MADAN GOVARDHANDAS GOENKA Vs. UNION OF INDIA

JUDGEMENT

(1.) HEARD. Perused the records.

(2.) THE petitioner seeks to challenge the proceedings initiated against him under the provisions of Section 138 of the Negotiable Instruments Act, 1881 (hereinafter called as the said Act) as well as the provisions of section 138 of the said Act.

(3.) THE contention that since the Apex Court has ruled that a postdated cheque is a bill of exchange, and therefore no prosecution under section 138 of the said Act can lie is totally devoid of substance. THE Apex Court has in fact held that a postdated cheque continues to be a bill of exchange till the date of the day bearing on the said document and from that day it transforms into a cheque. THE ruling of the Apex Court in that regard in Anil Kumar Sawhney's case is that : " A "postdated cheque" is only a bill of exchange when it is written or drawn, it becomes a cheque when it is payable on demand. THE postdated cheque is not payable till the date which is shown on the face of the said document. It will only become cheque on the date shown on it and prior to that it remains a bill of exchange under Section 5 of the Act. As a bill of exchange a postdated cheque remains negotiable but it will not become a "cheque" till the date when it becomes "payable on demand". " Apparently, therefore, a document which is executed as a postdated cheque will not be an enforceable cheque till the day which is disclosed as the date of the document. Being so, the petitioner would be right in contending that no proceeding under section 138 in relation to such document can be initiated before the date disclosed on such document. In other words, in order to enable the holder of such document to hold the drawer thereof to be responsible and liable for prosecution under section 138, the holder will have to wait till the expiry of the date which is disclosed on the face of the document and the proceedings under section 138 for enforcement of liability under such document can not be initiated prior to the said date.