Page 1

                                                                REPORTABLE

IN THE SUPREME COURT OF INDIA  

CRIMINAL APPELLATE JURISDICTION

CRIMINAL  APPEAL NO.605 OF 2012

Yogendra Pratap Singh … Appellant    

Versus

Savitri Pandey & Anr.           … Respondents

WITH

CRIMINAL  APPEAL NO. 1924 OF 2014

CRIMINAL  APPEAL NO. 1925 OF 2014

JUDGMENT   

R.M. LODHA, CJI.  

In the order of 03.04.2012, a two-Judge Bench of this Court  

granted leave in SLP (Crl.) No.5761 of 2010.  The Court formulated the  

following two questions for consideration:

(i)  Can cognizance of an offence punishable under Section  138 of the Negotiable Instruments Act 1881 be taken on the  basis of a complaint filed before the expiry of the period of  15 days stipulated in the notice required to be served upon  

1

Page 2

the drawer of the cheque in terms of Section 138 (c)   of   the  Act aforementioned? And,

(ii)  If  answer to question No.1 is in the negative, can the  complainant    be     permitted    to   present   the    complaint  again notwithstanding the fact that the period of one month  stipulated  under  Section  142  (b)  for  the  filing  of  such  a  complaint has expired?

2. The two-Judge Bench in that order noticed Section 138 and  

Section 142 of the Negotiable Instruments Act, 1881 (“NI Act”) and also  

referred  to  the  two  decisions  of  this  Court,  namely,  (1)  Narsingh  Das  

Tapadia1 and (2) Sarav Investment & Financial Consultancy2.  The Bench  

also noticed the judgments of High Courts of Calcutta, Orissa, Bombay,  

Punjab  and  Haryana,  Andhra  Pradesh,  Allahabad,  Gauhati,  Rajasthan,  

Delhi, Madhya Pradesh, Himachal Pradesh, Madras, Jammu and Kashmir  

and Karnataka and observed that judicial opinion on the first question was  

split among the High Courts in the country and so also the two decisions of  

this  Court  in  Narsingh Das Tapadia1 and  Sarav Investment  & Financial   

Consultancy2.  Even amongst  the two High Courts,  namely,  Jammu and  

Kashmir and Karnataka, the Bench noticed that the decisions on the first  

question were not uniform.  It was felt by the two-Judge Bench that the  

conflict  in  the  judicial  pronouncements  needed  to  be  resolved  

authoritatively  and,  accordingly,  referred  the  above  two  questions  for  

consideration by a three-Judge Bench of this Court.        

1 Narsingh Das Tapadia v. Goverdhan Das Partani and Anr.; [(2000) 7 SCC 183] 2 Sarav Investment & Financial Consultancy Private Limited and Anr. v. Llyods Register of Shipping  Indian Office Staff Provident Fund and Anr.; [(2007) 14 SCC 753]

2

Page 3

3. This is how the matter has been placed before us.

4. It is not necessary to narrate the facts in detail.  Suffice it to refer to  

factual matrix noted in the referral order which is as follows:    

The appellant  filed  a  complaint  under  Section  138  of  the  Negotiable  Instruments  Act  against  respondent  No.1  Smt.  Savitri  Pandey  in  the  Court  of  Additional  Civil  Judge  (J.D.)/Magistrate, Sonbhadra in the State of Uttar Pradesh.  The respondent's case was that four cheques issued by the  accused-respondent in his favour were dishonoured, when  presented  for  encashment.  A  notice  calling  upon  the  respondent-drawer of the cheque to pay the amount covered  by  the  cheques  was  issued  and  duly  served  upon  the  respondent  as  required  under  Section  138  (c)  of  The  Negotiable  Instruments  Act,  1881.  No  payment  was,  however, made by the accused till 7th October, 2008 when a  complaint under Section 138 of the Act aforementioned was  filed before the Magistrate. Significantly enough the notice in  question having been served on 23rd September, 2008, the  complaint presented on 7th October, 2008 was filed before  expiry of the stipulated period of 15 days. The Magistrate all  the same took cognizance of the offence on 14 th October,  2008  and  issued  summons  to  the  accused,  who  then  assailed the said order in a petition under Section 482 of the  Cr.P.C.  before the High Court  of  Judicature at  Allahabad.  The High Court took the view that since the complaint had  been filed within  15 days of  the service of  the notice the  same was clearly premature and the order passed by the  Magistrate taking cognizance of the offence on the basis of  such a complaint is legally bad. The High Court accordingly  quashed the complaint and the entire proceedings relating  thereto in terms of its order impugned in the present appeal.

