Dishonour of Cheque - Complaints beyond the statutory period without condonation of delay application not maintainable

Kerala High Court Sets Aside Lower Court Acquittals in Cheque Bounce Cases, Orders Fresh Trial. High Court deems earlier judgments per incuriam, emphasizes adherence to Supreme Court's interpretation of Section 138 of the Negotiable Instruments Act.

In a significant ruling on October 6, 2025, the Kerala High Court has set aside the acquittals in three cheque bounce cases, directing the Judicial First Class Magistrate Temporary Court, Neyyattinkara, to conduct a fresh trial. The cases, involving appellants P.S. Madhusoodanan and others against respondents Alamelu Ammal and others, were initially dismissed due to being filed beyond the statutory period prescribed by the Negotiable Instruments Act, 1881.

The crux of the appeal was the interpretation of the cause of action under Section 138 of the Negotiable Instruments Act. The trial court had previously acquitted the respondents, basing its decision on the Kerala High Court's earlier judgment in Jayakrishnan v. Unnikrishnan, which stated that when a statutory notice is returned as 'refused', the cause of action starts from the date of return, without the 15-day waiting period for payment. This interpretation was found to be inconsistent with the Supreme Court's ruling in C.C. Alavi Haji v. Palapetty Muhammed, which emphasized that the cause of action arises only after the completion of the 15-day period, even if the notice is refused or unclaimed, as long as it was sent to the correct address.

Justice Gopinath P., presiding over the appeals, highlighted that the earlier judgment was rendered per incuriam, having overlooked the authoritative ruling by the Supreme Court. The court clarified that the provisions of Section 27 of the General Clauses Act apply, and the presumption of notice service remains valid if sent to the correct address by registered post.

The High Court's decision underscores the importance of aligning lower court judgments with Supreme Court precedents to ensure consistency in the application of the law. The restored cases will now be re-evaluated by the trial court, with directions to consider the issue of filing within the statutory timeframe, while leaving other issues open for determination.

The parties have been instructed to appear before the trial court on October 13, 2025, for further proceedings. This judgment reiterates the judiciary's commitment to upholding procedural fairness and the legislative intent behind the Negotiable Instruments Act, 1881.

Bottom Line:

Section 138 of the Negotiable Instruments Act, 1881 - Cause of action for filing a complaint arises only after the completion of the 15-day period under clause (c) of the proviso, even if the statutory notice is returned as 'refused' or 'unclaimed' provided the notice is sent to the correct address by registered post.

Statutory provision(s): Section 138 of the Negotiable Instruments Act, 1881, Section 142 of the Negotiable Instruments Act, Section 27 of the General Clauses Act, 1897.

P.S. Madhusoodanan v. Alamelu Ammal, (Kerala) : Law Finder Doc Id # 2790222