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REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1684  OF 2014 ARISING OUT OF

SPECIAL LEAVE PETITION (CRL) NO. 8924 OF 2013

PAWAN KUMAR RALLI … APPELLANT

VERSUS

MANINDER SINGH NARULA … RESPONDENT

JUDGMENT

N.V. RAMANA, J.

Leave granted.

2. This appeal  arises out  of  the judgment  and order  dated 15 th  

January,  2013  of  the  High  Court  of  Delhi  passed  in  Criminal  

Miscellaneous Case No. 2961 of 2012 filed by the respondent herein  

under  Section  482  of  the  Criminal  Procedure  Code.  By  the  said  

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judgment, the High Court quashed the criminal proceedings initiated  

by the appellant under Section 138 of the Negotiable Instruments Act,  

1881 (hereinafter referred to as ‘the Act’) against the respondent.

3. The brief history of the case, according to the appellant, is that  

he had given a loan of Rs.60 lakhs to the respondent in the month of  

November, 2011. In discharge of his obligation to the appellant, on  

25th April, 2012, the respondent issued (i) Cheque No. 889953, drawn  

on Allahabad Bank, for Rs.30 lakhs; (ii) Cheque No. 545420, drawn  

on ICICI Bank, for Rs.20 lakhs; and (iii) Cheque No. 545409, drawn  

on ICICI Bank, for Rs. 10 lakhs. When the appellant presented the  

said cheques in his Bank for realization, they were dishonoured by  

the respondent’s banker with remarks ‘Stop Payment’.

4. The  appellant,  after  receiving  the  communication  from  his  

banker about the dishonour of Cheques, issued a handwritten notice  

(Annexure P4) to the respondent on 27th April, 2012 calling upon him  

to make the payment.  Upon non-compliance by the respondent,  a  

formal legal notice dated 24th May, 2012 (Annexpure P5) was issued  

under Section 138/142 of the Act requiring the respondent to pay the  

cheques amount along with interest and costs. In his reply to the legal  

notice, the respondent totally disagreed with the allegation of taking  

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loan from the appellant. Subsequently, the appellant filed a Complaint  

Case against the respondent invoking Sections 138, 141 and 142 of  

the Act and Section 420, of the Indian Penal Code. The Metropolitan  

Magistrate  took  cognizance  and  summoned  the  respondent  who  

pleaded not guilty and claimed to be tried.

5. During  the  pendency  of  trial,  the  respondent  filed  Criminal  

Miscellaneous  Case  before  the  High  Court  under  Section  482,  

Cr.P.C. for quashing of criminal proceedings pending before the Trial  

Court. The High Court expressed the view that the complaint was not  

filed within a period of one month after the expiry of 15 days of receipt  

of  the  notice  dated  27th April,  2012  and  hence  it  was  barred  by  

limitation  under  Section  142(b)  of  the  Act  and  by  the  impugned  

judgment quashed the criminal proceedings against the respondent.  

Aggrieved by the order of the High Court, the appellant-complainant  

approached this Court by way of Special Leave Petition.

6. Before us, the case of the appellant is that the High Court was  

not  justified  in  exercising  extra  ordinary  jurisdiction  under  Section  

482, Cr.P.C.  The High Court incorrectly considered the handwritten  

note as legal notice and calculated the limitation period accordingly.  

Whereas, the handwritten note was only an intimation to the accused  

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and according to the provisions of law, the actual notice within 30  

days from the date of dishonour of the cheques, was issued on 24 th  

May, 2012 and accordingly criminal proceedings were initiated well  

within  the limitation period.  But,  the High Court  failed to  take into  

consideration this material fact and merely on the ground of 25 days  

delay  from  the  date  of  service  of  handwritten  note,  quashed  the  

criminal proceedings. The High Court ignored the fact that the Act  

clearly enables the Court to condone the delay, if  any, beyond 30  

days of limitation period under proviso to Section 142(b) of the Act.  

7. During  the  course  of  hearing,  we  felt  it  justifiable  to  have  

assistance  of  a  senior  counsel  and  we  accordingly  appointed  

Mr. Huzefa Ahmadi, learned senior counsel as Amicus Curiae.  

