Cheque Must Reach Payee Bank Within 6 Months To Attract Criminal Liability For Dishonour U/S 138 NI Act: Himachal Pradesh High Court

The Himachal Pradesh High Court has recently ruled that in order to attract criminal liability under the provisions of Section 138 of the Negotiable Instruments Act it is necessary that the cheque has to be presented at the bank on which it is drawn within six months as from the date of its issuance.The observations were made by Justice Ajay Mohan Goel while hearing an appeal in terms of which the appellant had challenged the judgment passed by the Court of SubDivisional Judicial Magistrate, District Mandi, H.P, in terms whereof, a complaint filed under Section 138 of the NI Act by the present appellant was dismissed.The complainant of the appellant petitioner had been rejected by Trial Court primarily on the ground that the cheque in issue was presented before the drawee bank after the due date, i.e. six months as from the date the cheque was issued.The cheque was drawn on September 14, 2004; it was deposited with drawee's bank on March 7, 2005 but was presented to the payee bank on March 24, 2005. Six months from the date of issuance of the cheque lapsed on March 13, 2005. The appellant submitted that the cheque was presented with her bank within six months as from the date its issuance and therefore, the appellant had done whatever she was supposed to do and if her bank presented the cheque to the payee bank after the period of six months as from the date of issuance of the cheque, then she could not have been made to suffer for this lapse, if any, on behalf of her bank. Accordingly, he submitted that the present appeal be allowed and the judgment passed by the learned Court below be set aside. Contesting the plea the respondents submitted that it is not the date when the holder of a cheque presents the cheque with his or her own bank for its being honoured that matters but it is the date on which the cheque is presented to the payee bank which determines as to whether the cheque has been furnished within the validity of the cheque or not and accordingly prayed for the dismissal of the appeal. After considering the rival contentions Justice Goel observed that the law mandates a cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable necessarily within six months as from the date of its issuance.In order to fortify the law on the subject the bench found it worthwhile to record the observations of supreme court in Shri Ishwar Alloy Steels Ltd. Versus Jayaswals Neco LTD., (2003) wherein SC while ruling on the subject held, "The payee of the cheque has the option to present the cheque in any bank including the collecting bank where he has his account but to attract the criminal liability of the drawer of the cheque such collecting bank is obliged to present the cheque in the drawee or payee bank on which the cheque is drawn within the period of six months from the date on which it is shown to have been issued. The non presentation of the cheque to the draweebank within the period specified in the Section would absolve the person issuing the cheque of his criminal liability under Section 138 of the Act". The court also found that the statutory notice did not contain even a single line for "demand of money". Thus the Court observed that there is no infirmity in the findings returned by Trial Court and dismissed the challenge.Case Title: Dolma Devi Vs Roshan LalCitation: 2023 LiveLaw (HP) 24For the appellant: Mr. Vir Bahadur Verma.For the respondent: Advocate. Mr. Varun Rana, Advocate.Click Here To Read/Download Judgement

Cheque Must Reach Payee Bank Within 6 Months To Attract Criminal Liability For Dishonour U/S 138 NI Act: Himachal Pradesh High Court

Basit Amin Makhdoomi

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Basit Amin Makhdoomi

Cheque Must Reach Payee Bank Within 6 Months To Attract Criminal Liability For Dishonour U/S 138 NI Act: Himachal Pradesh High Court

Basit Amin Makhdoomi

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Basit Amin Makhdoomi

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