Saturday, 14 January 2017

Whether accused can be convicted for dishonour of time barred undated cheque?

 Under  Section 138 of the Negotiable Instruments

Act,  as the validity of a cheque is only for 6 months  from

the  date of issuance, the implied authorisation for filling

up  the cheque should certainly be within the  limitation of

six months and not more than the period of limitation. As it

has  been proved that the undated cheque was handed over one

year and six months prior to the date of the cheque, I am of

the considered view that the dishonour of the same would not

create    any    criminal   liability   on   the    revision

petitioner/accused.  The  courts below  without  considering

the  legal aspect under the Negotiable Instruments  Act  and

also  the  factual circumstances, have given the  concurrent

finding which has to be construed as a manifest error of law

and   to   meet  the  ends  of  justice,  it  warrants   the

interference  of  this  Court.   Accordingly,   I  find   it

reasonable to allow this criminal revision petition.
IN THE HIGH COURT OF JUDICATURE AT MADRAS

                      DATED: 23.11.2006

                           CORAM:

         MR. JUSTICE S. TAMILVANAN

                   Crl.R.C.No.1439 OF 2004
                              

Ramakannan   Versus Chettiar and Co.,






     This criminal revision is directed against the judgment

of  conviction and sentence imposed in Criminal Appeal No.11

of  2004,  dated  02.08.2004 confirming the  conviction  and

sentence  imposed  by  its judgment in C.C.No.5482  of  2000

dated 18.02.2003.



      2.  The revision petitioner is the accused in the case

registered  on the complaint given by the respondent  herein

under  Section  138  of  the  Negotiable  Instruments   Act.

According   to  the  respondent/complainant,   towards   the

business transaction, the revision petitioner/accused had to

pay  a  sum of Rs.1,14,471/- to the respondent, for a period

from 09.05.1998 to 09.09.1998 and towards part payment,  the

revision petitioner issued a cheque bearing No.628595  dated

28.03.2000  drawn on Vijaya Bank, Vadapalani Branch,  for  a

sum  of  Rs.83,407/- in favour of the respondent/complainant

and  requested the complainant to present it for  collection

on  28.03.2000.  Accordingly, when the cheque was  presented

by the respondent herein, through Bank of Rajasthan Limited,

N.S.C  Bose  Road,  Chennai, the same was  returned  by  the

Vijaya  bank  on  29.03.2000  with  an  endorsement,  'Funds

insufficient' and therefore, the respondent issued  a  legal

notice,  the  original  of Ex.P.4.  Though  the  notice  was

received  by the revision petitioner, he had not  chosen  to

send  any  reply.   Hence, the respondent  herein  lodged  a

criminal  complaint   under Section 138  of  the  Negotiable

Instruments Act.



      3.  On  the  side  of the respondent/complainant,  the

complainant  himself  was  examined  as  P.W.1  apart   from

examining  the Assistant Manager of Vijaya Bank, Vadapalani,

as P.W.2 and documents Exs.P.1 to P.8 were also marked.  The

dishonoured cheque bearing No.628595 for a sum of Rs.83,407/-

was also marked as Ex.P.3.



      4.  According to the revision petitioner, the  undated

cheque  was  issued by him only as a collateral security  on

09.09.1998  and  nearly  after a lapse  of  two  years,  the

respondent  herein had  filled up the cheque with  the  date

28.03.2000  and misused the same.  Therefore, the  complaint

given by respondent,  itself was not legally maintainable.



      5. On the side of the revision petitioner/accused, the

Managers  of Vijaya bank and Bank of Rajasthan were examined

as  D.W.1 and D.W.2. The certified copy of the statement  of

accounts obtained from Vijaya Bank was marked as Ex.D.1  and

the statement of account obtained from Bank of Rajasthan was

marked, as Ex.D.2.



      6.  Considering the oral and documentary evidence, the

trial Court convicted the revision petitioner/accused, under

Section 138 of the Negotiable Instruments Act, against which

the   petitioner  preferred  appeal  before  the  Additional

Sessions  Judge, who confirmed  the conviction and  sentence

imposed  by  the  Trial  Court  and  dismissed  the  appeal,

aggrieved   by  which  this  criminal  revision   has   been

preferred.



      7.  It  is not in dispute that the revision petitioner

and  the  respondent  herein were having business  dealings.

According   to   the  learned  counsel  for   the   revision

petitioner, the dishonoured cheque Ex.P.3 was issued only an

undated  cheque  as security for the amount payable  by  the

revision  petitioner,  as on 09.09.1998, and the amount  was

also   paid,   but   the   cheque  was   misused   by    the

respondent/complainant.



      8.  In  support of his contention, the learned counsel

for  the  revision  petitioner, drew the attention  of  this

Court   to   the  Bills,  Ex.P.2  series,  issued   by   the

respondent/complainant, to the revision petitioner,  wherein

at  page-22  of  the typed set, Bill No.782 dated  September

4th,  1998,  the  cheque has been referred  as  Vijaya  bank

cheque  No.628595.   Similarly, in cash  bill  No.798  dated

September  9th,  1998,  the same has been stated  as  Vijaya

Bank, cheque No.628595.  Further, the respondent/complainant

in  his  evidence,  during  cross-examination,  has  clearly

admitted  that the aforesaid  bills issued by the respondent

dated  04.09.1998 and 09.09.1998 contains  cheque No.628595.

