[Negotiable Instruments Act] Ker HC | What determines commencement of period of presentation is date of cheque and not the date of delivery of cheque

Kerala High Court: A Division Bench of A. Hariprasad and T.V. Anilkumar, JJ., while addressing a review petition,  reiterated that the relevant date which makes a postdated cheque payable is the date which the cheque bears.

In the appeal, the money decree in the respondent’s favour was confirmed rejecting the appellant’s plea that the suit was barred by limitation. It was held that the relevant article in the Limitation Act that applied to the suit was not Article 19 but Article 35 of the said Act.

Court had laid down the law that the appropriate Article which applied to the suit instituted on a dishonoured cheque is Article 35 of the Limitation Act, 1963.

It is trite law that a review is not an appeal in disguise.

Bench stated that it is true that the cheques were presented to the Bank for encashment after the passage of hardly seven years, since the date of delivery.

As per Section 84(2) of the Negotiable Instruments Act, the reasonableness of time to be taken for presentation from the date of issue of cheque, shall be determined with due regard to the nature of the instrument, the banking and trade usage and also the facts of each particular case.

In the opinion of the Court, the provision in Section 84(1) of the Negotiable Instruments Act, 1881 contemplating time of issue of the cheque as the starting point for determining the reasonable time required for the presentation of cheque, can be given effect to without having regard to the Scheme and purpose of Section 138 NI Act.

Date on which a cheque is drawn may not be confused with date of issue but must be understood as the date mentioned on the face of the document.

The reasonable period stipulated in Section 84(1) and (2) of the NI Act shall be read harmoniously with the time prescribed in proviso (a) to Section 138 NI Act.

“…what determines the time of commencement of period of presentation is the date of the cheque and not the date of delivery of the cheque.”

Bench further observed that the date of issue of cheque mentioned in Section 84(1) is not irrelevant and capable of rejection in cases where the date of cheque appearing on its face and the date of issue are one and the same.

In the instant case, cheques were postdated and they became payable only from the dates endorsed. Even though the dates of presentation and dishonour were not pleaded, the cheques were presented within the period of 2 months since they became payable.

The review fails in the instant matter as the issue of cheques was as early as in 2001, the presentation made in 2007 in accordance with Section 138(a) cannot be said to offend Section 84(2) of NI Act.

High Court partly allowed the review petition and ordered that the following sentence which was under review shall stand deleted.

“One of us (Justice A.Hariprasad) had occasion to hold in an unreported decision in Puthenveettil Malathy v. Kuttilakandy Balakrishnan [A.S.No.436 of 2002] that Article 35 is the appropriate provision applicable to a suit brought for recovery of money on dishonour of a cheque issued in discharge of liability of the debtor.”

[Subanamma Ninan v. George Veeran, 2020 SCC OnLine Ker 4151, decided on 18-09-2020]

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