Important point
Period of six months for presentation of cheque to the Banker as required under proviso (a) to Section 138 of Negotiable Instruments Act, 1881 should be reckoned in case of a post dated cheque from the date mentioned on the cheque and not the date previous to that when it was made over by the drawer to the payee.

Headnote:Negotiable Instruments Act, 1881—Section 139 Proviso (a) r/w Sections 5, 6 and 19—Post dated cheque—Presented within six months of date of cheque—Whether within time permitted under proviso (a) of Section 138? (Yes)—Appeal dismissed.
       Held : From a bare perusal of Sections 5 & 6 of the Act it would appear that bill of exchange is a negotiable instrument in writing containing an instruction to a third party to pay a stated sum of money at a designated future date or on demand. On the other hand, a ‘cheque’ is a bill of exchange drawn on a bank by the holder of an account payable on demand. Under Section 6 of the Act a ‘cheque’ is also a bill of exchange but it is drawn on a banker and payable on demand. A bill of exchange even though drawn on a banker, if it is not payable on demand, it is not a cheque. A ‘post-dated cheque’ is not payable till the date which is shown thereon arrives and will become cheque on the said date and prior to that date the same remains bill of exchange. (Para 19)
       For prosecuting a person for an offence under Section 138 of the Act, it is inevitable that the cheque is presented to the banker within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier. When a post dated cheque is written or drawn, it is only a bill of exchange and so long the same remains a bill of exchange, the provisions of Section 138 are not applicable to the said instrument. The post-dated cheque becomes a cheque within the meaning of Section 138 of the Act on the date which is written thereon and the 6 months period has to be reckoned for the purposes of proviso (a) to Section 138 of the Act from the said date. Thus while respectfully agreeing with the law laid down by this Court in the case of Anil Kumar Sawhney, 1993(4) SCC 424, we hold that six months period shall be reckoned from the date mentioned on the face of the cheque and not any earlier date on which the cheque was made over by the drawer to the drawee. (Para 20)
       In the case on hand, the cheque was prepared and made over by the drawer to the drawee on 10.11.1995 but the date mentioned thereon was 20.1.1996 and it was presented before the banker for encashment on 7.7.1996, i.e., within a period of six months from 20.1.1996. Thus we find no ground to quash prosecution of the appellant as, on the facts alleged, an offence under Section 138 of the Act is clearly made out. The appeal is accordingly dismissed. (Paras 21 and 22)

JUDGMENT

B.N. Agrawal, J.—Leave granted.

2. Challenge in this appeal has been made to judgment passed by the Bombay High Court dismissing writ application filed by the appellant upholding an order passed by a Sessions Court in revision refusing to interfere with the order passed by a 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 Madhavroa 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. 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/- 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/- was paid by the accused to the complainant. Therefore on 10.11.1995 sale deed was scribed and on that date a further sum of Rs. 1,25,000/- 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/- 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 deduced 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 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 with in 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 question posed is no longer res integra as the same is concluded by a two Judges Bench decision of this Court in the case of Anil Kumar Sawhney v. Gulshan Rai1, wherein in similar circumstances it was laid down by this Court that post-dated cheq

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Cases Referred (2)