· THE HON’BLE SRI JUSTICE R. KANTHA RAO + CRIMINAL APPEAL NO. 781 OF 2006 % 17-08-2011 # Kondapalli Meenakesava Reddy .. Appellant-complainant VS. $ Chalasani Rajeswari & Anr. .. Respondents ! Counsel for the appellant : Sri BSV Prakash Kumar ^ Counsel for the Respondent No.1 : N.Satyanarayana for R-1 Counsel for the Respondent No.2 : Addl. Public Prosecutor < Gist : > Head Note : ? CITATIONS : 1) AIR 1957 SC-271 2) 2001 SAR (CRL) 297 SC IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD WEDNESDAY THE SEVENTEENTH DAY OF AUGUST TWO THOUSAND AND ELEVEN PRESENT THE HONOURABLE SRI JUSTICE R. KANTHA RAO CRIMINAL APPEAL NO. 781 OF 2006. Between: Kondapalli Meenakesava Reddy … Appellant-Complainant V/s. 1. Chalasani Rajeswari 2. The State of Andhra Pradesh Represented by its Public Prosecutor, High Court of Andhra Pradesh, Hyderabad. … Respondents Counsel for the Appellant : Sri BSV Prakash Kumar Counsel for the Respondent No.1 : Sri N. Satyanarayana Counsel for the Respondent No.2 : Addl. Publilc Prosecutor The Court made the following : (Judgment follows next page) THE HONOURABLE SRI JUSTICE R. KANTHA RAO CRIMINAL APPEAL No. 781 OF 2006 JUDGMENT : This Criminal Appeal arises out of the judgment dated 21-02-2006 passed in CC.No. 69 of 2005 by the Special Judicial Magistrate of First Class (Excise) FAC Judicial Magistrate of First Class, Special Mobile Magistrate Court, West Godavari district. 2. Heard the learned counsel appearing for the appellant and the learned counsel appearing for the first respondent and the learned Additional Public Prosecutor representing the State. 3. The appellant filed a complaint against the first respondent under section 138 of the Negotiable Instruments Act alleging that the first respondent borrowed from him an amount of Rs.1,50,000-00 on 25-04- 2001 for his family expenses and executed a promissory note in his favour agreeing to repay the same with interest @ 24% per annum. After some time, the matter was settled before the elders and in view of the compromise and in terms thereof the first respondent issued a cheque in favour of the appellant for an amount of Rs.1,50,000-00 on 10-08-2001 towards discharge of the liability and debt due under the promissory note as per the settlement arrived at, for which the parties agreed. 4. The appellant presented the cheque on 05-02-2003 for collection in Andhra Bank, R.R. Pet Eluru and it was returned with endorsement that “the cheque was dishonoured due to insufficient funds” in the account of the first respondent. Thereafter, the appellant issued legal notice dated 25-02- 2003 to the first respondent calling upon her to pay the cheque amount and stating therein that on failure by her, he would be constrained to file a complaint against her. The notice was returned to the counsel of the appellant on 05-02-2003 with endorsement that the addressee was continuously absent for ten days. Thereafter, as the first respondent did not pay the cheque amount, the appellant filed the complaint before the learned Magistrate under section 138 of the Negotiable Instruments Act. 5. Before the learned Magistrate, the appellant examined PWs 1 to 4 and marked Exs.P-1 to P-10. Whereas the first respondent-accused did neither offer to be examined himself nor she examined any witness. However, during the course of examination of PW-1, Exs.D-1 to D6 were marked on her behalf. 6. After the conclusion of trial, ultimately the learned Magistrate acquitted the first respondent-accused mainly on the ground that the cheque was presented beyond the period of six months in the drawer bank i.e., after expiry of the period of validity and that the respondent is not liable for prosecution under section 138 of Negotiable Instruments Act. 7. There was no denial by the first respondent about her signatures on Exs.P-1 and P-2. Ex.P1 is the acknowledgment and Ex.P-2 is the cheque. The first respondent however contended that her husband and the appellant were doing business jointly in Prawn culture and some cheques were obtained in connection with the said business and that she did not issue the said cheque in discharge of any amount borrowed from the appellant. Basing on the said contention, the learned Magistrate had drawn presumption in favour of the appellant under section 118 and 139 of the Negotiable Instruments Act and also considering the fact that no evidence was adduced and no material is placed by the appellant to rebut the said presumption, recorded a finding that the cheque impugned was issued in discharge of legally enforceable debt/liability. 8. The crucial point, which stood for consideration before the learned Magistrate as well as in this appeal is that whether the cheque was issued beyond the period of limitation for presentation in drawer’s bank and whether the first respondent is liable for prosecution under section 138 of the Negotiable Instruments Act. 9. The learned counsel appearing for the appellant would submit that PW-1 presented Ex.P2 cheque in the payee’s bank on 05-02-2003, it was honoured for collection to the drawer’s bank, as per the evidence of PW-2 the drawer’s bank received Ex.P2 cheque on 10-02-2003 and therefore, as per Section 10 of the General Clauses Act, the period of six months expires on 11-02-2003 which was working day of the drawer’s bank and the cheque being reached on 10-02-2003 it is deemed that it was presented within the period of its validity i.e., before expiry of six months. 