Karnataka High Court
Smt. B. Pushpalatha vs K. Mohan on 14 July, 1997
Equivalent citations: [1998]93COMPCAS378(KAR)
Author: M.P. Chinnappa
Bench: M.P. Chinnappa
JUDGMENT M.P. Chinnappa, J.
1. An important question is raised in this petition, viz., that the complaint is not maintainable on the ground that the cheque was issued on October 15, 1992, with the date on the cheque as March 22, 1993. The said cheque was presented on April 24, 1993. The date has to be computed from the date of issuance of the cheque and not the date mentioned in the cheque itself. On that ground, counsel contended that the cheque was presented beyond 6 months from the date of issuance. Hence, the complaint is liable to be dismissed.
2. Repelling this argument, learned counsel for the respondent, however, submitted that the cheque in question was post-dated and the same was presentable before the bank for encashment only on March 22, 1993, or on subsequent date. Therefore, the cheque presented was within time.
It is an admitted fact that the respondent has lodged a complaint under section 200 of the Criminal Procedure Code before the VIIth Additional Chief Metropolitan Magistrate, Bangalore, which was registered as C.C. No. 17061 of 1993. In the complaint it is alleged that the petitioner had borrowed a sum of Rs. 45,000 to run a hotel business. To discharge the said liability the petitioner had issued a post-dated cheque for a sum of Rs. 45,000 on the same day. The cheque bearing No. 0439898, dated March 23, 1993, drawn on Canara Bank, Mahalaxmipuram Layout, Bangalore. The said cheque was presented on April 24, 1993, through his bank, viz., Apex Bank, Bangalore. The said cheque was, however, dishonoured as there were no funds. After issuing statutory notice, the complaint came to be filed. The learned magistrate has taken cognizance of the offence and directed to issue process to the petitioner. The said order is questioned in this petition.
3. In view of this argument, the question that arises for consideration is :
What is the date from which the period of 6 months has to be computed for the purpose of determining the period under section 138(a) of the Negotiable Instruments Act, 1881 ?
Proviso (a) to section 138 of the Negotiable Instruments Act, 1881, reads :
"Provided that nothing contained in this section shall apply unless -
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;"
Similar arguments were advanced before the Madras High Court and that High Court has held in Babu Xavier v. Lalchand Munoth [1992] 74 Comp Cas 716 (Mad) the use of the words in proviso (a) "... within a period of six months from the date on which it is drawn" rather than the words "within a period of six months from the date the cheque bears" and the use of the words "or within the period of its validity, whichever is earlier" rather than the words "or within the period of its validity, whichever is later" will make this intention explicit. On that ground, the court has held that the limitation for filing a complaint in respect of post dated cheques is the date on which it is drawn and signed by the drawer in its completed form and not on the date the cheque bears. This judgment has been overruled by the apex court in a judgment reported in Anil Kumar Sawhney v. Gulshan Rai [1993] 6 IT 200; [1994] 79 Comp Cas 150 (SC), wherein their Lordships have held that the period of six months shall be calculated from the date which the cheque bears. It is only when the post-dated cheque becomes a "cheque", with effect from the date shown on the face of the said cheque, the provisions of section 138 come into play. The net result is that a post-dated cheque remains a bill of exchange till the date written on it. With effect from the date shown on the face of the said cheque it becomes a "cheque" under the Act and the provisions of section 138(a) would squarely be attracted.
4. In the case on hand, it is clear that the cheque was issued on October 15, 1992, with a post-date as March 22, 1993, and the same was presented on April 24, 1993. So if the date is reckoned from October 15, 1992, the presentation of the cheque was beyond six months as on April 24, 1993, but if the date is taken as March 22, 1993, as the date of issue of the cheque, then the cheque was issued within six months. In view of the judgment of the Supreme Court it is clear that from October 15, 1992, to March 22, 1993, it was only a negotiable instrument and not a cheque. It has assumed the character of a cheque only from March 22, 1993, as per the date mentioned in the cheque. Sections 5 and 6 of the Act define "bill of exchange" and "cheque". A "bill of exchange" is a negotiable instrument in writing containing an instruction to a third party to pay a stated sum of money at a designated future date or on demand. A "cheque", on the other hand, is a bill of exchange drawn on a bank by the holder of an account payable on demand. Thus, a "cheque", under section 6 of the Act, is also a bill of exchange but it is drawn on a banker, and is payable on demand. It is thus obvious that a bill of exchange even though drawn on a banker, if it is not payable on demand, it is not a cheque. A "post-dated cheque" is only a bill of exchange when it is written or drawn, it becomes a "cheque" when it is payable on demand. The post-dated cheque is not payable till the date which is shown on the face of the, said document. It will only become cheque on the date shown on it and prior to that it remains a bill of exchange under section 5 of the Act. As a bill of exchange a post-dated cheque remains negotiable but it will not become a "cheque" till the date when it becomes "payable on demand". It is also further clear from section 19 that a "cheque" is an instrument which is payable on demand. A post-dated cheque, which is not payable on demand till a particular date, is not a cheque in the eyes of law till the date it becomes payable on demand. For an offence to be made out under the substantive provisions of section 138 of the Act it is mandatory that the cheque is presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. It is the cheque drawn which has to be presented to the bank within the periods specified therein. When a post-dated cheque is written or drawn it is only a bill of exchange and as such the provisions of section 138(A) are not applicable to the said instrument. The post-dated cheque becomes a cheque under the Act on the date which is written on the said cheque and the six months period has to be reckoned for the purposes of section 138(A) from the said date. One of the main ingredients of the offence under section 138 of the Act is the return of the cheque by the bank unpaid. Till the time the cheque is returned by the bank unpaid, no offence under section 138 is made out. A post-dated cheque cannot be presented before the bank and as such the question of its return would not arise. In view of the above discussion, I hold that the date has to be computed for the purpose of calculating six-month period under section 138(A) of the Act is six months from the date mentioned in the cheque. Accordingly, this point is answered.
5. In the result, therefore, the petition has no merit and, accordingly, it is dismissed.