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2000 Supreme(Online)(Guj) 1

GUJARAT HIGH COURT
K.S. Jhaveri, J
Navavathi v. Prabhudas
Criminal Application | 4061 of 1997



Advocates:
For the Appellants/Petitioners: None
For the Respondents: None

Cheque must be presented at the paying bank within six months; delay renders it stale and invalidates prosecution.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Dishonour of cheque - Presentation requirement - The cheque must be presented at the paying bank within six months for valid initiation of action; presenting to the collecting bank does not constitute valid presentation - Stale cheque results in quashing of complaint (Paras 6, 11, 12).

(B) The interpretation of Section 138 provides that failure to present cheque at the drawing bank within the validity period bars initiation of criminal proceedings - This interpretation aims to uphold the trust in banking transactions (Paras 6, 7).

Facts of the case:
The offence revolves around a dishonoured cheque issued for Rs. 100,000; it was presented at the collecting bank instead of the paying bank after the six-month validity period.

Findings of Court:
The presented cheque was delayed by four days at the paying bank rendering it stale, thus failing the requirements of Section 138.

Issues: The core issue was the requirement of presenting the cheque at the paying vs. collecting bank within timely bounds set by law.

Ratio Decidendi: The court determined the essentiality of presenting cheques to the paying bank to maintain the cheque's validity for prosecution, ensuring proper fulfilment of legal obligations under Section 138.

Result: Applications allowed; complaint quashed and discharge granted.

1 The petitioner, against whom a Criminal Case No. 4061 of 1997 is filed in the Court of the Judicial Magistrate (FC) at Bhavnagar, relating to the offence punishable under S.138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the Act"), prays for setting aside the common order dated June 15, 1998, passed rejecting his applications, Ext. 6, 8 and 10 for 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 six months or during its validity period for legal and valid initiation of criminal action under S.138 of the Act ?

3 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 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 on January 24, 1997. The cheque was drawn on the branch of Veraval Mercantile Cooperative Bank Ltd., Veraval, at Junagadh (for short, "the paying bank"). The opponent No. 1 presented the cheque on July 24, 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 July 28, 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 August 11, 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 September 10, 1997, filed the complaint in the court of the Chief Judicial Magistrate at Bhavnagar, which was later on assigned to the Judicial Magistrate (FC) 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 (FC) at Bhavnagar on October 9, 1997. Studying the allegation against him, he filed an application Ext. 6 on October 7, 1997, requesting the court to discharge him holding that the court was having no jurisdiction. On December 24, 1997, another application Ext. 8 was also filed by the petitioner requesting the court to dismiss the complaint and discharge him as the cheque was not presented within six months, the period of its validity. Lastly on January 21, 1998, the petitioner presented the third application, Ext. 10 requesting the court to discharge him under S.245(2) of the Criminal Procedure Code because the cheque was presented after the expiry of the period of six months. The learned judicial Magistrate at Bhavnagar heard all the three applications together and by a common order dated June 15, 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 six 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 January 24, 1997, ought to have been presented at the paying bank, within the period of six months, instead the cheque was presented on July 24, 1997, at the collecting bank. The said bank forwarded the che





























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