Cheque Bounce Complaint Filed Before Expiry of 15 Days from Legal Notice Is Not Maintainable: Karnataka High Court Quashes Conviction

“Premature Complaint Is No Complaint In The Eyes Of Law – Conviction Cannot Be Sustained”: Karnataka High Court, in a landmark judgment, ruled that a cheque bounce complaint filed before the expiry of the mandatory 15 days’ period from the date of service of the legal notice is legally untenable and void ab initio. The Court quashed the conviction of the accused under Section 138 of the Negotiable Instruments Act, 1881, holding that the complaint was filed prematurely.

High Court observed:
“A complaint filed before expiry of 15 days from the date on which notice has been served on the drawer cannot be said to disclose the cause of action in terms of Section 138(c) of the N.I. Act. Such a complaint is not maintainable in the eyes of law.”

“Section 138 Is A Penal Provision – Mandatory Compliance With Its Ingredients Is Non-Negotiable” — Court Relies On Supreme Court Judgments

The Court heavily relied on two authoritative Supreme Court decisions:

• Yogendra Pratap Singh v. Savitri Pandey, AIR 2015 SC 157, and

• Gajanand Burange v. Laxmi Chand Goyal, 2022 LiveLaw (SC) 682.

Reiterating the settled position of law, the Court emphasized:
“If the period prescribed in clause (c) of the proviso to Section 138 has not expired, there is no commission of an offence nor accrual of cause of action for filing of a complaint under Section 138. The Court is barred in law from taking cognizance of such a complaint.”

The judgment reaffirmed the binding principle that filing a cheque bounce complaint even a day before the expiry of 15 days from the receipt of the demand notice is a "jurisdictional defect", not a mere procedural irregularity.

Background Of The Case: Complaint Filed On The 13th Day — Both Trial Court And Appellate Court Ignored The Fatal Defect

The complainant Ananda had advanced a loan of Rs. 1,00,000 to the accused Arumugam, against which a cheque dated 10.12.2015 was issued. The cheque was dishonoured on 21.12.2015 for the reason "funds insufficient".

A statutory demand notice was sent on 30.12.2015, which was admittedly served on the accused on 01.01.2016. However, the complainant filed the complaint on 13.01.2016, before the lapse of the mandatory 15-day period, which was due to expire only on 16.01.2016.

Despite this glaring defect, both the XIX ACMM, Bengaluru and the LXVI Additional Sessions Judge, Bengaluru, convicted the accused under Section 138 N.I. Act, sentencing him to pay a fine of Rs. 1,75,000, and in default, undergo 6 months simple imprisonment.

“Premature Filing Results In Nullity — Cognizance Taken Was Without Jurisdiction” — Karnataka High Court Declares

The High Court categorically held:
“Cognizance cannot be taken upon a complaint submitted prior to the expiry of 15 days from receipt of the notice. Such a complaint does not disclose a legally valid cause of action.”

It further noted:
“Merely because at the time of taking cognizance by the Court the period of 15 days had expired does not cure the defect. The jurisdiction to take cognizance cannot be retroactively validated.”

“Drawer Cannot Escape Liability — Liberty Granted To File Fresh Complaint”

In a balanced approach, the Court ensured that the drawer does not escape the consequences of dishonouring the cheque merely on a technical defect. Citing the judgment of the Supreme Court in Yogendra Pratap Singh, the Court granted liberty to the complainant to file a fresh complaint within one month from the date of this order, with the delay deemed to be condoned under the proviso to Section 142(b) of the N.I. Act.

Court’s Directions — Trial To Be Concluded Within 6 Months

The High Court directed:
“If the complainant files a fresh complaint within one month, the trial court shall dispose of the same expeditiously, preferably within a period of 6 months.”

It also ordered that:

• The trial court should return all original documents to the complainant after retaining certified copies.

• The amount deposited by the accused during the pendency of the proceedings shall be kept in Fixed Deposit in Karnataka Bank, CMM Court Branch, in the name of the Deputy Registrar, with auto-renewal.

• The successful party in the eventual outcome shall be entitled to this deposit.

Legal Takeaway From The Judgment

This judgment reinforces a crucial procedural safeguard in cheque bounce cases:

• Filing a complaint before expiry of the 15-day demand period is not merely a technical irregularity but a fatal defect rendering the complaint non-maintainable.

• The right to prosecute under Section 138 N.I. Act accrues only after failure to pay within 15 days of receipt of the legal notice.

It further ensures that while procedural rigor must be followed, substantive justice is not defeated, as the complainant is allowed to initiate fresh proceedings with automatic condonation of delay.

Key Observation From the Court: “The drawer of the cheque cannot be allowed to escape from prosecution merely on a technical count that a premature complaint was filed against him before expiry of the statutory period. Such drawer is liable to be prosecuted in a second successive complaint filed on the same facts.”

Date of Decision: 18 June 2025