Supreme Court: No Automatic or Presumed Condonation of Delay When Statute Prescribes Time Limit in NI Act Cases

The Supreme Court has clarified that when a statute lays down a mandatory time limit for filing a complaint, courts cannot assume or presume condonation of delay unless a proper application seeking condonation is filed. The ruling reaffirms the principle that limitation cannot be bypassed casually and that delay must be explained and justified in law.

On September 9, 2025, a bench of Justices Ahsanuddin Amanullah and K. Vinod Chandran quashed the summons issued against H S Oberoi Buildtech Pvt Ltd and others in a cheque dishonour case under Section 138 of the Negotiable Instruments Act, 1881. The complaint had been filed five days beyond the prescribed thirty-day limitation period without an application for condonation of delay.

The dispute arose from a complaint lodged by M/s MSN Woodtech under Section 138 of the NI Act. The cause of action had arisen, but the complaint was filed beyond the statutory period of thirty days. Despite this admitted delay, the Trial Court issued summons to the appellants, observing that the complaint was within limitation. The High Court, by its order of November 21, 2024, upheld the Trial Court’s decision.

Aggrieved, the appellants approached the Supreme Court. Their counsel argued that the Trial Court could not have issued summons when the complaint was indisputably time-barred. It was submitted that the court had incorrectly presumed timeliness despite the delay.

The appellants emphasized that under the proviso to Section 142 of the NI Act, a complaint filed after the limitation period can only be entertained if the complainant submits an application or affidavit disclosing reasons for the delay, and the court records its satisfaction that the explanation is sufficient.

The appellants’ counsel contended that no such application had been filed in the present case, making the summons legally unsustainable. The Trial Court’s conclusion that the complaint was filed within time was contrary to the record and beyond jurisdiction.

On the other hand, counsel for the respondent argued that the NI Act gives courts discretion to take cognizance even when a complaint is delayed. It was submitted that the delay of only five days was minor and within the court’s power to condone. The respondent further explained that an affidavit seeking condonation had been prepared but was inadvertently not filed with the complaint. Since the application remained pending before the Trial Court, the respondent argued that the court could consider it at any stage.

The Supreme Court categorically held that delay cannot be condoned automatically or by presumption. It observed:

“From a purely legal point of view where facts are admitted that the complaint was filed beyond the time prescribed under the statute, there cannot be an automatic or presumed condonation.”

The bench found fault with both the Trial Court and the High Court. The Trial Court wrongly presumed the complaint was filed within limitation, while the High Court erroneously held that filing of a condonation application was not a statutory mandate.

The judgment emphasized that even if Section 142 permits condonation of delay, the court must first acknowledge the existence of delay and then independently assess whether the complainant’s explanation justifies condonation. Only thereafter can cognizance be taken and summons issued. In this case, no such process was followed.

The Court explained:

“Even for the sake of argument, if it is assumed that the power under Section 142 of the Act exists for the court to condone delay, the first requirement is that the court has to take note of the fact that there is a delay and thereafter it had to go on the point whether the reasons which have been furnished by the complainant are sufficient to condone such delay and only then move on to take cognizance and proceed for issuing of summons. In the present case, the same has absolutely not been done.”

During the hearing, it was brought to the Court’s notice that parallel civil proceedings for recovery of the cheque amount had already been instituted. The bench clarified that those civil proceedings would not be prejudiced in any manner by its present order quashing the criminal summons.

With these observations, the Supreme Court allowed the appeal and set aside the summons order.

Case Title: H S Oberoi Buildtech Pvt Ltd & Ors Vs M/s MSN Woodtech

Bench: Justices Ahsanuddin Amanullah and K. Vinod Chandran

Date of Judgment: September 9, 2025