Honble SETHI, J.–Leave granted.

(a) What is meant by, ``the bank as mentioned in Clause (a) of the proviso to Section 138 of the Negotiable Instruments Act, 1881 ?

(b) Does such bank mean the bank of the drawer of the cheque or covers within its ambit any bank including the collecting bank of the Payee of the cheque ?

(c) To which bank the cheque is to be presented for the purposes of attracting the penal provisions of Section 138 of the Act ?

are the questions to be determined by this Court in this appeal.

Punjab and Haryana High Court in the case of Om Prakash vs. Gurcharan Singh (1). and Gujarat High Court in Arunbhai Nilkantharai Nanavti vs. Jayaben Prahladbhai through Her Power of Attorney and another (2) have held that a cheque must be presented to the bank on which it is drawn within six months from the date of issue of the cheque. However, Madras High Court in A.B.K. Publications Ltd. and others vs. Tamil Nadu Newsprint and Papers Ltd. (3) has taken the view that cheque can be presented either in the payees bank or in the drawer bank and the date of presentation in respective banks will be reckoned for calculating period of six months from the date it was drawn.

(3). In the present case the High Court of Madhya Pradesh has endorsed the view of Madras High Court and disagreed with the views of Punjab and Haryana and Gujarat High Courts.

(4). The admitted facts of the case are that the appellant issued Cheque No. 2477086 dated 21.07.1997 for Rs. 10 lakhs drawn on the State Bank of Indore, Industrial Estate Branch, Indore in favour of the respondent. The respondent presented the cheque for payment on 26.09.1997 which was returned unpaid. Again on 20.01.1998, the respondent presented the cheque to its bank i.e. State Bank of India at Raipur. The cheque reached the drawer bank on 24.01.1998, admittedly after six months from the date it became payable. The cheque was returned unpaid by the bank of the respondent on 3.2.1998. A notice as required under proviso (b) of Section 138 of the Negotiable Instruments Act was issued on 10.2.1998 which was received by the appellant on 16.2.1998. A criminal complaint under Section 138 of the Negotiable Instruments Act was filed in the Court of Judicial Magistrate, First Class, Raipur against the appellant in which notice was issued for appearing in the court on 23.09.1998. The appellant filed Criminal Revision No. 190 of 198 in the Court of Sessions Judge, Raipur contending that as the cheque was presented for payment beyond the period of six months as prescribed under Proviso (a) to Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ``the Act), no offence was made out, to be taken cognizance of. The revision was allowed by the Sessions Court on 3.07.1999. The respondent filed a further revision in the High Court which was allowed vide the order impugned holding, as noticed earlier, that the cheque can be presented within the six months before the drawers (payees) bank or it can be presented before the drawer as well as the payees bank.

(5). Before adverting to the various provisions of law as applicable in the case, it has to be kept in mind that the law relating to Negotiable Instruments is the law of the commercial world which was enacted to facilitate the activities in trade and commerce making provision of giving sanctity to the instruments of credit which could be deemed to be convertible into money and easily passable from one person to another. In the absence of such instruments, the trade and commerce activities were likely to be adversely affected as it was not practicable for the trading community to carry on with it the bulk of the currency in force. The introduction of negotiable instruments owes its origin to the bartering system prevalent in the primitive society. The negotiable instruments are, in fact, the instruments of credit being convertible on account of the legality of being negotiated and thus easily passable from one hand to another. The sour

Click Here to Read the rest of this document