The      learned     counsel     appearing      for      the

respondent/complainant, has also not disputed the fact  that

the  aforesaid cheque number   available in the printed cash

bills  dated  04.09.1998 and 9.9.1998.  The learned  counsel

for  the petitioner, by handing over the signed cheque,  the

revision petitioner had authorised the respondent to fill it

up and present the same for payment and therefore, he cannot

question  the same.  On the other hand, the learned  counsel

appearing for the revision petitioner would contend that  as

per  the  Negotiable Instruments Act, a  cheque  has  to  be

presented within a period of six months.  Here in this case,

as  admitted by the respondent herein, the cheque was handed

over on 09.09.1998 itself, but strangely after filled up the

date  as 28.03.2000, it was presented for payment after  one

year   and six months.  Therefore, according to the revision

petitioner, the respondent cannot fix the criminal liability

on  the  revision petitioner, after a lapse of one year  and

six months, after the issuance of the undated cheque.



     9. As contended by the learned counsel for the revision

petitioner, Ex.P.3 cheque was not a post dated  cheque.   On

the  other  hand, it was an undated cheque  handed  over  on

09.09.1998  itself.  It is seen that the date on the  cheque

was  not filled up by pen, though the name of payee,  amount

in  figures  and  words were written by  pen.   Strangely  a

rubber  date  stamp  has been used to  affix  for  the  date

28.03.1999.   Even in the judgments of the trial  court,  as

well as the first appellate court, it has been held that the

disputed document is an undated cheque and not a post  dated

cheque.  Therefore, it has to be decided in the revision, as

to whether a complaint dated 24.05.2004 under Section 138 of

the  Negotiable Instruments Act, based on an undated  cheque

that  was  handed  over  by  the  revision  petitioner,   on

09.09.1998  would be legally maintainable?

      10.  In  order to enlighten this Court  on  the  legal

aspect, the following decisions were cited:

 i.   Angu Parameswari Textiles (P) Ltd., and others v. Sri
      Rajam And Co. (2001-Vol.105 Company Cases -105)

ii.   M.S.Narayana Menon alias Mani v. State of Kerala and
      another (2006 AIR SCW 4652)

iii. Y.Sreelatha @ Roja Vs. Mukanchand Bothra (2002-1-
     LW(Crl.)271)

iv.  M/s. Cement Agencies rep. By its Managing Partner,
     Vijayawada v. Vijaya Babu and Another (1997(4)Crimes 273)

v.   Narayana Menon Alias Mani Vs. State of Kerala and
     another (2006(6) SCC 39)

vi.  ShriIshar Alloys Steels Ltd., v. Jayaswals NECO Ltd.,
     (AIR 2001 SC 1161)



     11. In addition to the aforesaid arguments, the learned

counsel  for the revision petitioner would contend  that  as

per  the  findings of the trial Court, as confirmed  by  the

appellate  court, the total amount payable by the respondent

was  Rs.1,14,471/-  and under Ex.P.2, Rs.55,907/-  has  been

paid to the respondent/complainant and the balance would  be

Rs.58,564/- and therefore, the cheque for Rs.83,407/-  would

certainly  be  for a higher amount, due and payable  on  the

alleged dated, 09.09.1998.


      12.  In support of his contention, the learned counsel

for  the revision petitioner has cited the decision reported

in  Angu  Parameswari Textiles (P) Ltd., and others  v.  Sri

Rajam  And  Co.  (2001-Vol.105 Company Cases -105),  wherein

this  Court  has  held that cheque must  be  issued  towards

discharge  of whole or part of the debt and if a  cheque  is

issued  for a higher amount, then the amount due or payable,

due  to the dishonour, the cheque would not create any cause

of  action  under Section 138 of the Negotiable  Instruments

Act.   Here in this case, as found by the courts below,  the

amount  due  and  payable  would be  less  than  the  amount

specified  in  the  dishonoured cheque as contended  by  the

learned counsel for the revision petitioner.


      13. The learned counsel for the respondent has cited a

decision  of this Court reported in Y.Sreelatha @  Roja  Vs.

Mukanchand  Bothra (2002-1-LW(Crl.)271), wherein this  Court

has held thus:

           "As  per  Section 118, 138 and 139  of  the
     Negotiable  Instruments  Act,  the  Court  "shall
     presume"  the  liability of  the  drawer  of  the
     cheque  for the amount for which it was drawn  on
     accepting the consideration."
          "until the contrary is proved, the following
     presumptions shall be made;
           a. of consideration - that every negotiable
     instrument  was  made or drawn for consideration,
     and  that every such instrument, when it has been
     accepted,  endorsed, negotiated  or  transferred,
     was    accepted,    endorsed,   negotiated    for
     transferred for consideration."
     