10. According to the learned counsel, the learned Magistrate overlooked the said fact and erroneously held that the cheque was presented beyond the period of six months and the order of acquittal passed by the learned Magistrate is liable to be set aside in this appeal. 11. On the other hand, the learned counsel appearing for the first respondent would submit that for the purpose of computing six months which is allowed for presenting the cheque, the date on which it was presented in the drawee bank has to be taken into consideration and since the cheque was presented before the drawer’s bank on 09-02- 2003 the cheque was presented beyond the period and therefore, the learned trial court is justified in holding that the first respondent is not liable for prosecution under section 138 of the Negotiable Instruments Act. 12. Before answering the crucial issue raised by the learned counsel on either side, it is necessary to look into the deposition of PW-2, who was working as Branch Manager of drawee bank at relevant time. He stated in his deposition that the first respondent[accused] had SB Account No. 5612 in their bank, their bank received Ex.P-2 for collection from Andhra Bank, R R pet Eluru on 11-02-2003 and after verifying the account of the first respondent, their bank returned Ex.P-2 cheque with Ex.P3 memo stating that “funds insufficient in the account” of the first respondent. He admitted in the cross-examination that their bank received the cheque on 10-02-2003 i.e., beyond the period of six months and it is out-dated cheque. He also stated in the cross-examination that the preceding day on which the cheque was received i.e., 09-02-2003 was a public holiday. According to him, since the cheque was received on 10-02-2003 though is a working day, it is presented for collection beyond the period of its validity. 13. The learned counsel for the appellant relied on a decision reported in (H.H. RAJA) HARINEDER SINGH V/s. S. KARNAIL SINGH AND ORS [1] ,wherein the Supreme Court while referring to Section 10 of the General Clauses Act held as follows: Broadly stated, the object of Section 10 is to enable a person to do what he could have done on a holiday, on the next working day. Where, therefore, a period is prescribed for the performance of an act in a Court or Office, and that period expires on a holiday, then according to the section, the act should be considered to have been done within that period, if it is done on the next day on which the Court or Office is open. For that section to apply, therefore, all that is required is that there should be a period prescribed, and that period should expire on a holiday. 14. On the other hand, the learned counsel for the first respondent in support of his contention would submit that the cheque was presented to the drawee bank after the period of six months from the date on which it is drawn is beyond the period of its validity and relied on a decision in SHRI ISHAR ALLOY STEELS LTD., V/s. JAYASWALS NECO LTD [2]., wherein the Supreme held as follows: Negotiable Instruments Act, 1881, Section 138 – Negotiable Instruments – Section 138 of the Act creates an offence and the law relating to the penal provisions has to be interpreted strictly so that none can ingeniously or insidiously or guilefully or strategically be presented. 10. 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 opinion 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 138 of the Act, who shall other wise 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. 15. Since Section 138 of the Negotiable Instruments Act creates a specific offence, providing punishment, which includes imprisonment as well as fine is a penal provision and it has to be constructed strictly. Section 10 of the General Clauses Act may save the limitation in a civil action. But in so far as the criminal prosecution under section 138 of the Negotiable Instruments Act is concerned, the provision has to be strictly constructed without any exception. The Supreme Court observed that the presentation of the cheque should be made within six months at the bank, on which the cheque is drawn and as could be seen from the Judgment of the Supreme Court it allows no exception. In the instant case, since the cheque was presented for collection before the drawee bank beyond the period of six months and therefore as rightly held by the learned Magistrate the first respondent is not liable for prosecution under section 138 of the Negotiable Instruments Act. 16. For the reasons stated hereinabove, the order of acquittal passed by the learned Magistrate does not call for any interference in this appeal and accordingly the appeal is, therefore, dismissed. __________________________ JUSTICE R. KANTHA RAO. 17-08-2011 I s L @N.B. L.R Copy to be marked. THE HONOURABLE SRI JUSTICE R. KANTHA RAO CRIMINAL APPEAL No. 781 OF 2006 CIRCULATION No. 3 Date:17-08-2011 Court Master : I s L Computer No. 43 [1] ) AIR 1957 SUPREME COURT-271 [2] ) 2001 SAR (CRIMINAL) 297 SUPREME COURT