5. Before  we  advert  to  the  two  decisions  of  this  Court  in  

Narsingh Das Tapadia1 and  Sarav Investment & Financial Consultancy2,  

and few decisions of the High Courts, we think it proper to refer to Sections  

138 and 142 of the NI Act.  Section 138 of the NI Act, as it stands today  

after amendment by Act 55 of 2002, defines the ingredients of the offence  

3

Page 4

and  the  punishment  that  would  follow in  the  event  of  such an  offence  

having been committed and the proviso appended thereto makes certain  

eventualities/conditions precedent for the commission of offence.  It reads  

as under:   

138. Dishonour of cheque for insufficiency, etc., of funds in  the account. -  Where any cheque drawn by a person on an  account maintained by him with a banker for payment of any  amount of money to another person from out of that account  for the discharge, in whole or in part, of any debt or other  liability, is returned by the bank unpaid, either because of the  amount of  money standing to the credit of that account is  insufficient  to  honor  the  cheque  or  that  it  exceeds  the  amount  arranged  to  be  paid  from  that  account  by  an  agreement  made  with  that  bank,  such  person  shall  be  deemed  to  have  committed  an  offence  and  shall  without  prejudice to  any other  provisions of  this Act,  be punished  with imprisonment for a term which may be extended to two  years, or with fine which may extend to twice the amount of  the cheque, or with both:  

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

(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.

Explanation: For the purposes of this section, "debt or other  liability" means a legally enforceable debt or other liability.

4

Page 5

6. Section  142  deals  with  cognizance  of  offences.   The  said  

provision, after amendment by Act 55 of 2002, is 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.

7. It may not be out of place to mention here that entire Chapter  

XVII  of  the NI Act was brought  in  the statute by Act 66 of  1988 w.e.f.  

01.04.1989.  This Chapter comprises of Sections 138 to 147.

8. The other two provisions which deserve mention are Sections  

2(d) and 190 of the Code of Criminal Procedure, 1973 (“Code”).  Section  

2(d) defines complaint in the context of the Code as follows:

2(d)"complaint"  means  any  allegation  made  orally  or  in  writing to a Magistrate, with a view to his taking action under  this Code, that some person, whether known or unknown,  has  committed  an  offence,  but  does  not  include  a  police  report.

9. Chapter XIV of the Code bears the title ‘Conditions Requisite  

for Initiation of Proceedings’.  This chapter has only one provision namely,  

5

Page 6

Section 190.  Section 190 makes provision for cognizance of offences by  

Magistrates.  It reads as under:  

190. Cognizance of offences by Magistrates. – (1)  Subject to the  provisions of this Chapter, any Magistrate of the first class, and any  Magistrate of the second class specially empowered in this behalf  under sub-section (2), may take cognizance of any offence—

(a) upon receiving a complaint of  facts  which constitute  such offence;

(b) upon a police report of such facts; (c) upon   information  received  from  any  person  other  

than  a  police  officer,  or  upon  his  own  knowledge, that such  offence  has  been  committed.

(2) The  Chief  Judicial  Magistrate  may  empower  any  Magistrate  of  the  second  class  to  take  cognizance  under  sub- section (1) of such offences as are within his competence to inquire  into or try.

