ANIL KUMAR SAWHNEY versus GULSHAN RAI

Citation: [1993] SUPP. 3 S.C.R. 204 · Decided: 11-10-1993 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

"'. 
A 
B 
c 
ANIL KUMAR SAWHNEY 
v. 
GULSHAN RAJ 
OCTOBER 11, 1993 
[KULDIP SINGH AND YOGESHWAR DAYAL, JJ.] 
Negotiable Instrnments Act, 1881 : Sections 5,6 and 19-Post-dated 
cheque-Nature of--Only a Bill of Exchange till the date shown on its face-
Becomes a cheque only from that date. 
Sections 138(a), 139 and 140 as inserted by the Amending Act, 
1988-Limitation period of six months for presenting the cheque for pay-
ment-To be reckoned from the date shown on the face of the cheque and 
not from the date on which it was made. 
D 
The appellant and respondent were share-holders of a private 
limited company. The company had two groups of share-holders, one led 
by the appellant and the other by the respondent. Disputes arose between 
the two groups which led to the filing of a civil suit. Ultimately the parties 
arrived at a settlement which was recorded in a deed of compromise. 
E Appellant agreed to transfer all the shares of his group to Respondent for 
a total consideration of Rs. 10 lakhs. The payment was to be made by way 
of eight post-dated cheques. 
The suit was disposed of in terms of the settlement. Some of the 
cheques were encashed. Some cheques were returned by the banks with the 
F 
endorsement "not arranged for no funds". The appellant issued notices 
under S.138 of the Negotiable Instruments Act to the Respondent and since 
payment was not forthcoming, he filed complaints before the Chief Judicial 
Magistrate. Summons were issued to the Respondent for appearance in 
the said proceedings. Respondent approached the High Court for quash· 
G Ing the proceedings. A Single Judge of the High Court quashed the 
proceedings· on the short ground that since the cheques were post-dated, 
the provisions of S.138 of the Act were not attracted and as such no offence 
was made out. Aggrieved by the High Court's order, the complainant 
preferred the present appeals. 
H 
Allowing the appeals, this Court 
204 
SHWHNEYv. G. RAI 
205 
HELD: 1. A "cheque" under Section 6 of the Negotiable Instruments A 
Act is also a bill of exchange but it is drawn on a banker and is payable 
on demand. It is thus obvious that a bill of exchange even though drawn 
on a banker, if it is not payable on demand, it is not a cheque. A 
"post-dated cheque" is only a bill of exchange when it is written or drawn; 
it become a "cheque" when it is payable on demand. The post-dated 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. It is clear from 
Section 19 that a "cheque" is an instrument which is payable on demand. 
A post-dated cheque, which is not payable on demand till a particular date, 
B 
is not a cheque in the eyes of law till the date it becomes payable on C 
demand. [212-F -H, 213-A] 
2. When a post-dated cheque is written or drawn it is only a bill of 
exchange and as such the provisions of Section 138(a) are not applicable 
to the said instrument. The post-dated cheque becomes a cheque under the 
Act on the date which is written on the said cheque and the six months D 
period has to be reckoned for the purposes of Section 138(a) from the said 
date. One of the main ingredients of the offence under Section 138 of the 
Act is, the return or the cheque by the bank unpaid. Till the time, the 
cheque is returned by the bank unpaid, no offence under Section 138 is 
made out. A post-dated cheque cannot be presented before the bank and E 
as such the question or its return would not arise. It is only when the 
post-dated cheque becomes a "cheque", with effect from the date shown on 
the face of the said cheque, the provisions of Section 138 come into play. 
With effect from the date shown 'on the race or the said cheque it becomes 
a "cheque" under the Act and the provisions or Section 138(a) would 
squarely be attracted. (213-C-F] 
· 
3. In the instant case, the post-dated cheques were drawn in March 
1990 but they became "cheques" in the year 1991 on the dates shown 
therein. The period of six months, therefore, has to be reckoned from the 
F 
dates mentioned on the face of the cheques. (213-F·G] 
G 
Babu Xavier v. Lalchand Munoth, 1990 TLNJ(Crl.) 121, approved. 
Manoj K Seth v. Fernandez, 1991 2 KLT 65, overruled. 
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal H 
206 
SUPREME COURT REPORTS (1993) SUPP. 3 S.C.R. 
A Nos. 640-42 of 1993. 
From the Judgment and Order dated

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