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1992 Supreme(P&H) 87
PUNJAB & HARYANA HIGH COURT
G.S.Chahal, J.
Guishan Rai
Versus
Anil Kumar
Criminal Miscellaneous No. 8855 of 1991,
Decided On : JANUARY 21, 1992
The presentation of a post-dated cheque beyond six months from the date of making does not constitute an offense under Section 138 of the Negotiable Instruments Act, 1988.
Headnote:
NEGOTIABLE INSTRUMENTS ACT - SECTION 138 - SECTION 7 - SECTION 118 - Interpretation of Section 138 of the Negotiable Instruments Act, 1988 - Post-dated cheques - Presentation within six months from the date of making - Date of making of a cheque - Legal provisions and their interpretations influencing the court's decision.
Fact of the Case:
The petitioner issued post-dated cheques to the respondent as part of a compromise agreement. The cheques were dishonored due to insufficient funds. The respondent filed complaints under Section 138 of the Negotiable Instruments Act, 1988, and the petitioner sought to quash the complaints and summoning orders.
Finding of the Court:
The court held that the presentation of the cheques beyond six months from the date of making, as determined by Section 7 of the Act, does not constitute an offense under Section 138. The court relied on the plain reading of Section 138 and the definition of 'making' in Section 7, which states that a cheque is deemed to have been made on the day it is filled in and signed by the drawer.
Issues: 1. Whether the presentation of post-dated cheques beyond six months from the date of making constitutes an offense under Section 138 of the Negotiable Instruments Act, 1988? 2. Interpretation of Section 138, Section 7, and Section 118 of the Negotiable Instruments Act, 1988.
Ratio Decidendi: 1. Section 138 of the Negotiable Instruments Act, 1988 requires the presentation of a cheque within six months from the date of making, not from the date it carries at its face. 2. The date of making a cheque is determined by Section 7 of the Act, which defines 'making' as the day the cheque is filled in and signed by the drawer. 3. The presumption under Section 118 that a negotiable instrument bearing a date is presumed to have been made on that date does not apply when the date is rebutted by clear averments of the parties.
Final Decision: The court allowed the petition, quashed the impugned complaints, and the summoning orders.
Chahal, J.
1. This order will dispose of three connected criminal miscellaneous Nos.8855-M/- 1991.8857-M/1991 and 8859-M/1991 brought under Sec.482. Criminal Procedure Code for quashing of three complaints brought by the respondent against the petitioner for offence under Sec.138 of the Negotiable Instruments (Amendment) Act, 1988 (for brevity T1the Act ). The petitioner also seeks the quashing of the summoning order dated 1.7.199 1, passed by the Judicial Magistrate I Class. Karnal in these complaints.
2. The brief facts leading to the litigation may be enumerated. In 1988 a private limited concern, known and styled as Sai Beverage Pvt. Ltd. was floated and a piece of land was purchased in District Sonepat, while its registered office was situated at 43 Km. Stone, Karnal GT Road. Disputes having arisen, civil litigation started which culminated in a compromise. Under the terms of compromise, the petitioner agreed to pay a total sum of Rs.10,00,000.00 to the respondent and his associates through instalments. The respondent had to hand over the shares issued in his name and in the names of his associates Post dated cheques were issued. The cheques in dispute in the 3 complaints are: 2 cheques dated 15.2.1991 each for Rs.1,00,000.00 3rd cheque dated 15.4.1991 for Rs.1,50,000.00 and 4th cheque dated 15.5.1991 for Rs.1,50,000.00 . These cheques, when presented to the bank, were dishonoured as the funds were not arranged for. The respondent claims to have served the necessary notice and the payments having not been made, he has initiated the prosecution.
3. The fact that the cheques were post-dated is not disputed. However, there is a dispute as to the date when these were issued. According to the petitioner, the cheques were issued on 12th March, 1990; while according to the respondent they were issued on 5th March, 1990 at the time of execution of the compromise deed. The case of the petitioner is prima facie corroborated by a reference to receipt P-1 issued by the respondent in favour of the petitioner and P-2 issued by the petitioner in favour of the respondent, read along with clause 1 whereby it had been agreed between the parties that the mode of payment will be by means of cheques to be drawn by the Defendants/appellants in favour of the Share holders belonging to the Respondents group whose names will be given by the Respondent to the appellant showing amount to be paid to each payee, as per schedule of instalments, shown above, in respect of total amount of Rs. ten lakhs to be paid to them. The Defendants/ Appellants will issue post-dated cheque simultaneously on transfer of the share certificates held by the Respondent and his associates in respect of the above said two companies, and those shall have the first charge on the present and future assets of the appellant. The recitals in the compromise deed clearly postulated the issuing of post-dated cheques simultaneously when the shares were transferred. I may, however, add that the date of issue of the post-dated cheques, whether 5th March, 1990 as claimed by the respondent or 12th March, 1990 as claimed by the petitioner, will not make any material difference for the decision of the present case, as in either case, the legal proposition will be the same.
4. Section 138 of the Act envisages the commission of an offence by the drawer of a cheque which has been dishonoured if the conditions mentioned therein are fulfilled. One of the conditions in proviso (a) to the section is to the effect that the cheque has been presented to the bank within a period of six months from the date on which is drawn or within the period of its validity, whichever is earlier. A plain reading of this section shows that the cheque has to be presented not beyond the period of six months from the date of its making. It shall be irrespective of the fact as to the date which the cheque carries at its face. The presumption under Sec.118 of the Act that The negotiable instrument bearing the d
