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NI Act – Limitation Period For Issuance of Legal Notice to Exclude Day on Which Intimation Received From Bank About Return of Cheque: Delhi HC

Team SoOLEGAL 2 Feb 2022 4:09pm

NI Act – Limitation Period For Issuance of Legal Notice to Exclude Day on Which Intimation Received From Bank About Return of Cheque: Delhi HC

NEW DELHI: The Delhi High Court has ruled that the day on which the complainant receives notification from the bank that the cheque in question has been returned unpaid must be excluded when computing the limitation period of 30 days prescribed under section 138(b) of the Negotiable Instruments Act for the issuance of a valid legal notice.

Justice Manoj Kumar Ohri was hearing a slew of petitions filed under Section 482 of the Cr.P.C. seeking the dismissal of criminal complaints filed against them.

Petitioner No.2 was the Managing Director of the accused Company, while petitioner No.1 was the accused Company. The petitions arose from various complaints filed under Sections 138, 141, and 142 of the Negotiable Instruments Act of 1881.

The petitioners contended that the impugned criminal complaints were not maintainable qua the petitioners because the relevant legal demand notices were issued after the statutory period of 30 days set out in the N.I. Act had expired.

It was argued that because the aforementioned notices were invalid, the necessary ingredients of section 138(b) of the N.I. Act were not met, and thus the aforementioned criminal complaints should be dismissed.

The Court therefore decided whether or not the complainant Company's legal demand notices were sent within the thirty-day limitation period prescribed by Section 138(b) N.I. Act.

The Court stated that because the N.I. Act is a penal statute, it requires strict interpretation. As a result, before attributing criminal liability to an accused under the Act, the necessary ingredients of the alleged offence must be satisfied.

After reviewing a plethora of relevant judgments on the subject, the Court made the following observations:
“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) NI 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.”

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

The complainant, on the other hand, claimed that the legal demand notices were issued within the statutory period by relying on the dates of receipt of return statements from its bank, i.e., the dates on which intimation of dishonor of the cheque in question was received.

“…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 cheque 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.

As a result, the pleas were dismissed.



Tagged: Delhi HC   Legal Notice   Justice Manoj Kumar Ohri   Negotiable Instruments Act  
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