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CASE NO.: Appeal (crl.) 219  of  2001 Special Leave Petition (crl.)   3854     of  2000

PETITIONER: SHRI ISHAR ALLOY STEELS LTD.

       Vs.

RESPONDENT: JAYASWALS NECO LIMITED

DATE OF JUDGMENT:       22/02/2001

BENCH: B.N.Agarwal, R.P.Sethi, K.T.Thomas

JUDGMENT:

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

     SETHI,J.

     Leave  granted.   (a) What is meant by, "the bank"  as mentioned in Clause (a) of the proviso to Section 138 of the Negotiable  Instruments Act, 1881?  (b) Does such bank  mean the  bank  of the drawer of the cheque or covers within  its ambit any bank including the collecting bank of the Payee of the cheque?  (c) To which bank the cheque is to be presented for  the  purposes  of attracting the  penal  provisions  of Section  138 of the Act?, are the questions to be determined by this Court in this appeal.  Punjab and Haryana High Court in  the  case  of Om Prakash v.  Gurcharan Singh  [1997  (3) Crimes  433] and Gujarat High Court in Arunbhai Nilkantharai Nanavti  v.   Jayaben  Prahladbhai   through  Her  Power  of Attorney  &  Anr.   [1999 (3) Crimes 252] have held  that  a cheque  must  be presented to the bank on which it is  drawn within  six  months  from the date of issue of  the  cheque. However,  Madras High Court in A.B.K.  Publications Ltd.   & Ors.   v.   Tamil  Nadu Newsprint & Papers Ltd.   [1999  (3) Crimes  97] has taken the view that cheque can be  presented either  in  the payee’s bank or in the drawer bank  and  the date  of  presentation in respective banks will be  reckoned for  calculating  period of six months from the date it  was drawn.  In the present case the High Court of Madhya Pradesh has  endorsed  the view of Madras High Court  and  disagreed with  the  views  of  Punjab and Haryana  and  Gujarat  High Courts.   The  admitted  facts  of the  case  are  that  the appellant issued Cheque No.2477086 dated 21st July, 1997 for Rs.10  lakhs  drawn on the State Bank of Indore,  Industrial Estate  Branch,  Indore  in favour of the  respondent.   The respondent   presented  the  cheque   for  payment  on  26th September,  1997  which was returned unpaid.  Again on  20th January,  1998,  the respondent presented the cheque to  its bank  i.e.   State  Bank  of India at  Raipur.   The  cheque reached  the  drawer bank on 24th January, 1998,  admittedly after  six  months  from the date it  became  payable.   The cheuqe  was returned unpaid by the bank of the respondent on

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3.2.1998.  A notice as required under proviso (b) of Section 138  of  the  Negotiable  Instruments   Act  was  issued  on 10.2.1998  which was received by the appellant on 16.2.1998. A  criminal  complaint under Section 138 of  the  Negotiable Instruments  Act  was  filed  in   the  Court  of   Judicial Magistrate,  First  Class, Raipur against the  appellant  in which  notice was issued for appearing in the court on  23rd September,  1998.   The  appellant filed  Criminal  Revision No.190  of  1998  in  the Court of  Sessions  Judge,  Raipur contending  that  as  the cheque was presented  for  payment beyond  the period of six months as prescribed under Proviso (a)  to Section 138 of the Negotiable Instruments Act,  1881 (hereinafter  referred to as "the Act"), no offence was made out, to be taken cognizance of.  The revision was allowed by the  Sessions Court on 3rd July, 1999.  The respondent filed a  further revision in the High Court which was allowed vide the  order  impugned holding, as noticed earlier,  that  the cheque  can  be presented within the six months  before  the drawer’s  (payee’s)  bank or it can be presented before  the drawer as well as the payee’s bank.  Before adverting to the various  provisions of law as applicable in the case, it has to  be  kept  in mind that the law  relating  to  Negotiable Instruments  is  the law of the commercial world  which  was enacted  to facilitate the activities in trade and  commerce making  provision  of giving sanctity to the instruments  of credit  which  could be deemed to be convertible into  money and  easily  passable  from one person to another.   In  the absence   of  such  instruments,   the  trade  and  commerce activities  were  likely to be adversely affected as it  was not  practicable for the trading community to carry on  with it  the bulk of the currency in force.  The introduction  of negotiable  instruments  owes  its origin to  the  bartering system  prevalent in the primitive society.  The  negotiable instruments  are,  in fact, the instruments of credit  being convertible  on account of the legality of being  negotiated and  thus  easily  passable from one hand to  another.   The source  of  Indian  law  relating  to  such  instruments  is admittedly  the English Common Law.  The main object of  the Act  is  to  legalise  the   system  by  which   instruments contemplated  by  it  could  pass   from  hand  to  hand  by negotiation  like  any other goods.  The purpose of the  Act was to present an orderly and authoritative statement of the leading rules of law relating to the negotiable instruments. The  Act  intends to legalise the system under which  claims upon  mercantile instruments could be equated with  ordinary goods  passing from hand to hand.  To achieve the  objective of  the Act, the Legislature in its wisdom thought it proper to  make provision in the Act for conferring such privileges to  the  mercantile  instruments contemplated under  it  and provide  special procedure in case the obligation under  the instrument was not discharged.  It has, always to be kept in mind  that Section 138 of The Act creates an offence and the law  relating to the penal provisions has to be  interpreted strictly  so that non-one can ingeniously or insidiously  or guilefully  or strategically be prosecuted.  It has  further to  be noticed that to make an offence under 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.  It is the cheque drawn which has  to be  presented  to  "the bank" within  the  period  specified therein.   When a post-dated cheque is written or drawn,  it is  only a bill of exchange.  The post-dated cheque become a cheque  under  the Act on the date which is written  on  the said  cheque  and the six months period has to be  reckoned,

