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November 2011

Dishonour of cheque — Cheque presented after expiry of six months from date of issuance — Complaint not maintainable — Negotiable Instruments Act, S. 138.

By Dr. K. Shivaram, Ajay R. Singh, Advocates
Reading Time 2 mins
[Prabhakar Sinha v. The State of Bihar & Anr., AIR 2011 (NOC) 367 (Pat.)]

The complainant gave Rs.50,000 as friendly loan to the petitioner vide cheque dated 7-9-2004 for an amount of Rs.20,000 drawn on ICICI Bank, Dhanbad Branch and he gave Rs.30,000 in cash to the petitioner. It was further disclosed that the petitioner subsequently on 4-2-2005 issued a cheque of Rs.50,000 dated 4-1-2005 drawn on Bank of Baroda, Patna Branch. However, at the time of handing over the cheque, it was requested by the petitioner to present the same after a fortnight. As appears from the complaint-petition that in the meanwhile the petitioner was kidnapped and he was released after a week and as such the complainant kept the presentation of the cheque in abeyance. Subsequently, the petitioner periodically requested the complainant not to present the cheque. After confirmation given by the petitioner that there was sufficient amount in his account, the cheque was presented in Bank. However, on 16-7-2005, the cheque was returned to the complainant unpaid due to the reason of insufficient funds in account of the petitioner. The complainant again contacted the petitioner, who promised to deposit sufficient amount in his account by 25-7-2005. Accordingly, the complain-ant again produced the cheque on 26-7-2005 for its encashment, but the same again bounced back. The complainant received such intimation on 6-8-2005. The complainant further disclosed that on 25-8- 2005, the complainant got a legal notice issued to the petitioner and despite that the petitioner did not clear the due amount. The learned Sub- Divisional Judicial Magistrate, Patna, by its order dated 19-12- 2005, took cognizance of offence u/s.420 of the Indian Penal Code and section 138 of the Negotiable Instruments Act. The petitioner challenged the said order before the High Court, wherein the Court held that since the cheque itself was presented after expiry of six months from the date of issuance, section 138 of the Negotiable Instruments Act will not attract. The Magistrate committed an error in passing the impugned order of the cognizance moreso when the facts disclosed in the complaint-petition do not make a case for either application of section 420 of the Penal Code or section 138 of the Negotiable Instruments Act. The impugned order of cognizance was therefore quashed.

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