10. Before the decision of this Court in Narsingh Das Tapadia1, six  

High Courts had occasion to consider the question whether the complaint  

under  Section 138 of  the NI  Act  was maintainable  when the stipulated  

period of 15 days of the receipt of the notice as provided in clause (c) of  

the proviso appended to Section 138 had not expired.  The first of such  

decisions, decided as early as on 29.07.1992 is of the Bombay High Court  

in  Rakesh Nemkumar Porwal3.  The Division Bench of the Bombay High  

Court  held that as the complaint  was presented within the period of 15  

days of the service of notice effected on the accused, the complaint was  

not maintainable for commission of offence under Section 138 of the NI Act  

as no offence can be said to have been committed on the date of lodgment  

3 Rakesh Nemkumar Porwal v. Narayan Dhondu Joglekar and Anr.; [1993 Cri.L.J. 680]

6

Page 7

of the complaint.  Reading Section 138(c) and Section 142 (b) together,  

the Division Bench of the Bombay High Court held that no offence can be  

said to have been committed until  and unless the period of 15 days as  

prescribed under clause 138(c) has in fact elapsed.  

11. The above view taken by the Division Bench of the Bombay  

High Court is echoed by the High Courts of Punjab and Haryana (Ashok  

Verma)4,  Andhra  Pradesh  (N.  Venkata  Sivaram  Prasad)5,  Karnataka  

(Ashok Hegde)6,  Orissa (Sri Niranjan Sahoo)7 and Jammu and Kashmir  

(M/s Harpreet Hosiery Rehari)8.

12. In the case of  Ashok Verma4, the argument of the petitioner  

accused before the Punjab and Haryana High Court was that Section 138  

of the NI Act envisaged a clear 15 days notice to the drawer of the cheque  

and the time was to be computed from the date of the receipt of the notice,  

but the impugned complaint had been filed before the expiry of 15 days  

and the complaint was liable to be quashed on this ground.  Dealing with  

the argument, the Punjab and Haryana High Court referred to the decision  

of  the Bombay High Court  in  Rakesh Nemkumar Porwal3 and on going  

through the provisions of Section 138 held as under:

4  Ashok Verma v. Ritesh Agro Pvt. Ltd. and Anr.; [(1995) 1 Bank  CLR 103] 5  N. Venkata Sivaram Prasad v. M/s Rajeswari Constructions; [1996 Cri. L.J. 3409]  6  Ashok Hegde v. Jathin v. Attawan; [1997 Cril. L.J. 3691]  7  Sri Niranjan Sahoo v. M/s Utkal Sanitary, BBSR; [1998 (3) Crimes 188]  8  M/s Harpreet Hosiery Rehari v. Nitu Mahajan; [2000 Cri.L.J. 3625]

7

Page 8

A perusal of the above section shows that while the section  defines  the  necessary  ingredients  of  the  offence  and  punishment that can be awarded for the commission of the  offence, the proviso to the section lays down the conditions  precedent for the commission of the offence. According to  this proviso the necessary ingredients of the offence are that  the cheque was presented to the bank within a period of six  months from the date on which it was drawn or the period of  its validity,  that the cheque is returned unpaid because of  insufficiency  of  funds  or  that  the  amount  of  the  cheque  exceeded the amount arranged to be paid from the bank and  the payee gave a notice to the drawer claiming the amount  within 15 days of the receipt of the information from the bank  regarding the return of the cheque and the drawer failed to  make payment within 15 days of the receipt of the notice.  Under  Sub-clause  (c)  of  the  proviso  a  15  days  time  is  granted to the drawer of the cheque to make payment and  unless this period elapsed and no payment was made, the  drawer was not liable for any offence under Section 138 of  the Act.     

13. The Division Bench of the Andhra Pradesh High Court in  N.  

Venkata Sivaram Prasad5 was confronted with the question as to whether  

the Magistrate  can take cognizance of  the complaint  given in the case  

under consideration and proceed with the trial of the complaint after the  

expiry of 15 days as prescribed under Section 138(c) of the NI Act.  The  

question that fell for consideration before the Andhra Pradesh High Court  

involved the aspect whether the offence under Section 138 can be said to  

be complete only if the drawer fails to pay the amount within 15 days of the  

receipt of the notice as contemplated in proviso (c) to Section 138.  The  

Division Bench took into consideration the provisions contained in Section  

138 and Section 142 of the NI Act and so also Section 2(d), Section 2(n)  

and Section 190 of the Code and held that until and unless the criteria laid  

8

Page 11

premature and should not have been entertained, the single Judge held,  

“…..  from  the  above,  it  is  clear  that  he  received  the  notice  back  on  

21.09.1989.   Even  accepting  that  the  petitioner  refused  the  notice  on  

20.09.1989,  the respondent  ought  to  have filed this  complaint  after  the  

expiry  of  15 days from the  date  of  receipt  of  the  notice.   The date  of  

issuance  of  notice  cannot  be  taken  into  account……..   Therefore,  the  

cause of action had not arisen to file the complaint against the petitioner  

and the complaint was premature…….”  

