of cognizance.

Headnote

Negotiable Instruments Act, 1881; Section 138 and 142(1)(b) - The Supreme Court set aside an order of the Karnataka High Court that had treated the sequence of condoning delay and taking cognizance as interchangeable or a "curable irregularity" – Noted that under the proviso to Section 142(1)(b) of the NI Act, the power to take cognizance of a complaint filed after the prescribed period is expressly subject to the complainant first satisfying the Court that there was sufficient cause for the delay – Held that an order taking cognizance before the delay is formally condoned is legally unsustainable and satisfaction of the Court regarding sufficient cause for delay must precede the act of taking cognizance of a belated complaint - Supreme Court made following Findings: i. Mandatory Sequence: The satisfaction of the Court regarding "sufficient cause" resulting in the condonation of delay must precede the act of taking cognizance; ii. Irregularity not Curable: Held that High Court's view that taking cognizance before condoning delay is a "curable irregularity" is not in keeping with the statutory mandate of the proviso to Section 142(1)(b); iii. Impact of Misrepresentation: noted that the respondent (complainant) contributed to the procedural error by erroneously stating in her complaint that it was filed within time – Appeal allowed. [Relied on Dashrath Rupsingh Rathod vs. State of Maharashtra and another (2014) 9 SCC 129; Paras 13 15]

Cause Title: S. Nagesh versus Shobha S. Aradhya

Citation : 2026 LiveLaw (SC) 13

Click here to download judgment

Appearance:

For Petitioner(s) : Mr. Ashwin V. Kotemath, Adv. Mr. Harisha S.R., AOR

For Respondent(s) :