Payment by honoured cheque within statutory time counts on presentation, not realisation, under the settlement scheme.

Where the Kar Vivad Samadhan Scheme required payment within 30 days but did not prescribe actual realisation as a condition, an honoured cheque tendered within that period constituted payment on the date of presentation. The court applied Rule 80 of the Central Treasury Rules and held that, absent any contrary statutory requirement, payment by cheque is deemed made when the cheque is presented if it is honoured. As the petitioner's cheque was not dishonoured, later realisation did not defeat compliance with section 90(2) of the Finance (No. 2) Act, 1998. The refusal to issue the certificate under the Scheme was therefore unlawful.

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Issues: Whether payment of the amount determined under the Kar Vivad Samadhan Scheme, 1998 by cheque is to be treated as payment on the date of presentation of the cheque or on the date of its realisation, for the purpose of compliance with the 30-day period under section 90(2) of the Finance (No. 2) Act, 1998.

Analysis: The Scheme required the declarant to pay the sum determined within 30 days of the designated authority's order. The Court held that the provision prescribed the time for payment but did not lay down any special mode requiring actual credit into the Government account within that period. Rule 80 of the Central Treasury Rules recognises payment by cheque as deemed made on the date of presentation if the cheque is honoured, and no contrary condition was imposed by section 90(2). The cheque tendered by the petitioner was not dishonoured, and the mere fact that it was realised later did not defeat the statutory payment requirement.

Conclusion: Payment by cheque had to be treated as payment on the date of presentation of the cheque. The petitioner's payment was therefore within time, and the refusal to grant the certificate under the Scheme was illegal. The writ petition was allowed in favour of the assessee.

Ratio Decidendi: Where a statute requires payment within a prescribed time but does not insist on actual realisation, an honoured cheque tendered within that period constitutes payment on the date of presentation.

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