25% OFF on all LCI Courses. Offer valid till 5th Oct. Use Code: DUS25
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

sanjeev sangamnerkar (service)     30 July 2008

sec 138 NI case filed after 5 years of giving loan

I had given a loan of 3 lakhs vide DD to a party in June 2002 without any documentary evidence of being loan.The party delayed the repayment by more than 5 years and with great insistence gave me cheque for 3 lakhs in september 2007.

The cheque bounced on presentation and a case was filed in court of law under sec 138 of NI after giving due notices etc within the limitations imposed.

The party is contending that it's a time barred case.Is it really so?What are the chances of our winning as the money was paid vide DD and the party's repayment cheque for the same amount bounced?

Kindly clarify.

 



Learning

 13 Replies

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

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

 

 

sanjeev sangamnerkar (service)     31 July 2008

thanks for reply..What do we mean by "legally enforceable debt"? You mean to say if any repayment cheque is not presented within 3 years of loan given then we do not have rights to get back money under sec 138 of NI Act?

sanjeev sangamnerkar (service)     31 July 2008

Thanks for reply.....Can I have some citations or cases? If we receive a repayment cheque only after 3 years expiry for any loan given then still the time barred provision (under civil suit) applies?What ramifications does it have on my case as I received the cheque only after expiry of 3 years.

sanjeev sangamnerkar (service)     31 July 2008

thanks for reply.....I have recived some information that if a repayment cheque for some debt given is not presented within 3 years then under NI act we cannot file a case for recovery of "money"...we can only file for punishment under the act.


Whether the limitation to file civil suit withing 3 years also holds good for NI Act?


kindly clarify.

sanjeev sangamnerkar (service)     31 July 2008

thanks for reply..What do we mean by "legally enforceable debt"? Iif any repayment cheque is not presented within 3 years of loan given then we do not have rights to get back money under sec 138 of NI Act?

Guest (n/a)     01 August 2008

Sanjeev.


In your case, the limitation act provides for the limitation on filing the suit for recovery. but if within the limitation period, the liability stands acknowledged, as in your case by issuing the cheque.


if the cheque is issued within limitation period, as stated above, you can simply continue with your case, without any hesitation and you would succeed.


 

Guest (n/a)     01 August 2008

if liability is acknowledged within the limitation period, fresh limitation would apply or let us say, the limitation would get extended afresh.

Ajay Jadhav Advocate (Lawyer)     01 August 2008

When a cheque is issued by a person, law presumes existence of a debt and that the cheque was issued for discharge[repayment] of the debt. The burden of proving that the debt is time barred lies on the accused person. Also as in the present case there's no written agreement for any time period for repayment of debt, it will be presumed that the cheque was issued for repayment of debt as it seems that the accused has admitted receiving the loan amount and there is ample proof of loan amount received by the accused. Issuing a cheque by the accused will also extend the period of limitation. Creditor can also take recourse to civil proceedings for recovery of money by filing summary suit. Limitation for filing summary suit is three years from the date of cause of action which will be the date of dishonour of cheque.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     28 July 2011

 

It is easier for any accused of Ni 138 case to come out of it since it is very difficult for the complainant to prove his case but you have to face trial , once court notice is issued no quash is possible even at higher court. , unless you are ready to go up to SC.

PEOPLE LOOSE BECAUSE OF CARELESSNESS FROM BEGGINNING. THEY WASTE INITIAL TIME  IN TAKING DATES ONLY. YOU HAVE TO INITIATE  PROPER  ACTION FROM DAY ONE WITH EXPERT LEGAL ASSISTANCE THEN WINNING THE CASE WILL BE EASY, SIMPLE AND SURE.

SO THE COMPLAINANT NEED NOT BE OVER CONFIDENT.


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  



Post a Suggestion for LCI Team
Post a Legal Query