Madras High Court
A. Sreekantan Nair vs P. Valsarajan on 15 June, 2006
Author: S. Ashok Kumar
Bench: S. Ashok Kumar
JUDGMENT
S. Ashok Kumar
1. This Criminal Appeal has been directed against the judgment in STR.No:1006 of 1998 before the Subordinate Judge -cum- Sub Divisional Judicial Magistrate, Mahe, dated 23.4.1999, by which the the accused has been acquitted.
2. The brief facts of the case are as follows:
The appellant who is the complainant, filed a complaint against the accused for alleged offences under Sections 138 and 142 of the Negotiable Instruments Act. According to the complainant, on 31.3.1997 the accused borrowed a sum of Rs. 80,000/= for which he issued a cheque dated 10.4.1997 drawn on Canara Bank, Thellicherry and entrusted the same to the complainant. When the complainant presented the cheque for collection it bounced and therefore the complainant instituted STR 916/97 against the accused for alleged offences under Section 138 of the Negotiable Instruments Act. The dispute was settled between the parties and at the time of settlement the accused paid a sum of Rs. 30,000/= tot he complainant and for the balance sum of Rs. 50,000/= he issued the impugned cheque witch is subject matter of this case on 3.4.1998. Though the cheque was issued on 3.4.1998, which is the date on which STR 916 of 1997 was compromised, the cheque was dated 3.9.1998. On 8.10.1998 when the cheque was presented to the Bank for collection it got bounced. Hence the present complaint was filed by the complainant against the accused.
3. The complainant was examined as P.W.1. The Manager of the Collection Bank was examined as P.W.2 and the Manager of the drawer Bank was examined as P.W.3. The accused contended that he has already discharged his liability and there is no enforceable debt payable by him to the complainant. On behalf of the accused no witness was examined and no document was marked. The learned Subordinate Judge -cum- Sub Divisional Judicial Magistrate, Mahe, dismissed the complaint on the sole ground that the cheque was issued on 3.4.1998, but was sent for collection Six months thereafter and therefore on the date, on which the cheque was sent for collection, it is an invalid cheque since Six months have already elapsed.
4. Learned counsel appearing for the appellant would contend that it was only a post dated cheque agreed as between the parties to be sent for collection five months thereafter and that is why the cheque was dated 3.9.1998 even though it was issued on 3.4.1998, the date on which the earlier case in STR No. 916 of 1997 was settled. The cheque amount is the balance amount payable by the accused in respect of the earlier complaint in STR No. 916 of 1997.
5. In Anil Kuamr Sahney v. Gulshan Rai, reported in 1993 SCC (Crl). page 1243, Their Lordships of the Supreme Court have held as follows:
12. 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 "postdated cheque" is only a bill of exchange when it is written or drawn, it becomes "cheque" when it is payable on demand. The postdated cheque is not payable till the date which is shown o 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 postdated cheque remains negotiable but it will not become a "cheque" till the date when it becomes "payable on demand.
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14. 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 period specified therein. When a postdated 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 postdated cheque becomes a cheque under the Act on the ate which is written on the said cheque and the six months period has to be reckoned for the purpose 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 postdated cheque cannot be presented before the bank and as such the question of its return would not arise. It is only when the postdated 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 postdated cheque remains a bill of exchange till the date written on it. With effect from the dtte 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. In the present case the postdated cheques were drawn in March 1990 but they became "cheques" in the year 1991 on the dates shown therein. The period of six months, therefore, has to be reckoned from the dates mentioned on the face of the cheques.
15. Even otherwise we agree with the reasoning adopted by the Division Bench of the Kerala High Court. Section 138 has to be construed with reference to the context. If the object of bringing Section 138 of the Act on the statute has to be fulfilled then the only interpretation which can be given to Clause (a) of proviso to Section 138 of the Act is that a postdated cheque shall be deemed to have been drawn on the date it bears.
6. From the judgment of the Hon'ble Supreme Court cited above, it is clear that a post dated cheque remains only as a Bill of Exchange till the date shown on its face and it becomes a cheque payable on demand only on the date shown on its face. The reason is because before the date mentioned on the face of the cheque the cheque could not be presented and therefore there is no question for collection or return of the cheque. The cheque can be presented only on or after the date mentioned on the face of the cheque. Looked at from another angle, in all hire purchase agreements, at the time of entering into agreement, postdated cheques are received from the borrower for several months covering the entire agreement period. It is also in common practice in business circle to issue postdated cheques. If the date of issue of the cheque or the date mentioned on the face of the cheque is taken into account, then there will be lot of problem in the business circle and also in all the hire purchase agreements. As held by the Hon'ble Supreme Court, till that date which is mentioned on the face of the cheque, for the earlier period the instrument can be taken only as a Bill of Exchange. Therefore, the reasoning given by the learned Subordinate Judge -cum- Sub Divisional Judicial Magistrate, Mahe for dismissing the complaint is not sustainable.
7. Though the accused has claimed that he paid the entire money and has no criminal liability, he has not given any reason as to why the impugned cheque was issued by him in favour of the complainant. It is not his case that the cheque is forged, nor the cheque leafe does not belong to his account. According to the complainant, the cheque was given at the time of settlement of the STR. No. 916/97, a case for which, the earlier cheque given by the accused for Rs. 80,000/= bounced for which Rs. 30,000/= was paid and for the balance sum of Rs. 50,000/= the subejct matter of the impugned cheque was issued by the accused. Therefore, the contention of the accused that he has already discharged his liability fully could not be correct.
8. In the result, this Criminal Appeal is allowed. The offences committed by the accused are proved by the evidence of P.Ws 1 to 3 and the accused is liable for punishment under Section 138 of the Negotiable Instruments Act. Learned counsel for the respondent had submitted a memo stating that he has no instructions from the accused. Therefore, this Court issued a notice to the accused, but he has failed to appear. Hence the Registry is directed to issue a Non Bailable Warrant against the accused for production of the accused for being questioned as to the imposition of punishment.
9. Call the matter on 30.6.2006.