Cheques dated 15th, 16th March, 1995 bounced, when presented for encashment. Notices were served on accused on 29.09.95, who failed to pay amount within 15 days as per section 138 of the Negotiable Instruments Act. Period of 15 days in the present case expired on 14.10.1996. Complaints were filed on 15.10.1995. Objection was raised that the complaints were filed beyond time. Decide this objection. Note: As per section 142 of the said Act, complaint is to be made within one month of the date on which the cause of action arises.

The Statutory Framework

Section 138 of the Negotiable Instruments Act, 1881, constructs the offence in layers. The cheque must first be dishonoured — which happened here in March 1995. The payee must then serve a written demand notice within fifteen days of receiving information of the dishonour from the bank — which was done on 29th September 1995. Once that notice is served, the drawer gets fifteen days to make good the payment. It is only upon the failure to pay within those fifteen days that the offence is complete and the cause of action crystallises. Section 142(b) then prescribes that the complaint must be filed within one month of the date on which this cause of action arises under clause (c) of the proviso to section 138.

The critical question, therefore, is not whether one month has passed from the notice — that is a common misconception. The question is: when did the cause of action arise, and was the complaint filed within one month from that date?

Identifying the Date of Cause of Action

The notice was served on the accused on 29th September 1995. Under the proviso to Section 138 (as it stood before the 2002 Amendment, when the notice period was fifteen days, not thirty), the drawer had fifteen days from the receipt of the notice to make the payment. Counting fifteen days from 29th September 1995 brings us to 13th October 1995. However, in computing this period, the day of service itself — 29th September — must be excluded, and the count begins from 30th September. Counting fifteen days from 30th September, the period expires at the end of 14th October 1995.

On 14th October 1995, the drawer having failed to pay, the offence under Section 138 stood completed. This is confirmed by the well-settled position that the cause of action arises on the expiry of the fifteen-day notice period, not upon the service of the notice, and not upon the dishonour of the cheque itself. The Supreme Court in Sadanandan Bhadran v. Madhavan Sunil Kumar (AIR 1998 SC 3043 / 1998 6 SCC 514) made this unambiguously clear: the cause of action under Section 138 arises only after the drawer fails to make payment within fifteen days of receiving the statutory notice. Similarly, in Rakesh Nemkumar Porwal v. Narayan Dhondu Joglekar (1993 Cr LJ 680 Bom), it was held that the offence becomes complete only when the fifteen-day notice period expires unpaid — a complaint filed even one day before that expiry is a stillborn, premature complaint.

Computing the One-Month Period

The cause of action, therefore, arose on 14th October 1995 — the day the fifteen-day period expired. Now, the one-month period within which the complaint must be filed begins to run from the day immediately following the day on which the cause of action arose. This principle — that the day of accrual of cause of action is to be excluded from the computation — flows from the combined reading of Section 12(1) of the Limitation Act, 1963, and Section 9 of the General Clauses Act, 1897, and has been authoritatively settled by the Supreme Court in Saketh India Ltd v. India Securities Ltd (AIR 1999 SC 1090), which was subsequently affirmed by the Three-Judge Bench in Econ Antri Ltd v. Rom Industries Ltd (AIR 2013 SC 3283).

The Saketh judgment, using an almost identical fact pattern, observed with great clarity:

"Period of 15 days, in the present case, expired on 14th October, 1995. So cause of action for filing complaint would arise from 15th October, 1995. That day — 15th October — is to be excluded for counting the period of one month. Complaint is filed on 15th November, 1995. The result would be that the complaint filed on 15th November is within time."

Applying this principle: the cause of action arose on 14th October 1995. Excluding that day, the one-month period begins from 15th October 1995 and expires at the end of 14th November 1995. A complaint filed on 15th October 1995 — the very first day after the cause of action crystallised — is plainly within time.

Disposing of the Objection

The objection that the complaints were filed beyond time is, with respect, entirely without foundation. The argument proceeds on a misreading of when the cause of action arises. Quite clearly, the complaints were not filed beyond time — they were filed on the very day the cause of action accrued and, indeed, even on the day following accrual, the complaint would have been in time up until 14th November 1995.

It bears emphasis here that the settled position in law — reiterated by the Supreme Court in Veteran Co. Pvt. Ltd. v. State (IV 2004 BC 544 Cal) — is that the period of one month for filing of complaint is reckoned from the day immediately following the day on which the period of fifteen days from receipt of notice by the drawer expires. There is not even a suggestion of delay here. The complaints filed on 15th October 1995 are squarely within limitation and the objection deserves to be dismissed.

The Correct Timeline at a Glance

The complaints were filed on the very first day of the limitation window — not a day beyond time. The objection is dismissed.