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21. The question that wrenches to the fore is, whether the expression, "within the period of its validity" is elastic enough to cover a situation where the cheque is rendered invalid, even though the period of validity, expressly mentioned on the cheque, has yet not expired? Since the Parliament has, in the first part of the clause (a) of the proviso, fixed the period within which the cheque shall be presented for encashment to the drawee bank, the expression 'within the period of its validity' used in the later part of the proviso, need not be only in reference to the duration of time specified on the cheque. The period of validity may also be determined with reference to an incident CC.No.20604/2020 KABC030675442020 which renders the cheque invalid, even though the period of validity, expressly specified on the cheque, is yet to expire. The word 'period' may not govern the word 'validity'. In the later part of the clause (a) of the proviso, it is the validity of the cheque on which there is more emphasis, than the 'period'. To put it in other words, the expression 'period of validity' does not seem to be restricted to the specified 'term' of validity, and the question of invalidity of the cheque may arise on account of the circumstances, which may curtail the express specified 'term' of validity.

23. In the case of Gantha Kavitha Devi (supra), the cheque in question was drawn on State Bank of Hyderabad, payable on 20th September, 2021. The said cheque was returned unpaid with an endorsement, "invalid cheque (SBH)", as the earstwhile State Bank of Hyderabad stood merged with State Bank of India and the cheques drawn on earstwhile State Bank of Hyderabad were valid only till 31st March, 2018. In the light of the aforesaid facts, a learned Single Judge of the Andhra Pradesh High Court after adverting to clause (a) of the proviso to Section 138 of the N. I. Act, 1881, enunciated that, it is clear that if any invalid cheque is presented to the drawee bank and the same is dishonoured, it can be said that, there is no liability under Section 138 of the N. I. Act. The subject cheque was not a valid cheque on the date of its presentation, as required by clause (a) of the proviso and, hence, dishonourment of the same would not attract the liability under Section 138 of the N. I. Act.

25. It is pertinent to note that, in the case of Archana Singh Gautam (supra), as well as Gantha Kavitha Devi (supra), the cheques were returned by the drawee bank by making an endorsement which reflected upon the validity of the cheque. In the case of Archana Singh Gautam (supra), the cheque was returned with the remarks, "wrongly delivered not drawn on us"

by the Indian Bank, into which the Allahabad Bank had merged.

Whereas, in the case of Ganta Kavitha Devi (supra), the cheque was returned with the remarks, "invalid cheque (SBH)".

34. Consistent with the object of the penal provisions incorporated in Section 138 of the N. I. Act, 1881, a dishonest drawee cannot be permitted to take benefit of such a situation and defeat the rights of a payee who alters his position on the basis of the sanctity of the cheque as a negotiable instrument, especially when such cheque is returned unencashed with the remarks "insufficiency of funds".

CC.No.20604/2020 KABC030675442020 Hence as per the above said judgment only if the cheque is dishonoured for the reason as 'invalid cheque' then accused cannot be held liable. But in the present case the cheque is dishonoured not for the reason 'invalid cheque' but for the reason 'Exceeds Arrangements'. Further the cheque at Ex.P1 is presented within in the periods of its validity.