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for  the  purposes of Section 138 of the Act, from the  said date.  Section 138 provides that where any cheque drawn by a person  on an account maintained by him with a ’banker’  for payment of any amount of money to another person from out of that  account for the discharge, in whole or in part, of any debt  or other liability, is returned by "the bank"  unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it  exceeds the amount arranged to be paid from that account by  an  agreement made with that bank, such person shall  be deemed   to  have  committed  an  offence  punishable   with imprisonment as prescribed therein subject to the conditions mentioned  in  clauses  (a),  (b) and (c)  of  the  proviso. Section  3  of the Act defines the "banker" to  include  any person  acting as a banker and any post office saving  bank. Section  72 of the Act provides that a cheque must, in order to charge the drawer, be presented at the bank upon which it is  drawn  before the relations between the drawer  and  his banker has been altered to the prejudice of the drawer.  The use  of the words "a bank" and "the bank" in the Section  is indicator  of the intention of the Legislature.  The  former is  indirect  article and the latter is pre-fixed by  direct article.   If  the  Legislature intended to  have  the  same meanings  for "a bank" and "the bank", there was no cause or occasion  for  mentioning it distinctly and  differently  by using two different articles.  It is worth noticing that the word  "banker"  in Section 3 of the Act is pre-fixed by  the indefinite  article "a" and the word "bank" where the cheque is  intended to be presented under Section 138 is  pre-fixed by  the definite article "the".  The same Section permits  a person  to  issue a cheuqe on an account maintained  by  him with  "a bank" and makes him liable for criminal prosecution if  it is returned by "the bank" unpaid.  The payment of the cheque  is contemplated by "the bank" meaning thereby  where the  person issuing the cheque has an account.  "The" is the word used before nouns, with a specifying of particularising effect  opposed  to the indefinite or generalising force  of "a"  or "an".  It determines what particular thing is meant; that is, what particular thing we are to assume to be meant. "The"  is  always mentioned to denote particular thing or  a person.   "The"  would,  therefore, refer  implicitly  to  a specified  bank and not any bank.  "The bank" referred to in clause  (a)  to the proviso to Section 138 of the Act  would mean  the  drawee-bank on which the cheque is drawn and  not all  banks  where  the cheque is  presented  for  collection including  the bank of the payee, in whose favour the cheque is  issued.   It, however, does not mean that the cheque  is always  to  be presented to the drawer’s bank on  which  the cheque is issued.  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.  In other words a cheque issued by (A) in favour of (B) drawn in a  bank  named  (C) where the drawer has an account  can  be presented  by  the payee to the bank upon which it is  drawn i.e.   (C) bank within a period of six months or present  it to  any  other  bank  for collection of  the  cheque  amount provided  such  other  bank including  the  collecting  bank presents the cheque for collection to the (C) bank.  The non presentation  of  the cheque to the drawee-bank  within  the period  specified  in the Section would absolve  the  person issuing  the cheque of his criminal liability under  Section

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138 of the Act, who shall otherwise may be liable to pay the cheque amount to the payee in a civil action initiated under the  law.   A combined reading of Sections 2, 72 and 138  of 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.  We have perused the judgments of  the Punjab & Haryana, Gujarat and Madras High Courts and their  conflicting  views  and are of the opinion  that  the Madras   High  Court  has   not  correctly  interpreted  the provisions  of law in this behalf.  As, admittedly, in  this case  the cheque was not presented before the drawer’s  bank within  the  statutory  period of six months,  the  criminal court  had no jurisdiction to issue the process against  the appellant.   The  impugned judgment of the High Court  being contrary  to  law  is thus not sustainable.  The  appeal  is accordingly allowed and the impugned judgment is set side.