sec 138 NI case filed after 5 years of giving loan

KANDE VENKATESH GUPTA (ADVOCATE) 30 July 2008

Provisions of S.138 of the N.I.Act attracts only when the cheque is issued in discharge of legally existing liability. You can convince the court that, limitation act prohibits a person for filing a suit for recovery of money after the period of limitation, but however the liability of the debtor will not cease to pay the amount to the creditor. In the instant case, the liability of the debtor will not cease after expiry of limitation. The only prohibition is you cannot initiate proceedings for recovery of money. Having issued the cheque, the accused had accepted the liability to pay the amount and dishonoured the cheque and thus liable for punishment. You may go through the Judgment reported in

2002(1) CRIMES PAGE NO.306 between A.V.Murthy Vs. B.S. Naga Basabanna

kumar sachin (lawyer) 31 July 2008

no the case is not time barred, since u have filed the case for dishonor of the cheques issued to you, as u say, after performing all the necessary formalities.

so go ahead, without hesitation

Bhaskaran Advocate (Lawyer) 31 July 2008

Accused will be found guilty if properly prosecuted even under a time barred debt because the prosecution is for getting him punishment for his act

There are decision regarding this favouring the Complainant.

Guest (n/a) 31 July 2008

Dear Sanjeev,

Your case facts hold good for you. There is no limitation for S.138 NI Act. The time limits for sending notice etc are very specific in the Act. How ever you are advised to discuss the following decisions with your counsel.

In SIL Import, U.S.A. v. Exim Aides Silk Exporters - 1999 (2) KLT 275 (SC), K.T. Thomas & M.B. Shah, JJ. (Crl.A.No.488 of 1999) on 3rd May, 1999 decided that Limitation starts running from the date of completion of offence which is the cause of action. The language used in the above section admits of no doubt that the magistrate is forbidden from taking cognizance of the offence if the complaint was not filed within one month of the date on which the cause of action arose. Completion of the offence is the immediate forerunner of rising of cause of action. In other words cause of action would arise soon after completion of the offence, and the period of limitation for filing the complaint would simultaneously start running.(para.8)

NegotiableInstrumentsAct 1881, Ss.138 & 142 - Cause of action when arises - Requirement of sending notice, mode thereof - Provision does not state about any mode, but the starting date of cause of action is the date of receipt of notice and offence is complete on expiry of 15 days.

The duty cast on the payee on receipt of information regarding the return of the cheque unpaid is mentioned in clause (b) of S.138. Within 15 days he has to make a demand for payment. The mode of making such demand is also prescribed in the clause, that it should be “by giving notice in writing to the drawer of the Cheque”.

Hon'ble Mr.Justice K.A. Abdul Gafoor in Praveen v. Ismayil- 2005 (1) KLT 559 (Crl. A. No.420 of l999) which was d ecided on 29th June, 2004 held that

The period of limitation to file a complaint under S. 138 is mentioned in S. 142. Clause (b) of S. 142 provides that a complaint shall be made within one month of the date on which the cause of action arises under clause (c) of the proviso to S.138. The cause of action arose on the 15th day from the date of receipt of notice or the refusal to accept notice. In this case.

Your counsel may be requested to refer 1997 (2) KLT Guj. SN 76 (C.No.76)

S.J. Shah v. State of Gujarat-M.C.A. No.4088 of 1996 - 30.10.1996

K.C.Suresh (Advocate) 31 July 2008