9911796707
TMI Blog2003 (3) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... ques, each for an amount of Rs. 40,000 by way of refund of amount due from him to the appellant. The two cheques subject-matter of the present appeal were dated 10-12-1994 and 10-4-1995. On 12-2-1993 respondent No.1 again wrote to the appellant denying his liability to pay the amount under the aforesaid cheques on the ground that they were issued under a mistaken belief of liability and asked the appellant to treat the cheques as invalid. Respondent No.1 also wrote to the drawee bank on 15-3-1993 to stop payment of the aforesaid post-dated cheques issued by him. On 10-5-1995, the appellant presented the two cheques dated 10-12-1994 and 10-4-1995 for payment but the said cheques were returned unpaid with the endorsement 'present again' on 12-5-1995. On 24-5-1995, the appellant issued notice under section 138B of the Act demanding payment of the amount of Rs. 80,000 i.e. the total amount of the two cheques. On failure of the Respondent No.1 to make the payment in pursuance to the notice, the appellant filed a complaint under section 138 of the Act on 7-7-1995. The concerned Magistrate dismissed the complaint vide order dated 18-10-1999, taking the view that section 138 of the Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y suffer on account of non-payment. The faith, which the legislature has desired that such instruments should inspire in commercial transactions would be completely lost if parties are as a matter of routine allowed to interdict payment by issuing instruction to banks to stop payment of cheques. In today's world where use of cash in day-to-day life is almost getting extinct and people are using negotiable instruments in commercial transactions and plastic money for their daily needs as consumers, it is all the more necessary that people's faith in such instruments should be strengthened rather than weakened. Provisions contained in sections 138 to 142 of the Act are intended to discourage people from not honouring their commitments by way of payment through cheques. It is desirable that the Court should ban in favour of an interpretation which serves the object of the statute. The penal provisions contained in sections 138 to 142 of the Act are intended to ensure that obligations undertaken by issuing cheques as a mode of payment are honoured. A post-dated cheque will lose its credibility and acceptability if its payment can be stopped routinely. A cheque is a well-recognized mode ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the cheques were drawn in March, 1990 when they were written and handed over to the payee. The cheques were post-dated and bore the dates mentioned hereinbefore. Proviso (a) to section 138 uses the words 'the date on which it is drawn'. The cheques were drawn in March, 1990 and were presented for encashment in the year 1991 which was beyond the period of six months provided in proviso (a) to section 138 and therefore, no offence was said to be made out under section 138. Keeping in view the object of section 138 i.e. to enhance the acceptability of cheques by making the drawer liable for penalty in case of cheque is dishonoured, it was felt that drawer of a post-dated cheque could defeat section 138 of the Act by showing a date beyond six months of its delivery. An interpretation which supports the object of the provision had to be adopted. Therefore, it was held that a post-dated cheque for purpose of clause (a) of the provision to section 138 has to be considered to have been drawn on the date it bears. On the basis of sections 5 and 6 of the Act, it was observed that "post-dated cheque is only a bill of exchange when it is written or drawn, it becomes a cheque when it is payab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge, in whole on in part, or any debt or other liability". Thus it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act which is to promote the efficacy of banking operation and to ensure credibility in business transactions through banks persuades us to take a view that by countermanding payment of post-dated cheque, a party should not be allowed to get away from the penal provision of section 138 of the Act. A contrary view would render section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong. If we hold otherwise, by giving instructions to banks to stop payment of a cheque after issuing the same against a debt or liability, a drawer will easily avoid penal consequences under section 138. Once a cheque is issued by a drawer, a presumption under section 139 must follow and merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were no funds in the account to honour the cheque which squarely brings the case within section 138 of the Act. On the question of strict interpretation of penal provisions raised on behalf of the accused it was observed: "If the interpretation, which is sought for, were given, then it would only encourage, dishonest persons to issue cheques and before presentation of the cheques, close the account and thereby escape from the penal consequences of section 138." Any interpretation which withdraws the life and blood of the provision and makes it ineffective and a dead letter, should be averted. It is the duty of the Court to interpret the provision consistent with the legislative intent and purpose so as to suppress the mischief and advance the remedy. The legislative purpose is to permit the efficacy of banking and of ensuring that in commercial or contractual transactions, cheques are not dishonoured and credibility in transacting business through banks is maintained. The Court relied upon its earlier judgment in Modi Cement Ltd.'s case (supra). We would like to quote the following observations contained in NEPC Micon Ltd.'s case (supra). '15. In view of the aforesaid discussion w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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