8. Learned Amicus submitted that the handwritten note dated 27th  

April,  2012  whereby  the  appellant  called  upon  the  respondent  to  

make payment,  would fall  within the four corners of  ‘notice’  under  

Section 138(b) of the Act and there was a delay of 25 days in filing  

the Complaint under the provisions of the Act.  He further submitted  

that the proviso to Section 142(b) of the Act confers power on the  

Court to condone the delay, if the complainant satisfies the Court on  

the part of delay. As it was believed by the Trial Court that since the  

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legal notice was issued on 24th May, 2012 the limitation period would  

come into force from that date only, there was no occasion for the  

appellant to plead for sufficient cause for condonation of delay as the  

question of delay did not arise before the Trial Court. While issuing  

process, the Trial Court was clearly of the view that the Complaint  

was  within  limitation  on  the  basis  of  averments  made  in  the  

Complaint. Therefore, the occasion did not arise for the appellant to  

raise  the  plea  of  ‘sufficient  cause’  for  the  delay.  Moreover,  the  

respondent had also not raised the question of limitation before the  

Trial  Court  and the issue of  limitation was raised for  the first  time  

before the High Court.  

9. Even otherwise, before quashing the criminal proceedings on  

the ground of limitation, the High Court could have decided whether  

sufficient cause was made out by the appellant under the proviso to  

Section 142(b) of the Act, and if satisfied, it could have condoned the  

delay. Alternatively, the High Court could have remanded the matter  

to  the  Trial  Court  to  determine  the  issue.  In  support  of  his  

submissions,  he  placed  reliance  on  a  judgment  of  this  Court  in  

Rakesh Kumar Jain Vs. State (Through CBI) (2000) 7 SCC 656, in  

which while considering the provisions of Section 473, Cr.P.C. and  

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deciding  the  question  whether  on  the  ground  of  limitation,  the  

accused is entitled to seek his discharge, this Court held:

“The mere fact that the complaint was filed 25 days after  the expiry  of  the period of  limitation did  not  entitle  the  accused to seek his discharge under Section 245, Cr.P.C  because the complainant has, under law, a right to seek  for  extension  of  time  under  Section  473  Cr.P.C.  The  complainant could satisfy the Magistrate on the facts and  circumstances of the case that the delay was explainable  which was occasioned on account of their bona fide belief  to  obtain  the  sanction  for  the  purpose  of  filing  the  complaint”.

10. Learned Amicus finally submitted that the legislative intent in  

inserting the proviso to Clause (b) of Section 142 of the Act was only  

to  protect  the Cheque holders from the defaulters who issued the  

Cheques  and  the  Court  should  act  reasonably  in  providing  an  

opportunity to the Cheque holder to present his version on the issue  

of delay if any. After taking into consideration the reasons advanced  

by  the  Cheque holder,  the  Court  should  consider  the  question  of  

delay and then only it should pass an order. But in the present case,  

the  High  Court  adopted  an  unhealthy  approach  by  passing  the  

impugned order quashing the criminal proceedings on the ground of  

limitation, that too for a delay of only 25 days, without considering the  

appellant’s  reasons  for  the  delay.  He  further  submitted  that  the  

observation of the High Court in the impugned order that “allowing the  

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appellant to pursue the Complaint against the respondent would be  

an abuse of process” is also not in the interest of justice.

11. Learned  counsel  for  the  respondent,  on  the  other  hand,  

contended that there is no apparent error in the judgment of the High  

Court  in  quashing  the  criminal  proceedings  on  the  ground  of  

limitation. The High Court has correctly treated the handwritten notice  

sent by the appellant on 27th April, 2012 as a valid notice in terms of  

Section 138 of the Act as the appellant had given the notice in writing  

within fifteen days of information of dishonour of the Cheuqes from  

his banker. In support of this contention learned counsel has cited the  

judgment of this Court in Central Bank of India & Anr. Vs. Saxons  

Farms & Ors. (1999) 8 SCC 221 wherein this Court held that though  

no form of notice is prescribed in Clause (b) of Section 138 of the Act,  

the requirement is that notice shall be given in writing within fifteen  

days of receipt of information from the bank regarding return of the  

Cheque as unpaid and in the notice a demand for payment of the  

amount of the Cheque has to be made. So, learned counsel argued  

that looking at this settled legal position, the first notice issued by the  

appellant on 27th April, 2012 had since fulfilled the criteria laid down  

by  this  Court,  the  same  has  to  be  treated  as  ‘notice’  within  the  

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meaning of Section 138(b) of the Act. Therefore, he submitted that  

the  High  Court  was  right  in  considering  the  handwritten  note  as  

‘notice’ for the purpose of calculating delay in filing the Complaint and  

it rightly declared that the Complaint was barred by limitation.

