LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

FUTURE LAWYER (future lawyer)     03 July 2010

Presentation of cheque-6 months

Dear SIR SKJ-ADVOCATE-Senior Counsel , I do agree with you that I am not aware of court proceedings, further I understand that you are well aware of court proceedings. Hence I would like ask one simple question to you. Let me know or give your right feedback then I will agree with you.

Question:-

Dishonour of Cheque-Presentation of cheque-6 months –cheque presented within 6 months of its expiry date. However, cheque reached (Saturday working hours till 12 foornoon) before drawee bank last day of its expiry date of 6 months-There will no sufficient fund in the account-cheque will bounce back-Banker will raise memo on next day date.

Use your senior expertise here and let me know whether it is amounts to offence of 138 of N.I.Act, 1881.

Further send related SC judgments if u can possible.    



Learning

 18 Replies

Dharmesh Manjeshwar (Advocate/Lawyer)     03 July 2010

I personally feel that section 138 N. I. Act will be attracted ........ 

Future Lawyer .... Please note that no offence u/s - 138 N. I. Act has been committed here at this stage ....

Offence u/s - 138 N. I. Act is committed only if the drawer of the cheque does not pay the cheque amount after expiry of the 15 days from the date of receipt of the mandatory notice sent by the drawee .....

Though the memo is raised by the Bank after the expiry of the 6 month period .... the memo relates to a cheque which was presented & dishonoured well within the 6 month period ...... hence i think 138 N. I. Act will be attracted ......

Anyone begs to differ ........ please air ur views ............. 

Satyaprakash Sharma (Advocate & Legal Consultant)     03 July 2010

I think you mean "within 6 months of date of issuance of cheque." Mr. Future Lawyer.

If that is the case, I agree with Mr.Dharmesh.

You yourself say that cheque was presented with 6 months. Therefore, S. 138 will attract provided the drawer of the cheque fails (neglects) to pay cheque amount within 15 days of receipt of statutory notice.

-Satyaprakash 

Sanjeev Kuchhal (Publishers)     04 July 2010

Cheque can be presented at the collecting bank of the payee. The collecting bank has to then send it to the drawee bank. That must be done within six months. The date which is important is the date when the cheque presented to in the bank on which such cheque has been drawn. If the cheque reached before drawee bank after the expiry date of 6 months no case u/s 138 of N.I. is made out.

 

Apex Court in the case of Anil Kumar Sawhney and Shri Ishar Alloy Steels Ltd., an offence to be made out under the substantive provisions of Section 138 of the Act, 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. Cheque has to be presented for payment in the bank on which the said negotiable instrument has been drawn and that has to be presented within six months from the date on which such negotiable instrument has been drawn.

 

When a drawee is presenting a cheque for encashment, he is obliged in view of provisions of section 138 of the Act to present it within six months and that too in the bank on which such cheque has been drawn. A person transacting in commercial activities has to take into consideration the time which would be required by the bank, where such cheques have been deposited for encashment, for processing and presenting in the drawer's bank for encashment because he is supposed to be well aware of all these eventualities. Therefore, if at all a prudent commercial person thinks that he should get the amount indicated by such cheque or negotiable instrument, he has to take the action within such period which would save him from the limitation expressed by section 138 of the Act. It is presumed that a person transacting in commercial activities is well aware of all such eventualities and mishaps. He has to act in a prudent way in a commercial transaction otherwise he has to suffer its consequences which may come in any nature including loss of money.

FUTURE LAWYER (future lawyer)     06 July 2010

Dear Sirs,

I beg your perdon, beacuse there is small error in my posting;

Question:-

Dishonour of Cheque-Presentation of cheque-6 months –cheque presented within 6 months of its expiry date. However, cheque reached (Saturday working hours till 12 foornoon) before drawee bank last day of its expiry date of 6 months-There will no sufficient fund in the account-cheque will bounce back after expiry date of 6 months -Banker will raise memo on next day date.

I have corrected the sentence in bold and underline:

Sanjeev Kuchhal (Publishers)     06 July 2010

Case u/s 138 of NI Act will not be maintainable.

Basavaraj (Asst, Manager-Legal)     06 July 2010

Yes my dear future lawyer;

Your case would not maintainable in the eye of law. Whereas the hon'ble Supreme Court held the similary question of law in K.T.Lalu V/s Kalam & another.

