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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 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 CRI APL 940-26.DOC the circumstances, which may curtail the express specified 'term' of validity.

22. In the case of Archana Singh Gautam (supra), on which reliance was placed by Mr. Svar, the cheque was drawn on an account maintained with Allahabad Bank, payable on 02 nd June, 2023, though the Allahabad Bank had already merged with the Indian Bank on 01st April, 2020, and the cheques drawn on Allahabad Bank were valid upto 30 th September, 2021, only. In that context, a learned Single judge of the Allahabad High Court held that, if any invalid cheque was presented to the drawee bank and the same was dishonoured, no liability under Section 138 of the N. I. Act would be attracted. Since the cheque drawn on Allahabad Bank was valid, up to 30 th September, 2021 only, dishonourment of such cheque after 30 th September, 2021 would not attract the penal liability under Section 138 of the N.I. Act, as the cheque was not valid on the date of presentation as mandated by the clause (a) of the proviso to Section 138 of the N. I. Act.

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 CRI APL 940-26.DOC 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.

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)".

Yet, the process for an offence punishable under Section 138 of the N. I. Act, 1881 was issued in those cases.

26. The object of Section 138 of the N.I. Act, 1881 is to inculcate faith in the efficacy of banking operations and ensure credibility in transacting business through cheques. The Supreme Court has thus delineated the approach in the case of Dalmiya Cement (Bharat) Ltd. Vs. Galaxy Traders & Agencies Ltd. & Ors9., that efforts to defeat the objectives of law by resorting to innovative measures and methods are to be discouraged, lest it may affect the commercial and mercantile activities in a smooth and healthy manner, ultimately affecting the economy of the country.