Sat. Sep 19th, 2020

Section 142 of The Negotiable Instruments Act, 1881

3 min read

142. Cognizance of offences.-

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].

 

Comments

     i.        Consequent upon the failure of the drawer to pay the money within the period of 15 days as envisaged under clause (c) of the proviso to section 138, the liability of the drawer for being prosecuted for the offence he has committed, arises, and the period of one month for filing the complaint under section 142 is to be reckoned accordingly; Sadanandan Bhadran v. Madhava Sunil Kumar, AIR 1988 SC 3043.

    ii.        A manager or any other person authorized by the company can represents it during the course of legal proceedings before the court and file a complaint; Salar Solvent Extractions Ltd. v. South India Viscose Ltd., (1994) 3 Crimes 295 (Mad).

iii.        The Magistrate while taking cognizance has to look into the question whether the ingredients of an offence have been made out or not; M/s Pearey Lal Rajendra Kumar Pvt. Ltd. v. State  of Rajisthan, (1994) 3 Crimes 308 (Raj).

iv.        The causes of action for filing compliant would arise after the compliant of 15 days from the date the drawer receives the notice and fails to pay the amount within that period; V.N. Samant v. M/s K.G.N Traders, (1994) 3 Crimes 725 (Karn).

v.        The payee cannot lodge a compliant after the completion of one month from the date on which the cause of action arose as there is a bar under clause (b) of section 142; V.N. Samant v. M/s K.G.N Traders, (1994) 3 Crimes 725 (Karn).

vi.        So long as the period of notice does not expire there can be no cause of action with the payee to make the drawer liable criminally; T. K. Khungar v. Sanjay Ghai, (1994) 3 Crimes 802 (P&H).

vii.        It is well settles that it is not necessary for the Magistrate to specifically state that he is taking cognizance of the offence. If he takes steps as provider under section 200, of the Code of Criminal Procedure then it necessarily means that he has taken cognizance of the offence;  R. Tajendra Reddy v. M/s Sujaya Feeds, (1994) 3 Crimes (Karn).

viii.        The compliant must allege in his compliant that the cheque was dishonored due to want of sufficient amount in the account , even if the payment was stopped; Ballakrishna Pillai v. Abdullakutty, (1994) 2 Crimes 327 (Ker).

ix.        Once a cause of action has arisen, the limitation will begun to run and it could not be stopped by presenting the cheque again so as to have a fresh cause of action and fresh limitation; M/s Chahal Engineering And Construction Ltd. v. M/s Verma Plywood Co., (1994) 1 Crimes 845 (P & h).

x.        The criminal prosecution has t o be launched within one month of the expiry of 15 days’ period from the issuance of notice as provided by section 142(b) of the Act; M/s Chahal Engineering And Construction Ltd. v. M/s Verma Plywood Co., (1994) 1 Crimes 845 (P & h).

xi.        When the cheque stood issued in favor of a company, a complaint under section 138 of the Act can be filed by its manager, partner, director or any person authorized by the company; M/s Ruby Leather Exports v. K Venu (1994) 1 Crimes 820 (Mad).

xii.        There is no ambiguity in clause (a) of section 142 of the Act, which prohibits or excludes compliant being initiated by Power of Attorney, agents of the payee or the holder in due course; M/s Ruby Leather Exports v. K Venu (1994) 1 Crimes 820 (Mad).

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