16. The Orissa High Court in  Sri Niranjan Sahoo7 also took the  

view that if the complaint case is filed before expiry of 15 days as provided  

in clause (c) to the proviso of Section 138, then cognizance of the offence  

cannot be taken in view of the provision in clause (b) of Section 142 and  

consequentially the complaint was liable to be quashed.

17. The view of Jammu and Kashmir High Court in M/s. Harpreet   

Hosiery Rehari8  is to the effect that under the law drawer has got 15 days  

to make the payment from the receipt of notice of dishonour of the cheque.  

It is only thereafter that an action under Section 138 of the NI Act can be  

initiated against the defaulting party.    

18. It  was after the above decisions of the various High Courts  

that the decision of this Court in Narsingh Das Tapadia1 came.  In Narsingh  

1

Page 12

Das Tapadia1, which was decided on 06.09.2000, the two-Judge Bench of  

this Court noted the facts as follows:

……  that  the  respondent  borrowed a  sum of  Rs.2,30,000  from the appellant and issued a post-dated cheque in his  favour.  When  the  cheque  was  presented  for  demand  on  3-10-1994, the same was dishonoured by the bank on 6-10- 1994 due to “insufficient funds”. The appellant demanded the  accused  to  repay  the  amount  vide  his  telegrams sent  on  7-10-1994 and 17-10-1994. A notice was also issued to the  respondent on 19-10-1994 demanding to repay the amount.  Despite receipt of the notice on 26-10-1994 the respondent  neither paid the amount nor gave any reply.  To prove his  case,  the appellant-complainant examined three witnesses  and proved documents, Exhibits P-1 to P-6. In his statement  under  Section  313  CrPC  the  respondent  denied  the  allegations but  refused to  lead any defence evidence.  On  analysis of the evidence and after hearing the counsel for  the parties, the trial court concluded as under:

“The  complainant  established  that  the  accused  borrowed  Rs.2,30,000  from  him  and  the  accused  issued Ext. P-3, cheque and the cheque was returned  due to insufficiency of funds and the accused did not  repay the amount in spite of receipt of notice from the  complainant  and  hence  the  accused  is  liable  for  punishment under Section 138 of the NI Act.”

As noticed earlier, the appeal filed by the respondent was  dismissed on 19-4-1997. The High Court found that as the  notice intimating the dishonourment of cheque was served  upon the accused on 26-10-1994, the appellant-complainant  could  not  file  the  complaint  unless the expiry  of  15  days’  period. It was found on facts that the complaint filed on 8-11- 1994 was returned after finding some defect in it. However,  when refiled, the Court took the cognizance on 17-11-1994.  The High Court held that the original complaint having been  filed  on  8-11-1994  was  premature  and  liable  to  be  dismissed.    

19. This  Court  in  Narsingh  Das  Tapadia1 considered  the  

provisions  contained  in  clause  (c)  of  the  proviso  to  Section  138  and  

1

Page 13

Section  142  of  the  NI  Act  and  also  considered  the  expression  “taking  

cognizance of an offence” and held that mere presentation of the complaint  

on 08.11.1994  when  it  was  returned  to  the complainant on the ground  

that the verification was not signed by the counsel, could not be termed to  

be an action of the Magistrate taking cognizance within the meaning of  

Section 142 of the NI Act.  The two-Judge Bench did not approve the view  

of  the  High  Court  and  held  that  the  High  Court  erroneously  held  the  

complaint as premature.  Consequently, the judgment of the High Court  

was set aside and the conviction of the respondent under Section 138 of  

the NI Act was upheld.      