12. Learned  counsel  for  the  respondent  further  contended  that  

even  though  the  proviso  to  Section  142(b)  of  the  Act  facilitates  

condonation of delay if  the complainant satisfies the Court that he  

had cogent reasons for not making the complaint within the limitation  

period,  in the present case the complainant had made no request  

before  the  High  Court  for  availing  such  benefit  of  condonation  of  

delay. To substantiate his argument, learned counsel relied upon the  

counter  affidavit  filed  by  the  appellant  before  the  High  Court  and  

submitted  that  there  also  the  appellant,  instead  of  pleading  for  

condonation of delay, took the stand that the communication dated  

27th April, 2012 shall not be treated as notice, whereas it fulfilled all   

ingredients of a ‘notice’ under Section 138 of the Act. In support of his  

claim  that  the  matter  is  barred  by  limitation  and  requires  to  be  

dismissed at the threshold itself, he relied on this Court’s Judgment in  

Ramesh Chand Sharma Vs. Udham Singh Kamal & Ors. (1999) 8  

SCC 304 and submitted that in that case also despite the objection of  

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limitation raised by the appellants, the first respondent did not file any  

application for condonation of delay and this Court had dismissed the  

O.A. filed by the first respondent, on the ground of limitation.

13. Learned counsel for  the respondent therefore firmly opposed  

the plea of the learned Amicus that the matter has to be remanded  

back to the Trial Court for hearing the issue of limitation by providing  

an opportunity to the appellant to avail the remedy envisaged under  

the proviso to Section 142(b) of the Act. He finally submitted that the  

High Court was right in quashing the criminal proceedings and the  

impugned order  does  not  call  for  interference  of  this  Court  under  

Article 136 of the Constitution.

14. We  have  heard  learned  counsel  at  length.  In  view  of  the  

conflicting approach adopted by the High Court  in determining the  

issue of limitation which subsequently led to the quashing of criminal  

proceedings  pending  before  the  Trial  Court,  the  following  issues  

emerge for our consideration for the disposal of this matter:

(a) Whether the handwritten note sent by the appellant  on  27th April,  2012  to  the  respondent  could  be  treated  as  ‘notice’  or  the  notice  issued  by  the  advocate on 24th May, 2012 could only be treated  as ‘notice’ within the meaning of Section 138 of the  Act?

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(b) If there was any delay in filing the Complaint in the  present case, whether such delay could have been  condoned by the High Court in accordance with the  provisions of the Act?

(c) Whether the High Court was right in quashing the  criminal proceedings on the ground of limitation or  instead  of  quashing  the  criminal  proceedings  it  ought to have remitted the matter back to the Trial  Court for deciding the issue of limitation?

15. Before embarking on the above issues, we may notice that the  

proviso appended to Section 138 of the Act limits the applicability of  

the main provision stating:

138.  Dishonour  of  cheque  for  insufficiency,  etc.  of  funds in the account.—

… … …

Provided that nothing contained in this section shall apply  unless—

(a) the cheque has been presented to the bank within a  period of  six months from the date on which it  is  drawn or within the period of its validity, whichever  is earlier;

(b) the  payee  or  the  holder  in  due course  of  the  cheque, as the case may be, makes a demand  for the payment of the said amount of money by  giving a notice in writing, to the drawer of the  Cheque,  within  thirty  days  of  the  receipt  of  information by him from the bank regarding the  return of the Cheque as unpaid; and

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(c) the  drawer  of  such  Cheque  fails  to  make  the  payment of the said amount of money to the payee  or, as the case may be, to the holder in due course  of the Cheque, within fifteen days of the receipt of  the said notice.”