      Here in this case the revision petitioner himself  has

not  examined  himself as a witness, but in support  of  his

contention, he examined the Manager of Vijaya Bank  and  the

Manager  of bank of Rajasthan in order to substantiate  that

the  amounts  were realised by the respondent,  through  the

said  banks  by  producing Exs.D.1 and  D.2,  statements  of

accounts relating  to the banks.



      14. The Honourable Supreme Court of India has held  in

the decision reported in  M.S.Narayana Menon alias  Mani  v.

State  of  Kerala  and  another  (2006 AIR SCW 4652) that if

the accused has discharged his initial burden, the burden is

reverted back to the prosecution and on the failure  of  the

respondent to discharge the burden so shifted on him, and in

view of the same, the conviction of accused was set aside by

the Honourable Apex Court.  In the said case, the cheque was

issued for the purpose of discounting which appeared  to  be

probable  and  that  the accused had discharge  his  initial

burden,  and the court held in such circumstances, that  the

burden  is  shifted  on  the  complainant  and  failure   to

discharge the burden so shifted on the complainant, resulted

the conviction of the accused, being  set aside.



      15.   Here in this case, admittedly the undated cheque

was   signed   and  handed  over  on  09.09.1998,   to   the

respondent/complainant.  It is not in dispute that a  cheque

should  be presented in the bank for collection, as per  the

Negotiable  Instruments Act, within a period of  six  months

from  the  date of issuance of the cheque.  As contended  by

the  learned  counsel for the respondent, the  date  of  the

cheque  has  to  be considered for computing the  period  of

limitation.   Here  in this case, it is  not  a  post  dated

cheque,  but only an undated cheque and as per the evidence,

it  had been handed over on 09.09.1998 itself, but presented

nearly after one year and six months from the aforesaid date

by  filling  up the date as 28.03.2000, by way  of  affixing

rubber stamp.



      16.  In support of his contention, the learned counsel

for the revision petitioner has cited a decision reported in

M/s.Cement Agencies rep. By its managing partner, Vijayawada

vs. Vijaya Babu and Another (1997(4) Crimes 273) rendered by

the  Andra  Pradesh High Court, wherein the Honourable  High

court of Andra Pradesh has held as follows:



          "If time barred cheques can be encashed even
     after  the expiry of the specified time, it  will
     create  so many   anomalous situations which  are
     likely  to  be  used by  unscrupulous  litigants.
     For all these reasons, the appeal fails and it is
     accordingly dismissed."
     
     

      17.  As per the Negotiable Instruments Act, limitation

has  been  prescribed and as such, though  a  signed  cheque

would lead to the presumption  of authorising the drawee  to

fill it up, and   present it for payment, the limitation  of

six  months  prescribed under the Act, cannot be altered  by

way  of an undated cheque being filled up after one year and

six  months.   In  this case, it has been  proved  that  the

undated cheque was handed over on 09.09.1998 to one year and

six  months  prior to the date available in the cheque,  and

therefore,  it cannot be legally presumed that the  revision

petitioner had authorised the respondent to fill it  up  and

present  it at any time even after the statutory  period  of

limitation, according to his convenience.  This Court is  of

the  considered  view  that filling  up  an  undated  cheque

against  the  limitation  prescribed  under  the  Negotiable

Instruments Act would be against the legislative mandate  of

the  said Act and would create an anomalous situation likely

to be misused by unscrupulous litigants.  Therefore, I am of

the  view that the undated cheque issued and handed over  on

09.09.1998  would  not  create  the  presumption  that   the

revision petitioner had authorised  the respondent  to  fill

up the date as 28.03.2000, one and half years after the same

was  handed over to be presented for payment, and therefore,

the   alleged  cause  of  action  based  on  Ex.P.3  is  not

sustainable  to maintain the criminal complaint against  the

revision petitioner.



       18.  Under  Section 138 of the Negotiable Instruments

Act,  as the validity of a cheque is only for 6 months  from

the  date of issuance, the implied authorisation for filling

up  the cheque should certainly be within the  limitation of

six months and not more than the period of limitation. As it

has  been proved that the undated cheque was handed over one

year and six months prior to the date of the cheque, I am of

the considered view that the dishonour of the same would not

create    any    criminal   liability   on   the    revision

petitioner/accused.  The  courts below  without  considering

the  legal aspect under the Negotiable Instruments  Act  and

also  the  factual circumstances, have given the  concurrent

finding which has to be construed as a manifest error of law

and   to   meet  the  ends  of  justice,  it  warrants   the

interference  of  this  Court.   Accordingly,   I  find   it

reasonable to allow this criminal revision petition.



      19.  In  the  result, without prejudice to  the  civil

right,  if  any  available to the respondent,  the  criminal

revision  petition is allowed and accordingly the conviction

and  sentence imposed by the Courts below are set aside  and

the   amount  of  Rs.25,000/-  deposited  by  the   revision

petitioner is ordered to be refunded to him.


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