1

Reportable

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

    CRIMINAL APPEAL NO(S). 000868 OF 2019 (@SLP(Crl) No(s). 10811 of 2018)

Birendra Prasad Sah                              …Appellant(s)

                               VERSUS

The State of Bihar & Anr.                        …Respondent(s)

J U D G M E N T   

Dr Dhananjaya Y Chandrachud, J

1 Delay condoned.

2 Leave granted.

3 This appeal arises from a judgment of a learned Single Judge of the High Court

of Judicature at Patna dated 10 May 2018 by which an order taking cognizance of an

offence under Section 138 of the Negotiable Instruments Act, 18881 has been quashed.

1 “Act”

2

4 The facts, briefly stated, are thus:

5 The dispute arises over two cheques drawn on the State Bank of India in the

amount of Rs 36,00,000 and Rs 13,00,000 which were returned unpaid under a memo

issued by the UCO Bank, Begusarai on 20 November 2015. The appellant received the

memo on 4 December 2015. Following this, a legal notice was issued on 31 December

2015 intimating the dishonour of the cheque. According to the appellant, between 14

February 2016 and 23 February 2016, he made queries with the postal department but

no proof of service was provided.  Accordingly, on 26 February 2016, a second legal

notice was issued. This was replied to by the second respondent on 2 March 2016.

Eventually, a complaint under Section 138 was instituted on 11 May 2016.  

6 The  Chief  Judicial  Magistrate,  Begusarai  by  an  order  dated  14  July  2016,

condoned the delay in filing the complaint. While taking cognizance, the CJM issued

summons  to  the  second  respondent.  The  second  respondent  instituted  revisional

proceedings before the Sessions Judge which were rejected on 8 March 2017. In a

further recourse to the High Court under Section 482 CrPC, the learned Single Judge

held that the complaint under Section 138 was not filed within the statutory period of

thirty days prescribed under Section 138 as a result of which the proceedings were

quashed.

7 Assailing  the  judgment  of  the  High  Court,  Mr  Nagendra  Rai,  learned  Senior

Counsel submitted that in MSR Leathers v. S Palaniappan2 a three judge Bench of this

Court has taken the view that the issuance of successive notices is permissible under

the provisions of Section 138 having regard to the object of the legislation.   Moreover,

2 (2013) 1 SCC 177

3

the learned Senior Counsel submitted that the delay in the institution of the complaint

was condoned by the CJM under Section 142. Hence, there was an error on the part of

the High Court in quashing the proceedings.

8 On the other hand, Mr Jay Savla, learned Senior Counsel appearing on behalf of

the second respondent submitted that:

(i) The second legal notice dated 26 February 2016 was sent beyond a period of

thirty days of the receipt of the memo of dishonour on 4 December 2015 and

hence cannot be the basis of a valid institution of a criminal complaint;

(ii)  If at all, the complaint could have only been instituted on the basis of the first

legal notice dated 31 December 2015 which was within thirty days of the receipt

of the memo of dishonour;

(iii) The complaint which was lodged on 11 May 2016 was beyond the stipulated

period from the date of issuance of the first notice;

(iv)  The CJM had condoned the delay which had occurred in the institution of the

complaint only for the period after 6 April 2016 after the issuance of the second

notice; and

(v) In the decision of the three judge Bench in MSR Leathers (supra), there was a

re-presentation of the cheque as a result of which, a fresh notice was held to be

within the ambit of the law.

9 Section 138 provides thus:

“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

4

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 honour 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 provision of this  Act,  be  punished with  imprisonment  for3 [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 months4 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,5 [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.”

10 In the present case, the facts narrated above indicate that the appellant issued a

legal notice on 31 December 2015. This was within a period of thirty days of the receipt

of  the  memo  of  dishonour  on  4  December  2015.  Consequently,  the  requirement

stipulated in proviso (b) to Section 138 was fulfilled. Proviso (c) spells out a requirement

that the drawer of the cheque has failed to make payment to the holder in due course or

payee within fifteen days of the receipt of the notice. The second respondent does not

as a matter of fact, admit that the legal notice dated 31 December 2015 was served on

him.  The appellant  has in  the complaint  specifically  narrated the circumstance that

despite repeated requests to the postal department, no acknowledgment of the notice

3 Sub. by Act 55 of 2002, sec. 7, for a “term which may be extended to one year” (w.e.f. 6-2-2003). 4 The period has been reduced from six months to three months vide R.B.I Notification No. RBI/2011-12/251, DBOD.AML BC. No. 47/14.01.001/2011-2012, dated 4th November, 2011 (w.e.f. 1-4-2012). 5 Subs. by Act 55 of 2002, sec. 7, for “within fifteen days” (w.e.f. 6-2-2003).

