Quashing of complaint u/s 138 of NI Act for improper
cognisance
Without
condoning delay in preferring complaint , the cognisance taken is illegal
There
has been periodic discussion, about quashing of complaints u/s 138 of
Negotiable Instruments Act ( In short “NI Act”) in view of gradual evolution of
law. We know that, owing to myriads of reasons, the complaint u/s 138 of NI Act
could be quashed. However, recently, the Supreme Court has conclusively dealt
with a pertinent issue i.e in case
application for condonation of delay is filed for delayed presentation of
complaint u/s 138 of NI Act and without adjudicating the delay condonation
application, in case, cognisance is taken, whether that should hold good? What
will be effect of such cognizance, if taken? Whether on that premise itself,
the cognisance could be quashed , resultantly, if in such a situation, whether,
the complaint itself could be quashed.
The
Supreme Court in a matter reported as 2026 INSC 27 and captioned as S.
Nagesh vs Shobha S. Aradhya SLP (Crl.) No. 18127 of 2024 has dealt with the
issue comprehensively.
IN THE COURT OF
MAGISTRATE
(i)
The then learned Magistrate, after
perusing the complaint and the documents, noted the presence of the complainant
and took cognisance, vide order dated 09.10.2013. However, by order
dated 23.05.2014, the successor learned Magistrate, noted that, though there
was a delay of two days in the filing of the complaint, his
predecessor-in-office had already taken cognisance of the offence and granted
liberty to the accused, viz., the appellant, to contest the delay at the time
of the trial.
(ii) The case was directed to be registered
against the accused for the offence punishable under Section 138 of the NI Act
and summons were directed to be issued to him to appear on the next date of
hearing. It was reiterated that liberty was granted to the complainant to
contest the delay at the time of the trial.
(iii) It was noted in order dated
04.02.2016, by the learned Magistrate that an application had been filed for
condonation of the delay of two days in the presentation of the complaint and
opined that the same required to be considered, before, the case went to trial
on merits. It was observed that the objection to the application was considered
and thereafter order dated 30.10.2018 was passed, thereby, allowing it.
(iv)
It was noted that the complainant had
stated in the delay condonation application, that she was suffering from viral
fever and was, therefore, unable to present the complaint within time. The
medical certificate was produced by her, wherein, it was stated that she was suffering
from viral fever and was under treatment from 04.10.2013 to 07.10.2013.
(v) It was thus held that the delay of two
days in the presentation of the complaint was purely bona fide, hence, allowed
the application; condoned the delay in the filing of the complaint; and
directed issuance of a non-bailable warrant against the accused.
KARNATAKA
HIGH COURT
(i)
The appellant/accused approached the
High Court by way of Criminal Petition No. 9119 of 2018. This petition was
filed on 06.12.2018. Therein, the appellant/accused contended that there was a delay of sixteen
days in the filing of the complaint and not just two days. He pointed out that
the respondent had filed the complaint on 09.10.2013 and cognisance was taken
by the learned Magistrate on the very same day.
(ii) It was contended that this procedure was
totally opposed to the scheme of the NI Act. He further contended that the
condonation of the delay of two days by the learned Magistrate, vide order
dated 30.10.2018, was equally without jurisdiction and contrary to the
statutory provisions.
(iii) It was also contended that the learned
Magistrate did not have the jurisdiction to take cognisance, before the delay
was condoned and the steps taken to the contrary were in violation of the
prescribed procedure.
(iv)
On merits, liability was denied and
prayed for quashing of the complaint.
The
high court had perused the contents of the complaint where in, it was averred
as under:
The
accused/appellant had approached her husband and her, seeking financial
assistance to purchase a house and to meet legal necessities. A loan of ₹5,40,000/-
was therefore given between the dates 27.01.2010 and 26.07.2010. A cheque in
lieu thereof for repayment was thereafter, issued, dated 10.07.2013 drawn in
her name for the said sum, assuring that it would be honoured upon
presentation. However, the cheque was dishonoured on 17.07.2013 for
insufficiency of funds. She got issued legal notice dated 13.08.2013 calling
upon the appellant to pay the cheque amount within 15 days but the same was
returned as ‘unclaimed’ on 22.08.2013. However, the copy of the notice sent
through courier was not returned unserved and the same amounted to deemed
service. However, no payment was made by the appellant. She, thereupon, filed
the complaint praying that the Court take cognisance of the offence punishable
under Section 138 of the Negotiable Instruments Act, 1881, and punish the
appellant in accordance with law, apart from awarding her compensation.
A
bare perusal of the impugned order dated 28.06.2024 passed by the High Court
reflects that the solitary issue focused upon by the appellant/accused before the
high court was that the learned Magistrate could not have taken cognisance
without first condoning the delay in the filing of the complaint.
The
High Court concurred with the view taken by the learned Magistrate that the
delay in the filing of the complaint was actually two days and not more and
that it was bona fide, justifying its condonation. It was also observed the
proviso to Section 142(1)(b) of the NI Act empowered the Court concerned
to take cognisance of a complaint made even after the prescribed period of one
month from the date on which the cause of action arose under clause (c) of the proviso
to Section 138 of the NI Act, if the complainant satisfied the Court that
he had sufficient cause for not making the complaint within that period. The learned
Judge, therefore, observed that the legislature had conferred express power on
the Court to take cognisance even in respect of a belated complaint, if
sufficient cause for such belated presentation was established by the
complainant.
