A. Muthaiah vs Jayammal and Another

M. Karpagavinayagam, J.—Mr. R.T. Duraisamy, learned Counsel for the petitioner, seeking to quash the proceedings u/s 138 of the

Negotiable Instruments Act, 1881, has raised the following points :

(i) The cheque was obtained by the complainants from the accused only out of threat and coercion. Even according to the complaints, an

agreement was entered into between the complainants, and the petitioner in the presence of Panchayatdars. As per the said agreement, it was

decided that in violation of any term, the parties should go to the Civil Court. Therefore, the act of approaching the criminal Court u/s 138 of the

Negotiable Instruments Act is not valid in law.

(ii) The contents of the complaints alleging that the petitioner issued a cheque in discharge of a liability are entirely false. Therefore, the complaints

have to be dismissed.

(iii) As per the agreement, the petitioner issued the cheque on November 16,1998, in favour of the complainants but the cheque was presented on

May 13, 1999, and whereas in the agreement, it was agreed by the parties that the cheque should be presented within 5 1/2 months from the date

of the agreement. Since the cheque was presented after the expiry of 5 1/2 months in violation of the time fixed in the agreement the complaint is

not valid.

I heard Mr. K.N. Basha, learned Counsel for the respondents.

On going through the records, I am of the view that none of the rounds would merit consideration at this stage.

Merely because the parties agreed to go to the Civil Court to seek their respective reliefs that would not absolve the right of the complainants to

approach the criminal Court by filing a private complaint u/s 138 of the Negotiable Instruments Act, if the materials are available to establish that

the petitioner has committed the offence u/s 138 of the Act.

Similarly, the contention urged by Counsel for the petitioner that the entire complaint is false also cannot be countenanced in view of the fact that

whether the averments in the complaint are true or not is not the question to be decided by this Court u/s 482 of the Criminal Procedure Code.

On the other hand, the Trial Court has to decide the said issue on the basis of the materials placed before the Court. Therefore, this contention

would also fail.

Lastly, Counsel for the petitioner would contend that there is a time-limit namely S''/i months mentioned as the period of validity of the cheque.

The cheque was presented before the Bank only after the expiry of the said period and therefore the complaint is not valid.

According to Counsel for the petitioner, the period of validity of the cheque was fixed by the parties in the agreement dated November 16,

1998. On the basis of the same, it is contended that the cheque shall be presented as per Section 138(a) of the Act within a period of six months

from the date on which it was drawn or the period of validity, whichever is earlier.

It is contended by Counsel, that the meaning of the words ""within the period of validity"" is 5 1/2 months as contemplated under the agreement.

This contention, in my view, is not valid. The reading of Section 138 of the Act would clearly show that the period of its validity cannot be fixed by

the parties concerned as held by the Kerala High Court in Kesavan Thankappan Vs. State of Kerala and Another, .

The relevant observation made by the Kerala High Court is as follows (page 578):

Though the above arguments advanced by Counsel for the appellant are very attractive, they cannot be accepted on the face of Clause (a) of the

proviso to Section 138 of the Negotiable Instruments Act which reads as follows :

''Provided that nothing contained in this section shall apply unless-

(a) The cheque has been presented to the Bank within the period of six months from the date on which it is drawn or within the period of its

validity, whichever is earlier''.

From the above proviso, it is clear that the provisions of Section 138 of the Negotiable Instruments Act are enacted taking into consideration

the currency of cheques for a period of six months from the date of issue or the reduced period of validity, whichever is earlier. Therefore, this

provision of the Negotiable Instruments Act, contemplates cheques with lesser period of validity than six months, which is the general Banking

practice and stipulates that the cheque should be presented for-encashment either within the period of six months or within the period of validity of

the cheque whichever is earlier. Hence, a cheque which is issued with the reduced validity period has to be presented for encashment within the

expiry of that period so as to attract the provisions of Section 138 of the Negotiable Instruments Act.

In that case, the argument was advanced on behalf of the complainant that though the period fixed through the Treasury Code for presentation

of cheque is three months, the Banking rules promulgated by the Reserve Bank of India and the provisions of the Treasury Code promulgated by

the Governor cannot have overriding effect against the provisions of the Negotiable Instruments Act, which provides the period of six months for

the validity of the cheque. The said argument was rejected by the Kerala High Court which held that the period of validity can be fixed by the

Banking institution and not by any other party.

Thus, as held by the Kerala High Court, the period of validity can be fixed not by the parties, but by the promulgation of the Governor of the

particular State through the Treasury Code by way of regulating the procedures of the Banking institutions. Therefore, in the absence of any

Banking procedures contemplated through promulgation, it cannot be said that 5 1/2 months is the period of validity. So, as per Section 138 of the

Act, the cheque must be presented within six months. Therefore the words ""whichever is earlier"" would not be relevant and the same would not

help the petitioner/accused.

Moreover, according to the complainants, the cheque was dated May 1,1999, and the same was presented on May 13,1999 and, thereafter,

the statutory notice was issued on May 21, 1999, and despite receipt of the notice, no payment was made and, therefore, the complaint was laid

on June 25,1999. Therefore, I do not find any merit in this contention also.

Under the above circumstances, both the petitions are dismissed, as devoid of merit. Consequently, Crl. M.P. Nos. 5475 and 5476 of 2000

are closed.