A. Sreekantan Nair vs P. Valsarajan

S. Ashok Kumar

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.

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 u/s 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.

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.

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.

In Anil Kuamr Sahney v. Gulshan Rai, reported in 1993 SCC (Cri). 1243, Their Lordships of the Supreme Court have held as follows:

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"" u/s 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 u/s 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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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 u/s 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 u/s 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 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. 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.

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.

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.

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 leaf 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 subject

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.

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 u/s 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.

Call the matter on 30.6.2006.