NI Act- Limitation Period For Issuance Of Legal Notice To Exclude Day On Which Intimation Received From Bank About Return Of Cheque: Delhi HC

The Delhi High Court has observed that while computing the limitation period of 30 days prescribed under sec. 138(b) Negotiable Instruments Act for issuance of a valid legal notice, the day on which intimation is received by the complainant from the bank that the cheque in question has been returned unpaid has to be excluded.

Justice Manoj Kumar Ohri was dealing with a bunch of petitions filed under sec. 482 of Cr.P.C. seeking quashing of Criminal Complaints qua them. 

While petitioner No.1 was the accused Company, petitioner No.2 was its Managing Director. The petitions arose out of different complaints filed under sec. 138 read with sec. 141 and 142 of the Negotiable Instruments Act, 1881.

It was the case of the petitioners that the impugned criminal complaints were not maintainable qua the petitioners, as the relevant legal demand notices were issued after the expiry of statutory period of 30 days set out under the N.I. Act.

It was contended that the said notices being invalid, the necessary ingredients of sec. 138(b) N.I. Act were not satisfied and thus, the impugned criminal complaints ought to be quashed.

The issue therefore adjudicated by the Court was whether or not the legal demand notices issued by the complainant Company were sent within the limitation period of thirty days prescribed under Section 138(b) N.I. Act?

The Court said that the N.I. Act, being a penal statute, warrants strict construction and as a result, before attributing criminal liability on an accused under the Act, the necessary ingredients of the offence alleged to have been committed are required to be satisfied.

Going through plethora of relevant judgments on the issue, the Court observed thus:

"The legal position, as culled out from the judicial dicta referred to hereinabove, is that while computing the limitation period of 30 days prescribed under Section 138(b) N.I. Act for issuance of a valid legal notice, the day on which intimation is received by the complainant from the bank that the cheque in question has been returned unpaid has to be excluded."

Coming to the facts of the case, the Court noted that the petitioner relied on the dates of return memos, i.e., dates of return of cheques in question, to compute the period of 30 days prescribed in the statute and contended that the legal demands notices were not issued in time.

On the other hand, the complainant relied on the dates of receipt of return statements from its Bank, i.e., the dates on which intimation was received regarding dishonor of the cheques in question, to submit that the legal demand notices were issued within the statutory period.

"…this Court is of the prima facie opinion that the legal notices were posted by the complainant Company within 30 days of the receipt of information from its Bank regarding dishonor of the cheques in question and were not time-barred. The contentions raised on behalf of the petitioner do not weigh with this Court and are accordingly rejected," the Court said at the outset.

Accordingly the pleas were dismissed.

Title: M/S RAYAPATI POWER GENERATION PVT. LTD. AND ANR

Citation: 2022 LiveLaw (Del) 75

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