20. After the decision of this Court in Narsingh Das Tapadia1, the  

Karnataka High Court in Arun Hegde9 did not accept the contention of the  

accused that the complaint filed under Section 138 on 15th day of service of  

notice of demand was premature and as such not maintainable.  Relying  

upon  Narsingh  Das  Tapadia1,  the  single  Judge  of  the  Karnataka  High  

Court in Arun Hegde9 held that if the complaint was found to be premature,  

it can await maturity or be returned to the complainant for filing later and its  

mere  presentation  at  an  earlier  date  need  not  necessarily  render  the  

complaint liable to be dismissed or confer any right upon the accused to  

absolve himself from the criminal liability for the offence committed.

9 Arun Hegde and Anr. v. M.J. Shetty; [ILR 2001 Kar. 3295]

1

Page 14

21. In Hem Lata Gupta10,  the Allahabad High Court while dealing  

with the complaint  filed before expiry of 15 days, after relying upon the  

decision of this Court in Narsingh Das Tapadia1 held that the bar of expiry  

of 15 days from the date of service of notice is for taking cognizance and  

not for filing complaint.

22. In Mahendra Agarwal11, the Rajasthan High Court adopted the  

reasoning that was made by this Court in Narsingh Das Tapadia1 and held  

that  mere  presentation  of  the complaint  in  the court  cannot  be held  to  

mean,  that  its  cognizance  had  been  taken  by  the  Magistrate.   If  the  

complaint is found to be premature, it can await maturity or be returned to  

the complainant for filing later and its mere presentation at an earlier date  

need not necessarily render the complaint liable to be dismissed or confer  

any right upon the accused to absolve himself from the criminal liability for  

the offence committed.

23. In  Bapulal  B.  Kacchi12,  the  Madhya  Pradesh  High  Court  

considered the matter  against  the order passed by the Sessions Judge  

setting aside the order passed by the Chief Judicial Magistrate, Shajapur  

whereby he refused to register the complaint under Section 138 of the NI  

Act against the accused as it was found to be premature since 15 days  

from the date of receipt of the notice by the accused had not elapsed.  The  10 Smt. Hem Lata Gupta v. State of U.P. and Anr.; [2002 Cri. L.J. 1522] 11 Mahendra Agarwal v. Gopi Ram Mahajan; [RLW 2003 (1) Raj. 673] 12 Bapulal B. Kacchi v. Krupachand Jain; [2004 Cri. L.J. 1140]

1

Page 17

26. The Allahabad  High  Court  in  Ganga Ram Singh15 took  the  

view that if the complaint was filed under Section 138 of the NI Act before  

expiry  of  15 days of  statutory  notice,  the concerned court  should  have  

waited and allowed the complainant  to establish its case or cognizance  

should have been taken after the expiry of the stipulated period instead of  

dismissing the complaint outright as premature.

27.    A single Judge of the Madras High Court, following Narsingh  

Das Tapadia1 held  that  though the complaint  was preferred three days  

short of the time to be availed by the accused to settle the dues but since  

the Magistrate had taken cognizance of the complaint  presented by the  

complainant after the 15 days time granted under the statutory notice to  

settle the amount due to complainant, the complaint cannot be quashed on  

the ground that it was filed prematurely.

28. In S. Janak Singh16, the Jammu and Kashmir High Court   took  

the view with  regard  to presentation of  complaint  before the accrual  of  

cause of action that though the complaint under Section 138 of the NI Act  

having been filed before the accrual of cause of action, the same could not  

be  legally  entertained  by  the  trial  court.   Relying  upon  Narsingh  Das  

Tapadia1, it was held that if the complaint was found to be premature, it  

can await maturity or be returned to the complainant for filing later and its  

15 Ganga Ram Singh v. State of U.P. and Ors.; [2005 Cri. L.J. 3681] 16 S. Janak Singh v. Pritpal Singh; [2007 (2) JKJ 91]  

1

Page 18

mere  presentation  at  an  earlier  date  need  not  necessarily  render  the  

complaint  liable  to  be  dismissed  or  confer  any  right  upon  accused  to  

absolve himself from the criminal liability for the offence committed.  The  

view of the single Judge of the Jammu and Kashmir High Court is founded  

on the decision of this Court in Narsingh Das Tapadia1.   

