IMPORTANT POINT
A post dated cheque remains a bill of exchange till the date written on it, it becomes cheque from the date shown on its face and period of six months as mentioned in section 138(a) of Negotiable Instruments Act has to be reckoned from the date mentioned on the face of cheque.

JUDGMENT

Kuldip Singh, J. - Leave granted.

Anil Kumar Sawhney filed three complaints before the Chief Judicial Magistrate, Kamal alleging that Gulshan Rai, the accused therein, had committed an offence under section 138 of the Negotiable Instruments (Amendment) Act, 1988 (for short the Act). The learned Magistrate issued summons in each of the three complaints to Gulshan Rai for his appearance in the said proceedings. Gulshan Rai challenged the orders of the learned Chief Judicial Magistrate before the Punjab and Haryana High Court by way of criminal miscellaneous petitions under section 482, Cr. P.C. Learned Single Judge of the High Court quashed the proceedings on the short ground that the cheques in dispute being post-dated cheques, the provisions of section 138 of the Act were not attracted and, as such, no offence was made out on the admitted facts of the criminal complaints. These appeals by way of special leave petitions are by Anil Kumar Sawhney against the order of the High Court.

2. The appellant and the respondent were the share-holders of M/s. Sai Beverages Private Limited, a private limited company having its registered office at Kamal. The company had two groups of share-holders, one led by the appellant and the other by the respondent. Disputes between the two groups of share-holders led to the filing of a civil suit at Kamal. Ultimately the parties arrived at a settlement which was recorded in a deed of compromise dated March 5, 1990. The appellant agreed to transfer all the shares standing in the names of his group-associates to the respondent-Gulshan Rai for a total consideration of Rs. 10 lacs. The payment was to be made by way of eight post-dated cheques of different amounts. The suit was disposed of in terms of the settlement entered into between the parties. Some of the cheques were enchased on presentation to the bankers. Two cheques dated February 15, 1991 for Rs. 1 lac each, one cheque dated April 15, 1991 for Rs. 1,50,000/- and another cheque dated May 15, 1991 for Rs. l,50,000/- were returned by the banks with the endorsement "not arranged for - no funds". The appellant thereafter issued notices as contemplated under Section 138 of the Act and having failed to receive the payment; filed complaints before the Chief Judicial Magistrate at Kamal.

3. The Banking, Public Financial Institutions and Negotiable Instruments Law (Amendment) Act, 1988 (the Amendment Act) came into force with effect from April 1 , 1989. The Amendment Act inserted a new Chapter XVII in the Act (enacting sections 138, 139, 140 and 142). The Statement of Objects and Reasons given in the Amendment Act for inserted a new Chapter XVII in the Act are as under:

"(xi) to enhance the acceptability of cheques in settlement of liabilities by making the drawer liable for penalties in case of bouncing of cheques due to insufficiency of funds in the accounts or for the reason that it exceeds the arrangements made by the drawer, with adequate safeguards to prevent harassment of honest drawers;"

Sections 5,6, 19, 138, 139and 140 of the Act,

to the relevant extent, are reproduced hereunder:

"'Bill of Exchange' is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.

6. "Cheque". - A 'cheque' is a bill of exchange drawn on a specified banker and not expressed to be pay able otherwise than on demand,

19. Instruments payable on demand. – A promissory note or bill or exchange, in which no time for payment is specified, and a cheque, are payable on demand.

138. Dishonour of cheque for insufficiency etc. of funds in the account.

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid,