Court Holds Magistrate Must Condone Delay Before Taking Cognizance in NI Act Complaints; Complaint Quashed

A bench of Justice Sanjay Kumar and Justice Alok Aradhe heard the criminal appeal arising from a challenge to the Karnataka High Court’s order dated 28.06.2024 refusing to quash a complaint under Section 138 of the Negotiable Instruments Act. The principal question before the Court was whether a Magistrate could take cognizance of a belated complaint under Section 142(1)(b) of the NI Act before first being satisfied that the complainant had “sufficient cause” for delay and thereby condoning that delay.

The Supreme Court allowed the appeal and set aside the High Court order. The Court held that the proviso to Section 142(1)(b) required the complainant to satisfy the Court that there was sufficient cause for not making the complaint within time and that such satisfaction — resulting in condonation of delay — must precede the act of taking cognizance. The Court observed that taking cognizance before condoning delay was an error of law and could not be treated as a harmless irregularity. The Court, in its reasoning, observed: “It is manifest from the clear and unambiguous language of the above proviso that the power conferred upon the Court to take cognizance of a belated complaint is subject to the complainant first satisfying the Court that he had sufficient cause for not making the complaint within time. The satisfaction in that regard, resulting in condonation of the delay, must therefore precede the act of taking cognizance. Ordinarily, a proceeding instituted with limitation-linked delay before a Court of law does not actually figure as a regular matter on its file until that delay is condoned.” The Court consequently quashed the complaint that had been registered and converted into a criminal case.

Background The dispute arose from a loan transaction in which the respondent alleged that the appellant had borrowed ₹5,40,000 between January and July 2010 and later issued a cheque dated 10.07.2013 in her favour; the cheque was dishonoured on presentation on 17.07.2013 for insufficiency of funds. The respondent issued a legal notice dated 13.08.2013; service by courier was not returned and the complainant treated it as deemed served. The complaint under Section 138 NI Act was filed on 09.10.2013 and the then Magistrate took cognizance on the same day. The successor Magistrate on 23.05.2014 noted a delay of two days but registered the case and gave the accused liberty to challenge the delay at trial. An application for condonation of the delay was later filed and, by order dated 30.10.2018, the Magistrate allowed the application, relying on a medical certificate indicating viral fever, and directed issuance of a non-bailable warrant.

The appellant moved the Karnataka High Court by way of a Section 482 petition, contending that cognizance could not have been taken before the delay was condoned and that the complaint was barred by limitation. The High Court dismissed the petition, holding that the two-day delay was bonafide and that the proviso to Section 142(1)(b) empowered the Court to take cognizance of a belated complaint if sufficient cause was shown; the High Court treated the sequence as not vitiating proceedings where delay was subsequently condoned.

The Supreme Court examined the statutory language of Section 142(1)(b), the proviso inserted by Act 55 of 2002, and the scheme of the NI Act, and considered the Court’s earlier pronouncements including Dashrath Rupsingh Rathod v. State of Maharashtra (2014) to the extent relevant. The Court held that the High Court’s approach treating condonation and cognizance as interchangeable departed from the statutory mandate. Noting that the complainant had averred in the complaint that it was filed in time when it was not, the Court found that taking cognizance before condonation was impermissible. The Supreme Court set aside the High Court order and quashed the complaint in PCR No. 3144 of 2013 (converted as CC No. 1439 of 2014), thereby ending the criminal proceedings initiated before the learned Magistrate.

Case Details: Case No.: 2026 INSC 27 (Criminal Appeal @ SLP (Crl.) No. 18127 of 2024) Case Title: S. Nagesh v. Shobha S. Aradhya Appearances: For the Petitioner(s): Advocate for the Appellant (name not specified in the judgment) For the Respondent(s): Advocate for the Respondent (name not specified in the judgment)