29. For about 7 years since the decision was given by this Court  

in  Narsingh Das Tapadia1,  the various High Courts, as indicated above,  

continued to take the view that presentation of a complaint under Section  

138 of the NI Act before the accrual of the cause of action does not render  

it not maintainable if cognizance had been taken by the Magistrate after  

expiry of 15 days of the period of notice.  In such matters, no illegality or  

impropriety  found  to  have  been  committed  by  the  Magistrate  in  taking  

cognizance upon such complaint.  This legal position, however, was not  

accepted by a two-Judge Bench decision of this Court in Sarav Investment   

& Financial Consultancy2.  Dealing with the provision under Section 138 of  

the NI Act, this Court held that Section 138 contained a penal provision; it  

was a special statute.  Having regard to the purport of the said provision as  

also in view of the fact that it provides for a severe penalty, the provision  

warrant a strict construction.  This Court emphasized that clause (c) of the  

proviso to Section 138 provides that  the holder of  the cheque must  be  

given an opportunity to pay the amount within 15 days of the receipt of the  

notice.   Complaint,  thus,  can be filed for  commission  of  an offence by  

1

Page 19

drawee of the cheque only 15 days after service of the notice.  In  Sarav  

Investment & Financial Consultancy2, this Court, thus, held that service of  

notice in terms of Section 138 proviso (b) of the NI Act was a part of cause  

of  action  for  lodging  the  complaint  and  communication  to  the  accused  

about the fact of dishonouring of the cheques and calling upon him to pay  

the amount within 15 days was imperative in character.  It is true that in  

Sarav Investment & Financial Consultancy2, there is no reference of the  

decision of this Court in Narsingh Das Tapadia1.     

30. Sarav Investment & Financial Consultancy2  led  to  the  view  

being taken by the High Courts that a complaint under Section 138 of the  

NI Act filed before expiry of 15 days of service of notice was premature  

and such complaint could not be treated as complaint in the eye of law and  

criminal proceedings initiated are liable to be quashed.  This is seen from  

the view of the Calcutta High Court in Sandip Guha17 and the judgment of  

the Himachal Pradesh High Court in Rattan Chand18.

31. Section  138 of  the NI  Act  comprises  of  the main provision  

which defines the ingredients of the offence and the punishment that would  

follow in the event of such an offence having been committed. Appended  

to this Section is also a proviso which has three clauses, viz., (a), (b) and  

(c). The offence under Section 138 is made effective only on fulfillment of  

17 Sandip Guha v. Saktipada Ghosh and Anr.; [2008 (3) CHN 214]  18 Rattan Chand v. Kanwar Ram Kripal and Anr.; [2010 Cri. L.J. 706]

1

Page 20

the eventualities contained in clauses (a), (b) and (c) of the proviso. For  

completion of  an offence under  Section 138 of  the NI  Act  not  only  the  

satisfaction of the ingredients of offence set out in the main part of the  

provision  is  necessary  but  it  is  also  imperative  that  all  the  three  

eventualities  mentioned  in  clauses  (a),  (b)  and  (c)  of  the  proviso  are  

satisfied.  Mere  issuance  of  a  cheque  and dishonour  thereof  would  not  

constitute an offence by itself under Section 138.

32. Section 138 of the NI Act has been analysed by this Court in  

Kusum Ingots  & Alloys Ltd.19 wherein  this  Court  said  that  the following  

ingredients  are  required  to  be  satisfied  for  making  out  a  case  under  

Section 138 of the NI Act:

(i)  a  person  must  have  drawn  a  cheque  on  an  account  maintained by him in a bank for payment of a certain amount  of money to another person from out of that account for the  discharge of any debt or other liability;

(ii)  that  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;

(iii)  that  cheque  is  returned  by  the  bank  unpaid,  either  because the amount of money standing to the credit of the  account  is  insufficient  to  honour  the  cheque  or  that  it  exceeds the amount arranged to be paid from that account  by an agreement made with the bank;

(iv)  the payee or  the holder  in due course of  the cheque  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 15 days of the receipt of information by him  from the bank regarding the return of the cheque as unpaid;

19 M/s. Kusum Ingots & Alloys Ltd. v. M/s. Pennar Peterson Securities Ltd. and ors. etc. etc.; [AIR 2000  SC 954 : (2000) 2 SCC 745]

2

Page 21

(v) the drawer of such cheque fails to make payment of the  said  amount  of  money to  the payee or  the  holder  in  due  course of the cheque within 15 days of the receipt of the said  notice.