We can prsent the cheque before the expiry date, but when the cheque bounced after 6 months there will be no offense is made out u/s 138 Act or section 138 may not attract

In your case where you presented the cheque for payment before one day to expiry of 6 months and reached to your bankers on the same and which was doposited and bounced back after expiry of 6 months. It is your own admitted fact and evidence that your bankers raised the memo on bounced date. which is very clear case that section 138 of N.I. will not attract.

Dharmesh Manjeshwar (Advocate/Lawyer)     06 July 2010

In such a situation ...... I think the Banks will be having their rules & regulations for cheques that land up on the last day for collection ..... and that they would be making the memo on the same day so  as to avoid confusion on the issue ........

FUTURE LAWYER (future lawyer)     07 July 2010

Dear Basavaraj thanks for your judgment.

FUTURE LAWYER (future lawyer)     07 July 2010

Dear Basavaraj.R thanks for your judgment.

Satyaprakash Sharma (Advocate & Legal Consultant)     08 July 2010

Originally posted by :BASAVARAJ.R
"
Yes my dear future lawyer;

Your case would not maintainable in the eye of law. Whereas the hon'ble Supreme Court held the similary question of law in K.T.Lalu V/s Kalam & another.

We can prsent the cheque before the expiry date, but when the cheque bounced after 6 months there will be no offense is made out u/s 138 Act or section 138 may not attract

In your case where you presented the cheque for payment before one day to expiry of 6 months and reached to your bankers on the same and which was doposited and bounced back after expiry of 6 months. It is your own admitted fact and evidence that your bankers raised the memo on bounced date. which is very clear case that section 138 of N.I. will not attract.
"

Mr. Basavraj,

Can you please provide us citation or soft copy of judgment referred above?

Thanks.

 

-Satyaprakash

Basavaraj (Asst, Manager-Legal)     08 July 2010

 

    STPL LAW Software on CD
About Us Contact Us Disclaimer

 

<
Select Citation
//
  Date Topics Case Titles Citation
  August 05,2004 ACQUITTAL - Cheque Expired K. T. Lalu Versus Kalam & Another
Crl. A. No. 1002 of 1998 Decided on 5.8.2004
Negotiable Instruments Act (26 of 1881) S. 138(a), S. 138 - ACQUITTAL - Cheque Expired - Dishonour of cheque - Presentation of cheque - Six months - cheque presented within 6 months - However, cheque reached before drawee Bank after expiry of 6 months - No offence under section 138 of Act made out - Court below rightly acquitted the accused - Appeal dismissed. (Para 6)
2005 STPL(DC) 67 KER


 

Basavaraj (Asst, Manager-Legal)     08 July 2010

K.T.Lalu vs Kalam on 5 August, 2004

Blog Links
 
powered by

function LoadBlogBar() { var blogBar; var options = { largeResultSet : false, title : "Blog Links", horizontal : false, orderBy : GSearch.ORDER_BY_DATE, autoExecuteList : { executeList : ["link:indiankanoon.org/doc/1380807/"] } } blogBar = new GSblogBar(document.getElementById("blogBar-bar"), options); } // arrange for this function to be called during body.on load // event processing GSearch.setOnLoadCallback(LoadBlogBar);

Kerala High Court

IN THE HIGH COURT OF KERALA AT ERNAKULAM

CRL A No. 1002 of 1998(C)

1. K.T.LALU

... Petitioner

Vs

1. KALAM

... Respondent

For Petitioner :SRI.K.N.NARAYANA PILLAI

^ For Respondent :SRI.T.H.ABDUL AZEEZ

Coram

The Hon'ble MR. Justice K.A.ABDUL GAFOOR

Dated : 05/08/2004

: O R D E R

........L...........T....T...T.......T.......T.......T.......T...J K.A.ABDUL GAFOOR, J. @@

j

----------------------------------@@ j

CRL.A.NO.1002 of 1998@@

j

----------------------------------@@ j

Dated this 5th August, 2004@@ j

((HDR 0

CRA 1002/98

:#:@@

j

))

.HE 1

JUDGMENT@@

j

.SP 2

The appellant initiated prosecution against the first respondent for the offence punishable under Section 138 of the Negotiable Instruments Act. The prosecution ended in conviction. In the appeal by the first respondent the conviction was set aside and he was acquitted. Therefore, this appeal. The facts of this case are as follows;

2. Ext.P1 cheque is the cheque in question. It was drawn on 20-7-1993 on Kuruvilassery Service Co-operative Bank for an amount of Rs.21,500/=. It was sent for collection through the banker of the complainant on 12-1-1994. It was returned bounced as per Ext.P3 memo dated 24-1-1994 of the drawee bank with the endorsement "refer to drawer". Obviously, the meaning is that there was no sufficient fund in the account. Statutory notice was issued and the same was returned unclaimed. The amount was not paid. Therefore, the prosecution was initiated.

