If Ground Of Delay In Filing S.138 NI Act Complaint Is Raised For First Time In Appeal, Case May Be Remanded Back For Consideration U/S 142(b): In Karnataka High Court

The Karnataka High Court has ruled that if a party opposing proceedings brought under Section 138 of the Negotiable Instruments Act fails to raise the issue of delay in filing the complaint before the court of first instance, the Court in Appeal has the authority to remand the case for further consideration of the issue of delay condonation under Section 142(b) of the Act. 

In the case of M/S. A. Seating & Others v. M/S. Nandini Modulars (Criminal Revision Petition No.1242/2021), a single judge bench led by Honourable Justice H P Sandesh said, “In the case on hand also, this is a peculiar facts and circumstances of the case and no such contention was taken before the Trial Court by the petitioners (accused under Section 138 NI Act) and if they had raised The complainant should have been given an opportunity to make the necessary application to excuse the delay before the Trial Court, and the issue has been raised before the Appellate Court for the first time. The complainant’s complaint cannot be dismissed solely because of the delay.” 

Facts of the case:  

The petitioners M/S. A. Seating and others filed a revision petition in the High Court, asking the court to set aside the trial court’s judgment convicting the petitioners for the offence punishable under Section 138 of the Negotiable Instruments Act, as well as the Appellate Court’s judgment remanding the case to the trial court. 

M/s. Nandini Modulars was the name of the complainant’s business. The accused promised the complainant that he would repay the amount of Rs.13,58,921/- within 15 days, and he also issued four checks in the complainant’s name as security for the loan amount. When those checks were presented, they were returned with the endorsement “funds insufficient.” 

The petitioners were secured after a complaint was filed and cognizance was taken, and they did not plead guilty. The petitioners were found guilty by the Trial Court after considering both oral and documentary evidence. 

The accused argued on appeal that the complaint was barred by limitation, that no application had been filed with the Trial Court, and that the petitioners’ case had been started incorrectly. The appellate court remanded the case to the Trial Court, instructing it to decide the application first and then proceed with the matter as per law, relying on the Apex Court’s decision in the case of Pawan Kumar Ralli. As a result, the appellate court set aside the Trial Court’s order of conviction and sentence. 

“There was a seven-day delay in filing the complaint,” petitioners claimed, “and the Appellate Court incorrectly observed that the ground of delay was not raised at all before the Trial Court.” Furthermore, the Appellate Court does not have the authority under the Cr.P.C. to remand the case to the Trial Court in order to allow the complainant to file a condonation of delay application. The delay application should have been filed along with the complaint, but it was not, and the question of giving an opportunity was not raised. 

“Since for the first time, the petitioner had raised the objection with regard to the delay in filing the complaint,” the Complainant’s counsel argued in opposition to the plea. As a result, the Appellate Court considers the application and concludes that deciding such an application is solely within the jurisdiction of the Magistrate to exercise his discretion to excuse the delay, not the Appellate Court, and that the Appellate Court cannot usurp the Trial Court’s jurisdiction. 

It also instructed the complainant to file an application with the Trial Court under Section 142(b) of the N.I. Act, and the Trial Court, after hearing objections from the petitioners, to decide the application first and then proceed according to law. 

Court findings: 

“For the first time, the issue of delay is raised before the Appellate Court,” the bench said after reading the appellate court’s order. 

It went on to say, “Should have filed an application for condonation of delay if such defense was brought before the Trial Court as directed by this Court in the case of G. Thimmappa (supra). It is also stated that if a delay is discovered, the Trial Court may order the complainant to file an application for delay condonation. The Trial Court was not presented with any circumstances.” 

It added, “In 2003, Section 142 was amended, and clause (b) was added, keeping in mind the reasons and objects of the Act and to relieve the complainant of the hardship. The Court must consider the legislature’s wisdom in bringing such an amendment, and when the issue is raised for the first time in the appeal, the Court must consider all of these factors.” 

The court went on to say, “When the issue of limitation is raised before the Appellate Court, the complainant immediately files an application before the Appellate Court for condonation of delay, and the Appellate Court comes to the conclusion that the delay cannot be considered in the Appellate Court usurping the powers of the Trial Court, and the same must be dealt with by the Trial Court.” 

“The Court (appellate) has to take note of the very proviso of Section 142(b) of the N.I. Act which confers jurisdiction upon the Court to condone the delay i.e. original Court or else the very purpose and wisdom of the parliament would be defeated,” the statement continued. 

As a result, the petition was dismissed. It ordered the trial court to conclude the case within a year. 

Judgement Reviewed by Manju Molakalapalli. 

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