33. We are in agreement with the above analysis.  

34. In K.R. Indira20, a two-Judge Bench of this Court observed that  

the offence under Section 138 of the NI Act could be completed if all the  

above components are satisfied.

35. Insofar  as  the  present  reference  is  concerned,  the  debate  

broadly centers around clause (c) of the proviso to Section 138 of the NI  

Act. The requirement of clause (c) of the proviso is that the drawer of the  

cheque must have failed to make the payment of the cheque amount to the  

payee within 15 days of the receipt of the notice. Clause (c) of the proviso  

offers a total period of 15 days to the drawer from the date of receipt of the  

notice to make payment of the cheque amount on its dishonour.  

36. Can an offence under Section 138 of the NI Act be said to  

have been committed when the period provided in clause (c) of the proviso  

has not expired? Section 2(d) of the Code defines ‘complaint’.  According  

to this definition, complaint means any allegation made orally or in writing  

to a Magistrate with a view to taking his action against a person who has  

committed an offence. Commission of an offence is a  sine qua non for  

filing  a  complaint  and  for  taking  cognizance  of  such  offence.   A  bare  20 K.R. Indira v. Dr. G. Adinarayana; [AIR 2003 SC 4789 : (2003) 8 SCC 300)]

2

Page 22

reading of the provision contained in clause (c) of  the proviso makes it  

clear that no complaint can be filed for an offence under Section 138 of the  

NI Act unless the period of 15 days has elapsed. Any complaint before the  

expiry of 15 days from the date on which the notice has been served on  

the drawer/accused is no complaint at all in the eye of law.  It is not the  

question of prematurity of the  complaint where it is filed before expiry of  

15 days from the date on which notice has been served on him, it is no  

complaint at all under law. As a matter of fact, Section 142 of the NI Act,  

inter alia, creates a legal bar on the Court from taking cognizance of an  

offence  under  Section  138  except  upon  a  written  complaint.  Since  a  

complaint filed under Section 138 of the NI Act before the expiry of 15 days  

from the date on which the notice has been served on the drawer/accused  

is no complaint in the eye of law, obviously, no cognizance of an offence  

can be taken on the basis of such  complaint.  Merely because at the time  

of taking cognizance by the Court, the period of 15 days has expired from  

the date on which notice has been served on the drawer/accused,  the  

Court is not clothed with the jurisdiction to take cognizance of an offence  

under Section 138 on a complaint filed before the expiry of 15 days from  

the date of receipt of notice by the drawer of the cheque.

37.  A complaint filed before expiry of 15 days from the date on  

which  notice  has  been  served  on  drawer/accused  cannot  be  said  to  

disclose the cause of action in terms of clause (c) of the proviso to Section  

2

Page 23

138 and upon such complaint which does not disclose the cause of action  

the  Court  is  not  competent  to  take  cognizance.   A  conjoint  reading  of  

Section 138, which defines as to when and under what circumstances an  

offence can be said to have been committed, with Section 142(b) of the NI  

Act,  that  reiterates  the position of  the point  of  time when the cause of  

action has arisen, leaves no manner of doubt that no offence can be said  

to  have  been  committed  unless  and  until  the  period  of  15  days,  as  

prescribed under  clause (c)  of  the proviso to Section 138,  has,  in fact,  

elapsed.  Therefore,  a Court  is  barred in law from taking cognizance of  

such complaint. It is not open to the Court to take cognizance of such a  

complaint  merely  because  on  the  date  of  consideration  or  taking  

cognizance thereof a period of 15 days from the date on which the notice  

has been served on the drawer/accused has elapsed. We have no doubt  

that all the five essential features of Section 138 of the NI Act, as noted in  

the judgment of this Court in  Kusum Ingots & Alloys Ltd.19  and which we  

have approved, must be satisfied for a complaint to be filed under Section  

138. If the period prescribed in clause (c) of the proviso to Section 138 has  

not expired, there is no commission of an offence nor accrual of cause of  

action for filing of complaint under Section 138 of the NI Act.  

