1990 (4) TMI 306 - HC - Indian Laws

Post-dated cheques beyond limit not valid under Section 138 - Prosecutions quashed

Babu Xavier Versus Lalchand Munoth

The court ruled that the post-dated cheques, drawn on May 2, 1986, and presented beyond the six-month period stipulated in Section 138 of the Negotiable ... - Issues Involved:1. Interpretation of Section 138 of the Negotiable Instruments Act.2. Validity and presentation period of post-dated cheques.3. Application of inherent powers under Section 482 of the Criminal Procedure Code.Issue-wise Detailed Analysis:1. Interpretation of Section 138 of the Negotiable Instruments Act:The primary issue revolves around the interpretation of Section 138 of the Negotiable Instruments Act, particularly the proviso (a) which requires that a cheque must be presented to the bank within six months from the date on which it is drawn or within its validity period, whichever is earlier. The court examined whether the cheques in question, which were post-dated, complied with this provision. The petitioner argued that since all cheques were drawn on May 2, 1986, and presented beyond six months, they did not meet the requirement of Section 138. Conversely, the respondent contended that the date on the cheque should be considered the date it was drawn, and since the cheques were presented within six months from these dates, the requirement was met.2. Validity and Presentation Period of Post-dated Cheques:The court delved into the legal standing of post-dated cheques, referencing both Indian and English law. It was noted that while the English Bills of Exchange Act explicitly recognizes the validity of post-dated cheques, the Indian Negotiable Instruments Act does not have a parallel provision but does recognize their validity. Section 118(b) of the Act presumes that a cheque is drawn on the date it bears unless proven otherwise. The court concluded that a cheque is considered drawn on the date it is signed in its completed form, not the date it bears. Therefore, post-dated cheques drawn beyond six months from the signing date fall outside the purview of Section 138.3. Application of Inherent Powers under Section 482 of the Criminal Procedure Code:The petitioner invoked the inherent powers of the High Court under Section 482 of the Criminal Procedure Code to quash the proceedings. The court emphasized that such powers should be exercised cautiously and only when the allegations in the complaint, taken at face value, do not constitute an offense. Citing the Supreme Court's caution in Municipal Corporation of Delhi v. R. K. Rohtagi, the court reiterated that proceedings should be quashed if allowing them to continue would be an abuse of the process of the criminal court.Conclusion:The court concluded that the cheques in question were drawn on May 2, 1986, and since they were presented beyond the six-month period stipulated in proviso (a) to Section 138, the requirements of Section 138 were not met. Consequently, the prosecutions were deemed misconceived and an abuse of the process of the criminal court. The proceedings in both cases were quashed.Summary:The judgment addressed the interpretation of Section 138 of the Negotiable Instruments Act concerning post-dated cheques and their presentation period. It determined that a cheque is considered drawn on the date it is signed in its completed form, not the date it bears. Since the cheques in question were presented beyond six months from the signing date, they did not meet the requirement of Section 138. The court exercised its inherent powers under Section 482 of the Criminal Procedure Code to quash the proceedings, deeming them an abuse of the process of the criminal court.