ORDER :

[PRAYER: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the entire records in pursuant to the order passed by the 3rd respondent vide Ref.No.BO(Che)/0001/C-201617006007177/2016-17 dated 21.06.2017 and quash the same and consequently direct the respondents 1 and 2 to realise the cheque dated 08.08.2016 bearing No.126604 drawn on the 2nd respondent's bank within a stipulated time.]

1. The petitioner challenges the order passed by the Banking Ombudsman, Reserve Bank of India/R3, which rejects his complaint on the ground that it does not make out any of the grounds of complaint set out in clause 8 of the Banking Ombudsman Scheme 2006.

2. The petitioner states that he had entered into a loan agreement with another individual, in terms of which the petitioner had advanced a loan of sum of Rs.10,00,000/- to him. The amount was to be repaid within 11 months from date of the agreement or whenever the demand for repayment is made. The petitioner had made a demand for repayment of the amount along with interest on 08.08.2016 and the individual had handed over a crossed bank cheque for an amount of Rs.10,00,000/- drawn on the 2nd respondent bank i.e., Oriental Bank of Commerce, Chennai – 600040 (herein after referred as 'drawee bank').

3. The petitioner did nothing further till the fag end of the 90 day period provided for validity of the cheque and lodged it on 07.11.2016 before the 1st respondent Bank i.e., Indian Overseas Bank. The 1st respondent Bank had passed the cheque to 2nd respondent bank the next day, the 91st day as a result that, R2 dishonored the cheque by way of slip dated 08.11.2016 on the ground 'Stale/outdated cheque'.

4. It is the petitioner's case that the cheque had been presented by him on the last day of validity, being 07.11.2016 and hence it was incumbent upon R2 bank to have honoured the same. He alleges deficiency of services and states that if at all there was any error, it was on the part of the 1st respondent Bank in failing to have forwarded the cheque for payment before the 2nd respondent bank on the same date that he had presented it, being 07.11.2016.

5. A complaint had been preferred to 3rd respondent i.e., Banking Ombudsman, Reserve Bank of India, praying for the realization of the cheque along with costs, which has came to be rejected by way of impugned order dated 21.06.2017.

6. The issue that arises for resolution is as to whether the period of 90 days that is provided for validity of the cheque would end as on the date when the instrument was presented before any bank or when presented before the drawee bank which has to honour the same.

7. I had, on 22.12.2022 directed the parties to circulate relevant Instructions/Circulars issued by the Reserve Bank of India that would throw light on this issue. A Circular bearing No.RBI/2011-12/251 dated 04.11.2011 has been placed before me providing a clarification in regard to the payment of cheques/drafts/pay orders/banker's cheques. The Reserve Bank of India has clarified that with effect from 01.04.2012, banks should not make payment of cheques/drafts/pay orders/banker's cheques bearing that date or any subsequent date, if they are presented beyond the period of three months from date of such instrument. This Circular provides no clarity on the actual question that has been crystallized for resolution.

8. Useful reference may be made to judgment of the Hon'ble Apex court in Shri Ishar Alloy Steels Ltd. Vs. Jayaswals Neco Ltd., ((2001) 3 SCC 609) wherein the question that arises was as to the import of the words 'the bank' as set out in clause (a) of the proviso to Section 138 of the Negotiable Instruments Act, 1881, that reads as follows:-

“2.(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 col