16. Section 142 of the Act also puts a limitation on the power of the  

Court to take cognizance of the offences, which reads as under:

142. Cognizance of offences—Notwithstanding anything  contained in the Code of Criminal Procedure, 1973 (2 of  1974),—

(a)   no  court  shall  take  cognizance  of  any  offence  punishable  under  Section  138  except  upon  a  complaint, in writing, made by the payee or, as the  case  may  be,  the  holder  in  due  course  of  the  cheque;

(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.

(c) no Court inferior to that of a Metropolitan Magistrate  or a Judicial Magistrate of the First Class shall try  any offence punishable under Section 138.

17. Admittedly, in the case on hand, the Cheques in question were  

issued by the respondent and the same were dishonoured by the  

Bank on his instructions of ‘stop payment’. Two communications, one  

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a handwritten note dated 27th April,  2012 by the appellant  himself  

and the other a formal legal notice dated 24th May, 2012 issued by  

the advocate, were served on the respondent calling upon him to pay  

the  Cheque  amounts.  The  respondent  did  not  respond  to  the  

handwritten communication, but has replied to the legal notice issued  

through advocate on 24th May,  2012 denying the allegation.  Upon  

failure of the respondent to obey the handwritten communication as  

well as the legal notice, the appellant initiated criminal proceedings by  

filing  Complaint  Case  on  5th July,  2012.   It  appears  that  the  

respondent contested the matter before the Trial Court and also filed  

an application under Section 91, Cr.P.C. warranting the appellant to  

produce various documents. He has also moved an application under  

Section 410, Cr.P.C. seeking transfer of the Complaint to a different  

Court.  It  is  noteworthy  that  all  through  out  the  pendency  of  

proceedings before the Trial Court, the respondent did not raise the  

issue of ‘limitation’. The issue was raised for the first time before the  

High  Court  in  Section  482,  Cr.P.C.  proceedings.  The  High  Court,  

considering the handwritten note sent by the appellant on 27 th April,  

2012 as ‘notice’ under Section 138 of the Act, came to the conclusion  

that the complaint is barred by limitation.

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18. This Court  has already clarified in  Central  Bank of India &  

Anr. (supra)  that  Section  138  of  the  Act  does  not  prescribe  any  

specific  form  of  notice,  but  mandates  that  it  should  be  issued  in  

writing within thirty  days (w.e.f.  6-2-2003)  of  receipt  of  information  

from the banker about the dishonour of Cheque, with a demand to the  

drawer for making payment of the said amount.

19. We have perused the handwritten note dated 27th April, 2012  

(Annexure P4)  and found that  it  was issued within the mandatory  

period of thirty days of dishonour of cheques and contained (a) the  

subject amount of Rs.60,00,000/- given by the appellant as loan to  

the respondent  under  promissory notes;  (b)  the details  of  Cheque  

numbers and dates of issue with amounts and particulars of Bank; (c)  

Returning  of  Cheques  by  the  banker  dishonouring  them  on  the  

ground  of  ‘Stop  Payment’  by  the  respondent;  (d)  a  demand  for  

immediate  repayment  of  the  amount;  and  (d)  a  caution  to  the  

respondent  that  in  case  of  failure  on  the  part  of  respondent,  the  

appellant would initiate legal proceedings. Thus, in our opinion, the  

handwritten  note  dated  27th April,  2012  fulfilled  the  mandatory  

requirements under clause (b) of proviso to Section 138 and could be  

said  to  be a  valid  ‘notice’  in  the light  of  this  Court’s  Judgment  in  

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Central  Bank  of  India  &  Anr. (supra).  Moreover,  this  document  

(Annexure  P4)  stands  admitted  by  the  appellant  in  his  cross  

examination  also.  Therefore,  in  our  opinion,  the  High  Court  has  

committed no error  in  considering the handwritten note  dated 27 th  

April, 2012 as ‘notice’ under Section 138 of the Act.