3. The submission of the appellant is that the trial court has, rightly appreciating the evidence on record, convicted the first respondent. The sessions judge ought not have reversed the conviction. The cheque had been duly presented for collection within six months from the date of the cheque. Therefore, there was due presentation within the time. In such circumstances, it cannot be stated that the cheque was presented beyond six months. Had it been so, the drawee bank ought to have in Ext.P3 memo mentioned it as a reason. On the other hand, Ext.P3 memo discloses that the cheque was returned with the endorsement "refer to drawer". It shows that presentation of the cheque was within the time allowed by the statute. So, the offence had been committed by the first respondent.

4. It is contended by the first resondent/accused that it is imperative that the cheque shall be presented to the bank and that such presentation shall be the presentation allowed by law. A cheque can be validly presented for collection to the drawee bank within six months from the date of the cheque. In this case, the cheque reached the drawee bank only beyond six months. Therefore, the complainant was not called upon to make his account active even with sufficient fund to honour a cheque issued far earlier than six months. So, no offence under Section 138 of the Negotiable Instruments Act is made out in this case. In this regard a decision of the apex court reported in Ishar Alloy Steels Ltd. vs.@@ CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC Jayaswants Neco Ltd. (2001 (2) KLT 148) has been relied@@ CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC on.

5. The facts of the case relied on reveal that it was in respect of a cheque dated 21-7-1997 presented for payment on 20-1-1998 within six months, which reached drawer's bank on 24-1-1998, admittedly, after six months from the date it became payable. Ext.P3 dishonour memo indicated that its date was 24-1-1998. Considering this aspect the apex court held that ........L.......T.......T.......T.......T.......T.......T..J "A combined reading of Ss.2,72 and 138 of@@ i

the Act would leave no doubt in our mind that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable. Such presentation is necessarily to be made within six months at the bank on which the cheque is drawn, whether presented personally or through another bank, namely, the collecting bank of the payee". ........L.......T.......T.......T.......T.......T.......T.......TJ

5. The facts of this case as detailed above are also similar to the one considered by of the Apex Court. Therefore, what is to be examined in this case is when did really, Ext.P1 cheque reach the bank of the accused. Ext.P3 is the memo which discloses bouncing of the cheque. It is dated 24-1-1994. It does not disclose that the cheque reached that bank only on 24-1-1994. It only discloses that the bank of the drawer had written Ext.P3 only on 24-1-1994.

6. But Ext.P8(a), the extract of the account maintained by the banker's of the accused discloses as follows.

"B.C.No.554 for Rs.21,500/= returned signed@@ i

24-1-1994."

This indicates that the bank collection memo with No.554 had reached the bank of the drawer and has been returned on 24-1-1994. This is beyond six months from the date of the cheque. Necessarily, the decision of the apex court squarely applies to the facts of this case. As Ext.P1 cheque had reached the bank of the drawer only beyond six months from its date, the appellate court was justified in reversing the conviction and to acquit the accused. In such circumstances, I find no reason for interference. This appeal fails, dismissed. .SP 1

........L.....T.......T...T.........T........T.....T.....T.......J ((HDR 0

))

.HE 2

K.A.ABDUL GAFOOR,

JUDGE.

........L.......T.......T.......T.......T.......T.......T.......T.......J ju.

.PA

........L.......T.......T.......T.......T.......T.......T.......T.......J ======================================== K.A.ABDUL GAFOOR,J.@@

AAAAAAAAAAAAAAAAAAA

CRL.A.NO.1002 OF 1998

JUDGMENT@@

EEEEEEEE

5th August 2004

================================ JU.

........L...........T.......T.......T.......T.......T.......T...J

Basavaraj (Asst, Manager-Legal)     08 July 2010

I m sorry byoversight i quoted as SC rather than KERALA High Court.

Satyaprakash Sharma (Advocate & Legal Consultant)     09 July 2010

Thanx for the Judgement Sir.


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register