IMPORTANT POINT
Cheque when returned unpaid on ground that it was out dated offence under Section 138 NI Act would not be attracted.

R.S. Chauhan, J.—The petitioner, Alok Sharma, is aggrieved by the order dated 26.2.2008 passed by the learned Judicial Magistrate, No.4, Ajmer, whereby the learned Magistrate has taken cognizance against the petitioner for offence under Section 138 of the Negotiable Instruments Act, 1881 (‘the Act’ for short).

2. The brief facts of the case are that the petitioner gave a cheque, namely cheque No.093189, dated 19.5.2007, for an amount of Rs.1,79,400.00 in favour of the complainant, Anurag Bhatnagar, as a payment of his commission for the services rendered by him. The cheque was drawn on the State Bank of Patiala, Branch Baroti [H.P.]. The cheque was presented by Anurag Bhatnagar to his Bank, namely the Punjab National Bank, on 15.11.2007, for encashment. But the said cheque was sent to the State Bank of Patiala for encashment on 21.11.2007 i.e. after the period of the cheque’s validity. Therefore, the State Bank of Patiala returned the cheque on the ground that it was “out-dated”. Since, the cheque had bounced, Anurag Bhatnagar sent a notice to the petitioner for the payment of the cheque amount. However, the petitioner did not make the said payment. Therefore, Anurag Bhatnagar filed a complaint for offence under Section 138 of the Act. By order dated 26.02.2008, the learned Magistrate took cognizance against the petitioner, and issued a bailable warrant in order to secure his presence. Hence, this petition before this Court.

3. Mr. Suresh Goyal, the learned counsel for the petitioner, has raised the following contentions before this Court firstly, according to Section 138 of the Act, the cheque has to be submitted before the Bank on which it is drawn, during the period of the cheque’s validity. However, in the present case, the cheque reached the State Bank of Patiala, the Bank on which it was drawn, after a period of six-months. Therefore, the cheque reached the State Bank of Patiala after the period of validity. Moreover, the Bank refused to encash the said cheque on the ground that it is “out-dated”. Secondly, Proviso (a) of Section 138 of the Act clearly uses the word “the bank”. Therefore, the article “the” refers to the Bank on which the cheque was drawn. The proviso does not refer to the collecting Bank. Thus, even if the cheque were submitted for encashment to the Punjab National Bank, on 15.11.2007, its dishonour would not bring the case within the four corners of Section 138 of the Act. In order to buttress this contention, the learned counsel, has relied upon the case of Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd., (2001) 3 SCC 609. Thirdly, while taking cognizance the learned Magistrate has passed a mechanical order. The learned Magistrate has not considered the reason for dishonour of cheque. According to the memo of the Bank, the cheque was not honoured, as it was “out-dated”. Hence, the order dated 26.2.2008 suffers from non-application of mind. Thus, it deserves to be interfered with.

4. On the other hand, Mr. Parag Rastogi, the learned counsel for the complainant-respondent, has contended that Section 75 of the Act deals with presentation of a cheque. According to Section 75 of the Act, the presentation for acceptance or payment may be made to the duly authorized agent of the drawee. Since, the complainant-respondent had received the cheque, in dispute, on 14.11.2007, he was justified in submitting its for encashment on 15.11.2007. Secondly, Section 75A of the Act deals with “Excuse for delay in presentment for acceptance or payment”. According to the said provision, a delay in presentment for acceptance of payment is excused, if the delay is caused by circumstances beyond the control of the holder. Since, the cheque was submitted for encashment during the period of its validity, a subsequent delay caused by the Punjab National Bank for presenting the cheque to the State Bank of Patiala for encashment should be excused. For, the presentation by the Punjab National Bank, after same delay, is beyond