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1999 Supreme(Guj) 317

Gujarat High Court
Judgename :H.R.Shelat
ARUNBHAI NILKANTHRAI NANAVATI - Appellant
Versus
JAYABEN PRAHLADBHAI THROUGH HER POWER OF ATTORNEY HOLDER KISHORBHAI prabhudas - Respondent
CRI.M.A. 2767 of 1998
Decided On : 07/12/1999

Advocates Appeared: KATHABEN GAJJAR, M.J.DAGLI, M.T.KIKANI, N.D.NANAVATI

Headnote:Negotiable Instruments Act, 1881 - Secs. 138 & 72 - Dishonour of cheque for insufficiency etc. of funds in account - Offence of - Presentation of cheque at the bank on which same is drawn within the validity period of six months necessary requirement of the drawer is to be held liable - In the instant case cheque was presented to collecting bank which was received by paying bank 4 days after the validity period of 6 months of the cheque - It was returned on the ground that account was closed - Held, as in the case presentation is not in consonance with Sec. 138 of the Act and is late by 4 days facts lacked one of the essential requirements of Sec. 138 for penal action - Complaint is not tenable & petitioner is liable to be discharged.

       The petitioner in order to fulfil his obligation to pay the amount, issued the cheque for Rs. 1,00,000/- on 24th January, 1997. The cheque was drawn on the Branch of Veraval Merchantile Co-operative Bank Ltd., Veraval at Junagadh (for short, `the paying Bank). The opponent No. 1 presented the cheque on 24th July, 1997 at Bhavnagar Nagrik Sahakari Bank Ltd., at Bhavnagar (for short, `the collecting Bank). On the same day, the collecting Bank sent the cheque to the paying Bank, i.e., drawee at Junagadh. The cheque was received by the paying Bank on 28th July, 1997. The cheque was on the same day returned on the ground that the account was closed. On receipt of the intimation that the cheque was dishonoured, the opponent No. 1 on 11th August, 1997, gave a notice to the petitioner calling upon him to make the payment. The payment, after the receipt of the notice, was not made. The opponent No. 1, therefore, on 10th September, 1997 filed the complaint in the Court of the Chief Judicial Magistrate at Bhavnagar, which was later on assigned to the Judicial Magistrate (F.C.) at Bhavnagar for hearing and disposal in accordance with law.

       [Para 3]

       A conjoint reading of both the Secs. 138 & 72 makes it abundantly clear that the cheque is required to be presented at the bank on which the same is drawn if the drawer is to be held liable. Of course, civil liability may remain alive, but the criminal liability would not, if the presentment is not made within 6 months or the period of validity at the bank on which the cheque is drawn. The word presentment, therefore, serves no purpose if the cheque is presented at any other bank or branch as it amounts to entrustment or tender and not `presentment. In view of such emerging effect of the provisions of the Act, the cheque if presented at the collecting bank is not the presentment of the cheque within meaning of Sec. 138.

       [Para 8]

       In this case, presentment of the cheque to the paying bank is, in view of the abovestated dates, not made within 6 months of the date of the cheque. The presentment is late by four days. The cheque, therefore, became a stale cheque and the same was, therefore, bounced without honouring the same. As the presentment is not in consonance with Sec. 138 of the Act, and is late by 4 days, one of the essential requirements of Sec. 138 of the Act for initiating penal action is not satisfied. When that is so, the complaint lodged cannot be entertained, the same has to be quashed, and the petitioner, who is the accused, in that case, is required to be discharged.

       [Para 11]

H. R. SHELAT, J.

( 1 ) THE petitioner, against whom a Criminal Case No. 4061 of 1997 is filed in the Court of the Judicial Magistrate (F. C.) at Bhavnagar, relating to the offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act), prays for setting aside the common order dated 15-6-1998 passed rejecting his applications, Ex. 6, 8 and 10, quashing of the complaint, and his discharge etc.

( 2 ) THE question of vital importance that arises for consideration is to which Bank (paying or collecting), the cheque is to be presented within 6 months or during its validity period for legally and validly initiation of criminal action under Sec. 138 of the Act ?

( 3 ) THE facts, necessary for disposal of this application, may, in brief, be stated. The petitioner and opponent No. 1, were having legal transactions. When account was settled, Rs. 1, 00, 000. 00 were found due to the opponent No. 1 from the petitioner. The petitioner therefore, in order to fulfil his obligation to pay the amount, issued the cheque for Rs. 1, 00, 000. 00 on 24/01/1997. The cheque was drawn on the branch of Veraval Mercantile Co-operative Bank Ltd. , Veraval at Junagadh (for short, the paying Bank ). The opponent No. 1 presented the cheque on 24/07/1997 at Bhavnagar Nagrik Sahakari Bank Ltd. , at Bhavnagar (for short, the collecting bank ). On the same day, the collecting Bank sent the cheque to the paying Bank, i. e. , drawee at Junagadh. The cheque was received by the paying Bank on 28th July 1997. The che cheque was on the same day returned on the ground that the account was closed. On receipt of the intimation that the cheque was dishonoured, the opponent no. 1 on 11/08/1997, gave a notice to the petitioner calling upon him to make the payment. The payment, after the receipt of the notice, was not made. The opponent No. 1, therefore, on 10/09/1997 filed the complaint in the Court of the Chief Judicial Magistrate at Bhavnagar, which was later on assigned to the judicial Magistrate (F. C.) at Bhavnagar for hearing and disposal in accordance with law. As the complaint was registered, summons against the petitioner was issued. After being served with the summons, the petitioner appeared before the Court of the Judicial Magistrate (F. C.) at Bhavnagar on 9/10/1997. Studying the allegation against him, he filed an application Ex. 6 on 7/10/1997 requesting the Court to discharge him holding that the Court was having no jurisdiction. On 24th December 1997, anotheher application Ex. 8 was also filed by the petitioner requesting the Court to dismiss the complaint and discharge him as the cheque was not presented within 6 months, the period of its validity. Lastly on 21/01/1998, the petitioner presented the third application, Ex. 10 requesting the Court to discharge him under Section 245 (2) of the Criminal Procedure Code because the cheque was presented after the expiry of the period of 6 months. The learned Judicial Magistrate at Bhavnagar heard all the three applications together and by a common order dated 15/06/1998, rejected all the three applications, mainly on the ground that the question of want of jurisdiction and bar of limitation owing to validity period of 6 months could be decided after the evidence was recorded in the case. Against that order, the present application is filed for the aforesaid relief.

( 4 ) ON several grounds, the order of the learned Judicial Magistrate, is assailed, but at the time of submissions before me, the learned Advocate representing the petitioner tapered off his submissions confining to the only point relating to the presentment of a cheque. According to him, the cheque is required to be presented at the paying Bank (drawee) and not the collecting Bank. In this case, the cheque dated 24/01/1997 ought to have been presented at the paying Bank, within the period of 6 months, instead that the cheque was presented on 24/07/1997 at the collecting Bank. The said Bank forwarded the chequ
















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