It
was held by the high court that, whether the Court condoned the delay after taking
cognisance or whether it first condoned the delay and then took cognisance did
not, in any way, vitiate the taking of cognisance and held that what was of
consequence in the context that, whether the Court had condoned the delay in the
presentation of the complaint. It was further held that, if cognisance is taken,
without condoning the delay in the presentation of the complaint, it would only
be a curable irregularity. According to the high court, it is only when the
Court failed to condone the delay altogether, during the pendency of the
proceedings, and went on to adjudicate the matter on merits, that, the
proceedings would stand vitiated.
It
was also observed that on facts also the ld Magistrate had
taken cognisance on 09.10.2013 without noticing that the complaint had been
filed with delay, perhaps being misled by the erroneous averment in the
complaint that it was filed within time. However, upon noticing the delay of
two days in the presentation of the complaint, the learned Magistrate had
observed that his predecessor-in-office had taken cognisance without noticing
the delay and kept the said issue alive. The learned Judge held that, as the
complaint was of the year 2013 and the matter had been pending for more than 11
years, there was no justification in considering the delay of two days in the
filing of the complaint as of consequence. The high court had affirmed the
condonation of that delay by the learned Magistrate and upheld the cognisance
taken, though it was irregular, observing that the said irregularity stood
cured on the delay being condoned.
The
appellant’s petition was, accordingly, dismissed by the high court.
The
gravamen of the case is that ld single judge of Karnataka High Court was
pleased to pass order dated 28.06.2024
u/s 482 of Cr.PC, thereby, refusing to quash the complaint pending in the court
of ld Additional Civil Judge and Judicial Magistrate First Class at
Mysore. The High Court had rejected the petition, holding that the delay of two
days in the filing of the complaint was bona fide and cognizance had
rightly been taken.
Before
the Supreme Court
It
was contended by the appellant that cognizance could not have been taken
by the learned Magistrate of the belated complaint filed by the respondent
without first considering and condoning the delay in the presentation of the
complaint, provided sufficient cause was shown for such delay by her. The
reliance was placed on a 3-Judge Bench of this Court in Dashrath Rupsingh
Rathod vs. State of Maharashtra and another (2014) 9 SCC 129, to
contend that the High Court was in error in rejecting the quashing petition of
the appellant/accused.
The
learned counsel for the respondent in written submissions admitted that
the respondent’s complaint was filed on 09.10.2013 and cognisance was taken on
the very same day. Though , it was stressed upon that the order dated
23.05.2014 passed by the learned Magistrate remaining unchallenged. What is
evident, though, that, it was only on 30.10.2018 that the learned Magistrate
condoned the delay of two days, thereby, validating the cognisance taken by his
predecessor-in-office even before an application for condonation of delay was
filed. Therefore, the failure of the appellant to challenge the earlier orders
is of no consequence. More so, as the learned Magistrate had, in fact, reserved
the right of the appellant to raise the issue of delay during the trial but, the
learned Magistrate, thereafter, took upon himself the task of deciding the
limitation issue and condoned the delay by the later order dated 30.10.2018.
FINDINGS OF SUPREME
COURT
(1) In
Dashrath Rupsingh Rathod (supra), it was held that
cognisance under Section 142 of the NI Act of an offence under Section 138
thereof is forbidden except upon a complaint, in writing, made by the payee or
holder of the cheque in due course within one month from the date the cause of
action accrues to such payee or holder under clause (c) of the proviso to
Section 138. It was observed that the proviso to Section 138 simply
postpones institution of criminal proceedings and taking of cognisance by the
Court till such time, the cause of action in terms of clause (c) of the proviso
accrues to the complainant.
(ii) It
was noted by the Supreme Court that the proviso to Section
142(1)(b) of the NI Act was inserted by Act 55 of 2002, with effect from
06.02.2003. Section 142(1)(b), to the extent relevant, reads as under: -
142. Cognizance
of offences.—
(1) Notwithstanding anything contained
in the Code of Criminal Procedure, 1973 (2 of 1974) —
(a) ………;
(b) such complaint is made within
one month of the date on which the cause of action arises under clause (c) of
the proviso to Section 138:
Provided that the cognizance of a
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.
It was therefore
held in S.
Nagesh (Supra) as under:
“14. 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. For example, Order XLI Rules 3A and 5(3) of the Code of
Civil Procedure, 1908, make this position amply clear in the context of belated
presentation of civil appeals. Therefore, 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. We may note that the respondent was herself
responsible for this imbroglio as she had made a categorical statement in her
complaint that it was filed within time, when it was not”.
(iii) According to the Supreme Court, the
Magistrate had erred in taking cognisance of the respondent’s complaint
under Section 138 of the NI Act, even before condoning the delay of two days in
its presentation.
The order passed by the High Court refusing to
quash the same was thus, set aside.
Now therefore, there is no
ambiguity as regards the fact that if the complaint under section 138 of
Negotiable Instruments Act, when filed,
is delayed and even if application is filed for seeking condonation of delay in
preferring the complaint and if a Magistrate takes cognisance, before condoning
the delay, the cognisance shall be vitiated and the complaint shall have to be
quashed in view of provisions contained in section 142 of the NI Act as has
been quoted by the Supreme Court.
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Anil K Khaware
Founder &
Senior Associate
Socitylawandjustice.com
