Condonation Of Delay In Cheque Bounce Cases

While legal remedies are available in the Indian Legal System pertaining to Civil and Criminal matters, the law also specifies the timeline within which, the remedies could be availed by the litigants. The provision for cheque bounce under Section 138 of the Negotiable Instruments Act, 1881 is a special provision, for attaining a criminal garb. There are stricter timelines for taking action for cheque bounce, be it about presentation of cheque, serving legal notice, or initiating a complaint. The law regarding condonation of delay in cheque bounce cases has been discussed here. 

Timelines under Section 138 of NI Act

When a cheque is presented for encashment before a bank, and the same is returned unpaid due to insufficiency of funds or other reason as per Section 138 of the Negotiable Instruments Act, 1881, a legal notice has to be served to the drawer of cheque within 30 days of receiving the memo from the bank. The said cheque bounce notice particularly provides a period of 15 days for the drawer to make payment of the said amount which was owed through the dishonoured cheque. If payment is not cleared within the said 15 days, cause of action to proceed with legal action under Section 138 of NI Act commences from 16th day. Now, the criminal complaint has to be made within 30 days.

Condonation of Delay under The Limitation Act, 1963

While the statutory limitation is provided in most of the cases, which brings a time limit for legal remedies. Section 5 of the Limitation Act provides for extension of prescribed period. Applications for condonation of delay need to specify the reasons which restrained the petitioner/applicant/complainant/appellant from approaching the Court within the given time. If the Court finds the same to be sufficient cause of delay, it may allow condonation. 

Condonation of Delay under Negotiable Instruments Act, 1881

The limitation period for taking cognizance of complaint under Section 138 of NI Act has been provided under Section 142 of the same. Section 142(b) clearly states that “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”. This makes it clear that a cheque bounce complaint has to be made within 30 days if payment is not made after legal notice is served.
However, the proviso to Section 142(b) states that “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”. In other words, condonation of delay in cheque bounce cases may be allowed, if the Court is satisfied of the sufficient cause due to which the delay was caused in filing the complaint. The reasons could be the drawer of cheque convincing the payee of making payments, or the health issues faced by the complainant, etc. 

Judgments on Condonation of Delay in Filing Complaint under Section 138

• Birendra Prasad Sah v. State of Bihar and Anr (8th May, 2019)
  The Supreme Court of India allowed condonation of delay in cheque bounce case while admitting that sufficient cause was shown by the complainant for the delay caused in filing the complaint as reflected in the queries to the postal department regarding receipt of first legal notice, which was eventually followed by serving second legal notice. The Apex Court therefore restored the complaint under Section 138 of NI Act. 
• Pawan Kumar Ralli v. Maninder Singh Narula (11th August, 2014)
  In this case, the High Court had quashed a cheque bounce case under Section 138 of NI Act stating delay in filing the complaint. The Supreme Court noted that the complainant had first served a handwritten notice, which was well within time, and followed by a legal notice through advocate, which went beyond the limitation. The Apex Court said that the High Court should have considered the first notice since it complied with the mandate for legal notice under Section 138 of NI Act. Even otherwise, the Court sought restoration of the matter quashed by the High Court, while ordering an application for condonation of delay in cheque bounce case.
• Subodh S. Salaskar vs Jayprakash M. Shah (1st August, 2008)
  In this case, two post-dated cheques which were issued in 1996, were presented before the bank in 2001. While there was delay in filing a complaint under Section 138 of NI Act, there was absence of any application seeking condonation of delay in cheque bounce case. Thus, the Supreme Court found the case malicious, refused restoration of the matter and found the provisions of cheating under Section 420 of Indian Penal Code, 1860 attracted against the applicant.
• M/S Saketh India Ltd. v. M/S India Securities Ltd. (10th March, 1999)
  The matter herein pertained to the delay in filing complaint under Section 138 of the Negotiable Instruments Act, 1881. The Supreme Court in this case clarified that “Ordinarily in computing the time, the rule observed is to exclude the first day and to include the last. Applying the said rule, the period of one month for filing the complaint will be reckoned from the day immediately following the day on which the period of 15 days from the date of the receipt of the notice by the drawer, expires.” It clarified that the limitation period starts on expiry of the 15 day period after receipt of legal notice by the drawer of cheque.