Wide Interpretation Of Section 138 Of Negotiable Instrument Act, Given By Allahabad HC

The Allahabad High Court has held in a case law that once the intention of drawer to not make payment is clear, drawee need not to wait for 15 days to file complaint.

The High Court of Allahabad has interpreted the Section 1381 of the Negotiable Instrument Act, 1881, in the case of Ravi Dixit Vs State of UP & Anr. It was held that once the intention of the party is clear that it does not wish to make payment, the Complainant need not to wait for minimum period 15 days.

A Bench of Justice Dr. Kaushal Jayendra Thaker held that the petitioner replied to the notice which shows that it is clear from the drawer’s purpose that he did not wish to make the payment. If the complainant waits for the minimum time of 15 days, the reply will be ‘no’ until this is explained.

The Bench observed that the proviso (c) of that clause, which allows for duration of fifteen days, is intended to give the drawer a bona fide view of the cheque and is intended to give him the opportunity to make the payment.

It cannot, however, be interpreted as implying that the plaintiff cannot file a lawsuit even though the accused refuses to make payment.

The bench aforesaid that the proviso of Section 138 of the Act 1881 does not constitute the components of the crime punishable by Section 138. Proviso to Section 138 merely postpones the offender’s actual prosecution until he fails to pay the amount, then the required statutory time starts to lodge the complaint.

BACKGROUND

In the present case, the petitioner challenged the summons issued by the judge, arguing that he had already submitted a reply and that the complaint could have been lodged only 15 days after the date of his reply.

The cheques were dishonored on 28.5.2019, as per the averted truth. On 11.6.2019, the plaintiff submitted a notice to the applicant. Since no money was obtained by the plaintiff, on 29.6.2019, he filed a complaint under Section 138 of the Negotiable Instrument Act, 1881.

Furthermore, if the notice was submitted on 11.6.2019 and no date of service was specified, as per the General Clause Act, 30 days’ notice period would have been presumed to have been served and 15 days’ notice period would have been presumed to have been served afterwards, and then only the complaint could have been lodged by the petitioner’s learned counsel.

FINDINGS

The Court observed that the complainant had responded to the notice indicating that he had no intention of making the payment. The Court held that, once this was apparent, the claimant did not have to wait for a minimum time of 15 days

If the drawer wishes to make payment, the only purpose of proviso (c) to Section 138 of the Act, 1881 is to prevent unnecessary hardship. Therefore, the Court sees no excuse for interfering with the well-founded summons order issued by the learned Magistrate, the Court said.

Consequently, it ordered the petitioner to appear before the Court of Magistrate on or before 15.10.2020 in the form of the summoning order, in the absence of which the Court will be free to take the measures provided for by statute.

The petition was dismissed at the price of Rs. 15,000/-.

1 . Section 138 provides that when the cheque is dishonored for insufficiency of funds or for any of the prescribed reasons, the one who is at defaulter can be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or both.

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