TaxTMI 
TaxTMI 
2001 (3) TMI 1015
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.... was executed by the complainant for sale of his 1/3rd share in CTS No. 189 within Pratapganj Peth in the district of Satara for Rs. 2,21,000/- and the said sale was required to be executed in the name of mother and wife of the appellant. At the time of agreement, Rs. 50,000/- was paid by the accused to the complainant. Thereafter on 10.11.1995 sale deed was scribed and on that date a further sum of Rs. 1,25,000/- was paid by the accused to the complainant besides a post-dated cheque drawn on State Bank of India, Satara Branch, for Rs. 46,000/- bearing the date as 20.1.1996 which was made over by the accused to the complainant. Later on, the accused on several occasions made a request to the complainant for not presenting the cheque in the bank as he was not having sufficient funds in his bank account which request was acceded to by the complainant. Ultimately, as the period of six months was going to expire on 19.7.1996, the complainant had no option but to present the said cheque before his banker for encashment, but the same was returned without clearance on 11-7-1996 with the endorsement account closed. From these facts complainant deduced that the accused had deceived him whic....
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....make rules for Notary Public. But with the introduction of the Notaries Act, 1952 making elaborate provision for appointment of Notaries and their duties, functions, etc., the aforesaid provision became redundant and consequently by Section 16 of the Notaries Act, 1952, Sections 138 and 139 were repealed and thereby Chapter XVII was abolished w.e.f. 14th February, 1956. However, Chapter XVII has been re-introduced in the Act by Section 4 of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (Act 66 of 1988) with effect from 1.4.1989 with a new nomenclature for the Chapter: Of Penalties in case of Dishonour of certain Cheques for insufficiency of Funds in the Accounts. This new Chapter contains five sections, namely, Sections 138 to 142 which are altogether different from old Sections 138 and 139. The object of bringing Section 138 by the aforesaid amending Act on the Statute appears to be to inculcate faith in the efficacy of banking operations and credibility in transacting business of negotiable instruments. Despite civil remedy, Section 138 intends to prevent dishonesty on the part of the drawer of negotiable instruments to draw a ch....
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....d (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. Explanation.- For the purposes of this section, `debt or other liability means a legally enforceable debt or other liability. -(emphasis added) S.139.- Presumption in favour of holder.- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. S.140.- Defence which may not be allowed in any prosecution under Section 138.- It shall not be a defence in a prosecution for an offence under Section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that section. The concept of post-dated cheque was well known even in common law and it was in effect a bill of exchange payable on demand with a post date upon which the demand was to be made. As far back as in 1776 and while the Law of Merchant was then in process of format....
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....dated the 10th August. It is said that the cheque was, therefore, a post-dated cheque. Upon those facts being proved before the Judge, what ought he to do? Must he say that, in construing this written document, because it was handed over before the day of the date written upon it, he must put a different construction upon it and say that it is not a bill payable upon demand, but a bill payable two days after the day of its issue or negotiation? I have never heard of a cheque being so construed, and the argument of the appellant is entirely fallacious..It is not denied that, by the Bills of Exchange Act, 1882, a post dated cheque is not made invalid;..The objection as to post-dating a cheque is therefore now an obsolete and useless objection. If a cheque is dealt with as a bill of exchange before the date which it bears, then it becomes a bill of exchange in the ordinary sense; but it is not in any way an escrow. All the defences and objections are futile and must fail. In the case of Pollock vs. Bank of New Zealand (1902) XX New Zealand Law Reports 174, the Court of Appeal was considering a case where bank had paid a post dated cheque before expiry of its date and thereafter disho....
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.... but the banker should not pay such a cheque if presented before the date it bears. If, therefore, a cheque dated on a Sunday is presented on the previous business day, it should be returned with the answer `post- dated. A post-dated cheque, however, if presented at or after its ostensible date, should be paid though the banker knows it to be post-dated, and even if it has been presented before the date and refused payment. In Chalmers & Guest on Bills of Exchange, Cheques and Promissory Notes, 15th Edition, at page 74, the concept of `post- dated cheques has been explained as under:- Post-dated cheques. Cheques are often issued post-dated, that is to say, bearing a date later than that on which they are in fact issued. The purpose of issuing a post- dated cheque is to prevent the drawee banker from paying the cheque to the payee or a holder before the date written on the cheque. It is clear that the instrument is a cheque once the date written on it arrives. But its status is unclear prior to that date. It is arguable that, between the date of its issue and the date written on the cheque, it is not payable on demand and so cannot be a cheque but an instrument of a different kind.....
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....d as a conditional payment. In such a case the payment for purposes of S. 20 would be the date on which the cheque would be actually payable at the earliest, assuming that it will be honoured..As the payment was conditional it would only be good when the cheque is presented on the date it bears, namely, February 25, 1954 and is honoured. The earliest date, therefore, on which the respondent could have realised the cheque which he had received as conditional payment on February 4, 1954 was the 25th February, 1954 if he had presented it on that date and it had been honoured. From a bare perusal of Sections 5 & 6 of the Act it would appear that 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. On the other hand, a `cheque is a bill of exchange drawn on a bank by the holder of an account payable on demand. Under Section 6 of the Act a `cheque is also a bill of exchange but it is drawn on a banker and payable on demand. A bill of exchange even though drawn on a banker, if it is not payable on demand, it is not a cheque. A `post-dated cheque is not payable till the date....