N. Sivalingam and another vs A.V. Chandraiyer

Thangamani J.

The respondent herein preferred a complaint u/s 138 of the Negotiable Instruments Act. 1881, against one Diwan Mohideen and the petitioners

herein In C.C. No. 338 of 1990 pending on the file of Judicial Magistrate-I, Salem, alleging that two post-dated cheques, one dated April 22,

1990, for Rs. 4,800 and the other dated April 28, 1990, for Rs. 5,000 were drawn by the present petitioners on the South Indian Bank Limited,

Kanchipuram Branch, in favour of Diwan Mohideen. The latter discounted them with the respondent/complainant and received a sum of Rs. 9,214

after deducting all charges on March 12, 1990. When the complainant presented the cheques for payment, they were dishonored on September

21, 1990, with the endorsements ""refer to drawer"" and ""exceeds arrangement"" respectively. The statutory notice was issued on October 5, 1990,

to the present petitioners and Diwan Mohideen by the complainant/respondent giving seven days time to make the payment. The above said notice

was received by them on October 8, 1990. After waiting for more than 15 days as contemplated by the Act, the complaint was lodged on

November 20, 1990, u/s 138 of the Negotiable Instruments Act, 1881.

In the present petition, accused Nos. 2 and 3 in C.C. No. 338 of 1990 seek to quash the complaint by invoking the Inherent jurisdiction of this

court u/s 482 of the Code of Criminal Procedure, 1973. Their contention is that even according to the complaint the cheques were drawn only in

favour of A-1. There is no connection between the complainant and the quash petitioners. Action u/s 138 of the Negotiable, Instruments Act,

1881, envisages privity of contract between the complainant and, the accused. The complaint nowhere mentions that the present petitioners were

indebted to the respondent herein and any legally enforceable debt was subsisting on the date of complaint. The quash petitioners had issued the

two post-dated cheques individually in favour of Diwan Mohideen in different situations. Evidently there is no substance in this claim. u/s 138 of the

Negotiable Instruments Act, 1881, where any cheque drawn by a person on an account maintained by him with a banker for payment of any

amount of money to another person from out of that account for the discharge of any debt is reduced by the bad unpaid, either because the amount

of money standing to the credit of that account is insufficient to honour the cheque or it exceeds the amount arranged to be paid from that account

by an agreement made with that bank, such person shall be deemed to have committed an offence. There is nothing in the wording of the section to

hold that only the payee named in the cheque can maintain the action. The dishonour of the cheque by the banker for the two reasons stated therein

constitutes the offence by the drawer. Besides the wording in clauses (b) and (c) of the proviso to section 138 as well as section 139 would make

it clear that either the payee or the holder in due course can maintain the action.

One of the conditions for the applicability of section 138 of the Negotiable Instruments Act, 1881, is that the cheque should have been

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. In

this case, as per the averments in the complaint, the cheques bear the dates April 22, 1990, and April 28, 1990. The main argument of learned

counsel for the petitioners is that even as per the complaint these are post-dated cheques issued on March 12, 1990, and since September 21,

1990, the date of presentation is beyond six months from March 12, 1990, no offence is made out u/s 138 of the Negotiable Instruments Act,

1881. But we find from the records that while the cheque dated April 22, 1990, was presented on May 4, 1990, the other cheque was presented

on May 8, 1990. The cheque for Rs. 4,800 was returned unpaid on September 21, 1990, with the endorsement ""refer to drawer"". The other

cheque was returned on the same day with the endorsement ""exceeds arrangement"". What clause (a) of the proviso to section 138 contemplates is

the date of presentation of the cheque for payment and not the date of dishonour. So there is no substance in the claim of the quash petitioners that

no offence is made out in view of the presentation of the cheques beyond the period of six months from March 12, 1990.

Besides, in Anil Kumar Sawhney v. Gulshan Rai [1993] LW (Cri.) 641 ; [1994] 79 Comp Cas 150, the Supreme Court has laid down that for

an offence to be made out under the substantive provisions of section 138 of the Negotiable Instruments Act, 1881, 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 post-dated 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 post-dated cheque becomes a

cheque under the Act on the date which is written on the said cheque and the six month period has to be reckoned for the purposes 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 post-dated cheque cannot be presented before the bank, and

as such the question of its return would not arise. It is only when the post-dated cheque becomes a ""cheque"", with effect from the date shown on

the face of the said cheque, that the provisions of section 138 come into play. The net result is that a post-dated cheque remains a bill of exchange

till the date written on it. With effect from the date shown on the face of the sale cheque it becomes a ""cheque"" under the Act and the provisions of

section 138(a) would squarely be attracted. In the present case, the post-dated cheques were drawn on March 12, 1990, but they became

''cheques'' only on April 22, 1990, and April 28, 1990, the dates shown therein. The period of six months, therefore, has to be reckoned from the

date mentioned on the face of the cheques. As the apex court has pointed out, section 138 has to be construed with reference to 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 give to clause (a) of the proviso

to section 138 of the Act is that a post-dated cheque shall be deemed to have been drawn on the date it bears.

In the result, the criminal original petition stands dismissed. Registry is to send the records expeditiously to the trial court.