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        2020 (9) TMI 1108 - HC - Indian Laws

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        Postdated cheque presentation runs from the cheque date, and a recalled precedent reference does not undo the limitation ruling. Article 35 of the Limitation Act was held to govern a suit on dishonoured cheques, and the mistaken reference to a recalled decision was treated as an ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                            Postdated cheque presentation runs from the cheque date, and a recalled precedent reference does not undo the limitation ruling.

                            Article 35 of the Limitation Act was held to govern a suit on dishonoured cheques, and the mistaken reference to a recalled decision was treated as an error apparent without upsetting the substantive limitation reasoning. On postdated cheques, Section 84 of the Negotiable Instruments Act was read harmoniously with proviso (a) to Section 138, so the relevant time for presentation ran from the date written on the cheque, not the date of delivery. On the facts, the cheques were presented within the permissible period after they became payable, no material alteration was proved, and the challenge to maintainability failed.




                            Issues: (i) Whether the erroneous reliance on a recalled decision warranted interference with the earlier conclusion on the applicable limitation provision. (ii) Whether the presentation of postdated cheques after a long interval offended the rule on reasonable presentation time under the Negotiable Instruments Act, 1881.

                            Issue (i): Whether the erroneous reliance on a recalled decision warranted interference with the earlier conclusion on the applicable limitation provision.

                            Analysis: The earlier conclusion that Article 35 of the Limitation Act, 1963 applied to a suit on dishonoured cheques was based on a detailed examination of the statutory scheme. The mistaken reliance on a recalled judgment was an error apparent, but it did not affect the substantive reasoning supporting the conclusion on limitation.

                            Conclusion: The conclusion on the applicability of Article 35 was not disturbed, but the mistaken reference to the recalled decision was directed to be deleted.

                            Issue (ii): Whether the presentation of postdated cheques after a long interval offended the rule on reasonable presentation time under the Negotiable Instruments Act, 1881.

                            Analysis: Section 84 of the Negotiable Instruments Act, 1881 had to be read harmoniously with proviso (a) to Section 138 of the Negotiable Instruments Act, 1881. For a postdated cheque, the relevant commencement point for presentation is the date borne on the cheque, not the date of delivery. On the facts found, the cheques were presented within the permissible period after they became payable, and no material alteration was established.

                            Conclusion: The presentation was not held to violate Section 84, and the challenge on limitation and maintainability failed.

                            Final Conclusion: The review succeeded only to the limited extent of deleting the erroneous reference to the recalled precedent, while the substantive findings on limitation and cheque presentation remained undisturbed.

                            Ratio Decidendi: In the case of a postdated cheque, the period for presentation must be determined by reading Section 84 of the Negotiable Instruments Act, 1881 harmoniously with proviso (a) to Section 138 of the same Act, so that the date borne on the cheque governs the commencement of time.


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                            ActsIncome Tax
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