20. However, when the issue of limitation has come up for the first  

time before the High Court, it ought to have dealt with the same on  

merits as per proviso to Section 142(b) of the Act. The said proviso  

appended to clause (b) of Section 142 of the Act was inserted by the  

Negotiable Instruments (Amendment and Miscellaneous Provisions)  

Act,  2002  and  the  legislative  intent  was,  no  doubt,  in  order  to  

overcome  the  technicality  of  limitation  period.   The  Statement  of  

Objects  and  Reasons  appended  to  the  Amendment  Bill,  2002  

suggests that the introduction of this proviso was to provide discretion  

to the Court to take cognizance of offence even after expiry of the  

period of limitation [See MSR Leathers Vs. S. Palaniappan (2013) 1  

SCC 177].  Only with a view to obviate the difficulties on the part of   

the  Complainant,  Parliament  inserted  the  proviso  to  clause  (b)  of  

Section 142 of the Act in the year 2002. It confers a jurisdiction upon  

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the  Court  to  condone  the  delay  [See  Subodh  S.  Salaskar Vs.  

Jayprakash M. Shah (2008) 13 SCC 689].

21.    It is no doubt true that at the time of filing the complaint, the  

Magistrate has to take cognizance of the complaint when it is within  

limitation and in case of delay in filing the complaint, the complaint  

has to come up with the application seeking condonation of delay.  

But, the peculiar fact of the present case is that in the complaint, the  

complainant had only averred that he has sent the legal notice dated  

24th May, 2012 but not mentioned about the handwritten note dated  

27th April, 2012. Basing on the said averment, the learned Trial Judge  

was satisfied that  the complaint  is  within  the prescribed period of  

limitation. Hence, in this case, raising the plea of limitation and Court  

exercising the discretion to condone the delay did not arise at all.

22.  In  the  peculiar  facts  and  circumstances  of  the  case,  while  

keeping in  mind the  legislative  intent  and  the specific  plea  of  the  

appellant raised in the grounds for the Special Leave Petition that he  

should have been allowed to move an application for condonation of  

delay before the Trial Court as the respondent has not suffered any  

prejudice  by  reason  of  25  days  delay,  we  strongly  feel  that  the  

appellant should not have been deprived of the remedy provided by  

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the  Legislature.  In  fact,  the  remedy so  provided  was to  enable  a  

genuine litigant to pursue his case against a defaulter by overcoming  

the  technical  difficulty  of  limitation.  Hence,  the  High  Court  has  

committed  an  error  by  not  considering  the  issue  of  limitation  on  

merits.  

23. In view of the settled principles of law in Rakesh Kumar Jain,   

MSR Leathers.   Subodh S.  Salaskar (supra) and in  the peculiar  

facts  and  circumstances  of  the  case,  we  are  of  the  considered  

opinion that the High Court was not right in quashing the complaint  

merely on the ground that complaint is barred by limitation, that too a  

plea which was taken for the first time before the High Court. On the  

other hand, the High Court ought to have remanded the matter to the  

Trial Court for deciding the issue of limitation.

24. At the same time, we want to make it very clear that by this  

observation we are not laying down a legal proposition that without  

even filing an application seeking condonation of delay at an initial  

stage,  complainant  can  be  given  opportunity  at  any  stage  of  the  

proceeding.  As already discussed by us in the foregoing paragraphs,  

we have come to the irresistible conclusion, to afford an opportunity  

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for the complainant to move an application seeking condonation of  

delay, under the peculiar facts and circumstances of the case.

25. For  all  the  aforesaid  reasons,  in  order  to  meet  the  ends  of  

justice,  we  exercise  our  discretion  under  Article  142  of  the  

Constitution and set aside the impugned judgment of the High Court  

quashing  the  criminal  proceedings  and  restore  the  criminal  

proceedings before the Trial Court. The appellant is permitted to file  

an application for condonation of delay before the Trial Court and if  

such  an  application  is  filed,  the  Trial  Court  shall  be  at  liberty  to  

consider the same on its own merits, without being impressed upon  

by  any  of  the  observations  by  this  Court,  and  pass  appropriate  

orders.

26. We are thankful to Mr. Huzefa Ahmadi, learned amicus curiae,  

for his able assistance.

27. The appeal stands allowed with the aforesaid observations.

….……………………………….J. (RANJANA PRAKASH DESAI)

.....………………………………J.         (N.V. RAMANA)  

NEW DELHI AUGUST  11,  2014

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