5

was furnished. It was in these circumstances that the appellant issued a second notice

dated 26 February 2016. Cognizant as we are of the requirement specified in proviso

(b) to Section 138, that the notice must be issued within thirty days of the receipt of the

memo of dishonour, we have proceeded on the basis that it is the first notice dated 31

December 2015 which constitutes the cause of action for the complaint under Section

138.

11 The  complaint  was  instituted  on  11  May  2016.    Under  Section  142(1),  a

complaint has to be instituted within one month of the date on which the cause of action

has  arisen under  clause  (c)  of  the proviso  to  Section  1386.   The  proviso  however

stipulates  that  cognizance  of  the  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.   Both  in  paragraphs  7  and  8  of  the

complaint, the appellant indicated adequate and sufficient reasons for not being able to

institute the complaint within the stipulated period. These have been adverted to above.

The CJM condoned the delay on the cause which was shown by the appellant for the

period commencing from 6 April 2018. However, if paragraphs 7 and 8 of the complaint

are  read together,  it  is  evident  that  the appellant  had indicated sufficient  cause for

seeking condonation of the delay in the institution of the complaint. The High Court has

merely adverted to the presumption that the first notice would be deemed to have been

served if it was dispatched in the ordinary course.  Even if that presumption applies, we

6142  (1)  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..

6

are of the view that sufficient cause was shown by the appellant for condoning the delay

in instituting the complaint taking the basis of the complaint as the issuance of the first

legal notice dated 31 December 2015.    

12 In  the  view which  we have taken,  we have come to  the conclusion  that  the

impugned  judgment  of  the  High  Court  is  unsustainable.  The  appeal  is  accordingly

allowed and the order passed by the learned Single Judge is set aside. The complaint

shall accordingly stand restored to the file of the trial court.

13 We have not expressed any opinion on the merits of the rival contentions which

will be adjudicated upon during the trial.

...........…………………….....................J.                            [Dr  Dhananjaya Y Chandrachud]

……………………................................J.                  [Hemant Gupta]

NEW DELHI;  May 8, 2019.

7

ITEM NO.43               COURT NO.11               SECTION II-A

              S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (Crl.)  No(s).  10811/2018

(Arising out of impugned final judgment and order dated  10-05-2018 in CRLM No. 27495/2017 passed by the High Court Of Judicature at Patna)

BIRENDRA PRASAD SAH                                Petitioner(s)                                 VERSUS

THE STATE OF BIHAR & ANR.                          Respondent(s)

 Date : 08-05-2019 This petition was called on for hearing today.

CORAM :  HON'BLE DR. JUSTICE D.Y. CHANDRACHUD          HON'BLE MR. JUSTICE HEMANT GUPTA

For Petitioner(s) Mr. Nagendra Rai, Sr. Adv. Ms. Prerna Singh, Adv.

                   Mr. Shantanu Sagar, AOR Mr. Aakash, Adv. Ms. Priya Ranjan, Adv.                    

For Respondent(s) Mr. Keshav Mohan, Adv. Mr. Rishi K. Awasthi, Adv.

                   Mr. Santosh Kumar - I, AOR

Mr. Jay Saula, Sr. Adv.                     Mr. Arvind Gupta, AOR

Mr. Sanjeev Kumar Verma, Adv.                   

         UPON hearing the counsel the Court made the following                              O R D E R

 Delay condoned.

Leave granted.

The appeal is allowed in terms of the signed reportable

judgment.

Pending application(s), if any, shall stand disposed of.

(MANISH SETHI)                                  (SAROJ KUMARI GAUR) COURT MASTER (SH)                                  BRANCH OFFICER

  (Signed reportable judgment is placed on the file)