1. Dispute regarding reckoning six-month period for cheque presentation under Section 138, NI Act (Para 5 )
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2000 Supreme(SC) 1782
SUPREME COURT OF INDIA
B.N.Agrawal : K.T.Thomas : R.P.Sethi
Ashok Yeshwant Badave
Versus
Surendra Madhavrao Nighojakar
Case No. : 293 of 2001
Date of Decision : 11/13/00
Advocates Appeared: Adkar M.D. : Singh S.D. : Singh Vishwajit
For the purpose of the six-month presentation period under Section 138 of the Negotiable Instruments Act, the period is reckoned from the date mentioned on the face of a post-dated cheque, not from the date the cheque was handed over to the payee.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Proviso (a) - Presentation of post-dated cheque - Period of six months for presentation to be reckoned from the date mentioned on the face of the cheque and not from the date on which the cheque was made over by the drawer to the payee - A post-dated cheque becomes a cheque within the meaning of Section 138 only on the date written thereon; prior to that, it remains a bill of exchange. (Paras 19, 20)
(B) Negotiable Instruments Act, 1881 - Sections 5 and 6 - Distinction between bill of exchange and cheque - A cheque is a bill of exchange drawn on a banker and payable on demand; a post-dated cheque, not being payable until the date shown arrives, is a bill of exchange until that date. (Para 19)
Facts of the case:
A complainant filed a complaint under Section 138 of the Negotiable Instruments Act after a cheque was returned unpaid with the endorsement "account closed". The cheque was handed over to the complainant on a certain date but bore a future date. The complainant presented the cheque for encashment within six months of the date mentioned on the face of the cheque, but after six months had elapsed from the date the cheque was physically delivered. The appellant challenged the cognizance on the ground that the cheque was presented beyond six months of its delivery.
Findings of Court:
The court found that the cheque was presented on 7/7/1996, which was within six months from the date mentioned on the face of the cheque (20/1/1996). Thus, the condition precedent for prosecution under Section 138 was satisfied.
Issues: Whether the period of six months for presentation of a cheque to the banker, as required under proviso (a) to Section 138 of the Act, should be reckoned from the date mentioned on the face of the cheque or from the date it was made over by the drawer to the payee. (Para 5)
Ratio Decidendi: A post-dated cheque is a bill of exchange until the date written on it arrives. It only becomes a "cheque" within the meaning of Section 138 on the date mentioned on its face. Consequently, the six-month period for presentation under proviso (a) to Section 138 must be reckoned from the date mentioned on the face of the cheque and not from any earlier date of delivery. (Para 20)
Result: Appeal dismissed.
Legal Category Hierarchy
- crime and sentencing
-
practice and procedure
-
criminal procedure
- cognizance and issuance of process (Para 4)
-
criminal procedure
- negotiable instruments
Table of Contents
2. Contention that cheque presented after six months from delivery but within six months of its date (Para 5 , 3 )
3. Post-dated cheque deemed drawn on its date; six months reckoned from that date (Para 20 , 21 )
4. For a post-dated cheque, six-month period under Section 138 proviso (a) runs from the date on the cheque (Para 20 , 21 )
5. Appeal dismissed; prosecution under Section 138, NI Act upheld (Para 22 )
6. From which date is the six-month period for presenting a post-dated cheque under Section 138, NI Act, proviso (a) reckoned?
From the date mentioned on the face of the cheque, not the earlier date of delivery. (Para 20 , 21 )
7. What is the legal status of a post-dated cheque before its ostensible date?
It is a bill of exchange, not a cheque, and Section 138 does not apply to it. (Para 19 , 20 )
JUDGMENT
B.N.AGRAWAL, J.
(1) LEAVE granted.
(2) CHALLENGE in this appeal has been made to the judgment passed by the Bombay High Court dismissing the writ application filed by the appellant upholding the order passed by the sessions court in revision refusing to interfere with the order passed by the learned Chief Judicial Magistrate taking cognizance and issuing process against the appellant for the offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the Act).
(3) SURENDRA Madhavrao Nighojakar - respondent no. 1 filed a petition of complaint in the Court of Chief Judicial Magistrate, Satara on 2/9/1996 for prosecution of the appellant under Section 138 of the Act besides Section 420 of the Penal Code which was registered as Criminal Case No. 11348/96. The case of the complainant in short is that on 4/7/1993 an agreement to sell was executed by the complainant for sale of his 1/3rd share in CTS No. 189 within Pratapganj Peth in the district of Satara for Rs. 2,21,000.00 and the said sale was required to be executed in the name of mother and wife of the appellant. At the time of agreement, Rs. 50,000.00 was paid by the accused to 510 the complainant. Thereafter on 10/11/1995 sale deed was ascribed and on that date a further sum of Rs. 1,25,000.00 was paid by the accused to the complainant besides a post-dated cheque drAWn on State Bank of India, Satara Branch, for Rs. 46,000.00 bearing the date as 20/1/1996 which was made over by the accused to the complainant. Later on, the accused on several occasions made a request to the complainant for not presenting the cheque in the bank as he was not having sufficient funds in his bank account which request was acceded to by the complainant. Ultimately, as the period of six months was going to expire on 19/7/1996, the complainant had no option but to present the said cheque before his banker for encashment, but the same was returned without clearance on 11/7/1996 with the endorsement "account closed". From these facts complainant deducted that the accused had deceived him which necessitated issuance of notice by the complainant to the accused on 22/7/1996 which was refused by him on 6/8/1996 whereafter the present complaint was filed.
(4) UPON the filing of the petition of complaint the complainant was examined on solemn affirmation and by order dated 2/9/1996 the Magistrate took cognizance of the offence under Section 138 of the Act and issued process against the accused. The said order having been unsuccessfully challenged by the accused before the sessions court as well as the High Court, the present appeal by special leave is before us.
(5) PROSECUTION of the appellant for the offence under Section 138 of the Act has been assailed on the sole ground that even if the facts disclosed in the complaint are taken at their face value and accepted in entirety, no offence at all much less the offence under Section 138 of the Act is made out as one of the conditions precedent for its applicability is that cheque must be presented to the bank within a period of six months from the date on which it was drAWn or within the period of its validity whichever is earlier, but in the case on hand the cheque was presented before the banker for encashment after expiry of six months from the date it was made over by the accused to the complainant, though within a period of six months from the date mentioned on the cheque. As such, the question which arises for our consideration is :
"whether period of six months for presentation of cheque to the banker, as required under proviso (a) to Section 138 of the Act, should be reckoned from the date mentioned on the face of the cheque or a date previous to that when it was made over by the drAWer to the drAWee."
(6) THE questioned posed is no longer res integra as the same is concluded by a two Judge Bench decision of this Court in the case of Anil Kumar Sawhney v. Gulshan Rai