38. We, therefore, do not approve the view taken by this Court in  

Narsingh Das Tapadia1  and so also the judgments of various High Courts  

following Narsingh Das Tapadia1 that if the complaint under Section 138 is  

2

Page 24

filed before expiry  of  15 days from the date on which notice has been  

served on the drawer/accused the same is premature and if on the date of  

taking cognizance a period of 15 days from the date of service of notice on  

the drawer/accused has expired, such complaint was legally maintainable  

and, hence, the same is overruled.

39. Rather,  the view taken by this Court in  Sarav Investment &  

Financial  Consultancy2 wherein  this  Court  held  that  service of  notice in  

terms of Section 138 proviso (b) of the NI Act was a part of the cause of  

action for lodging the complaint and communication to the accused about  

the fact of dishonouring of the cheque and calling upon to pay the amount  

within  15 days was imperative  in character,  commends itself  to  us.  As  

noticed by us earlier, no complaint can be maintained against the drawer  

of  the cheque before the expiry of  15 days from the date of  receipt  of  

notice because the drawer/accused cannot be said to have committed any  

offence  until  then.  We  approve  the  decision  of  this  Court  in  Sarav  

Investment & Financial Consultancy2  and also the judgments of the High  

Courts  which  have  taken  the  view  following  this  judgment  that  the  

complaint under Section 138 of the NI Act filed before the expiry of 15 days  

of service of notice could not be treated as a complaint in the eye of law  

and  criminal  proceedings  initiated  on  such  complaint  are  liable  to  be  

quashed.

2

Page 25

40. Our answer to question (i) is, therefore, in the negative.

41. The other question is that if the answer to question (i) is in the  

negative, can the complainant be permitted to present the complaint again  

notwithstanding  the  fact  that  the  period  of  one  month  stipulated  under  

Section 142(b) for the filing of such a complaint has expired.

42. Section 142 of the NI Act prescribes the mode and so also the  

time within which a complaint for an offence under Section 138 of the NI  

Act can be filed. A complaint made under Section 138 by the payee or the  

holder in due course of the cheque has to be in writing and needs to be  

made within one month from the date on which the cause of action has  

arisen under clause (c) of the proviso to Section 138. The period of one  

month under Section 142(b) begins from the date on which the cause of  

action has arisen under clause (c) of the proviso to Section 138. However,  

if the complainant satisfies the Court that he had sufficient cause for not  

making a complaint within the prescribed period of one month, a complaint  

may be taken by the Court  after  the prescribed period.  Now, since our  

answer to question (i) is in the negative, we observe that the payee or the  

holder in due course of the cheque may file a fresh complaint within one  

month from the date of decision in the criminal case and, in that event,  

delay in filing the complaint will be treated as having been condoned under  

the proviso to clause (b) of Section 142 of the NI Act. This direction shall  

2

Page 26

be deemed to be applicable to all such pending cases where the complaint  

does not proceed further in view of our answer to question (i). As we have  

already held that a complaint filed before the expiry of 15 days from the  

date of receipt of notice issued under clause (c) of the proviso to Section  

138 is not maintainable, the complainant cannot be permitted to present  

the very same complaint at any later stage. His remedy is only to file a  

fresh  complaint;  and  if  the  same  could  not  be  filed  within  the  time  

prescribed under Section 142(b), his recourse is to seek the benefit of the  

proviso, satisfying the Court of sufficient cause. Question (ii) is answered  

accordingly.

43. Criminal appeals may now be listed for consideration by the  

regular Bench.

……………………………CJI. (R.M. Lodha)

……………………………..J. (Kurian Joseph)

……………………………..J. (Rohinton Fali Nariman)

New Delhi, September 19, 2014.

2

Page 27

2