ASHOK YESHWANT BADAVE versus SURENDRA MADHAVRAO NIGHOJAKAR AND ANR.

Citation: [2001] 2 S.C.R. 426 · Decided: 14-03-2001 · Supreme Court of India · Bench: K.T. THOMAS · Disposal: Dismissed

Judgment (excerpt)

A 
B 
ASHOK YESHWANTBADAVE 
v. 
SURENDRA MADHAVRAO NIGHOJAKAR AND ANR. 
MARCH 14. 2001 
[K.T. THOMAS, R.P. SETIDAND B.N. AGRAWAL, JJ.] 
Negotiable Instruments Act, 1881-Section !38, p1Vviso (a)-Appellant 
issued a post-dated cheque }Vhiclz H'Os dishonoured 1vithin six 1nonths ftvm the 
date menlioned therein-Ilia/ Court took cognizance and issued process-
C 
Sessions Court did not inteifere with the order and the same was upheld by 
High Court-On appeal Held, a post-dated cheque is a bill of exchange and 
becomes a cheque on the date mentioned therein-In airier to prosecute the 
drawer for an offence, the period of six months has to be reckoned from the 
date mentioned on the cheque-No g1vund made out to quash p1vceedings. 
D 
E 
F 
G 
Words and Phrases-Meaning of "Post-dated cheque" in the context of 
Negotiable Instrument Act, 1881-Sections 5 and 6. 
Appellant had issued a post-dated cheque on 10.11.95 hearing the 
date as 20.1.96 as part of consideration under an agreement to sell ex-
ecuted between the parties. The cheque was presented before expiry of six 
months from 20.1.96 and the same was dishonoured. 
Trial Court took cognizance and issued process against the appellant 
unde Section 138 of the Negotiable Instruments Act, 1881. Sessions.Court 
refused to interfere with the order and the same was upheld by the High 
Court. Hence this appeal. 
Appellant contended that no offence under Section 138 has been 
made out as the cheque was presented after a period of six months from 
the date of issuance of the cheque. 
Dismissing the appeal, the Court 
HELD : 1. The object of Section 138 of the Negotiable Instrument 
Act, 1881 appears to be to inculcate faith in the efficacy of banking opera-
tions and credibility in transacting business of negotiable instruments. 
Despite civil remedy, it intends to prevent dishonesty on the part of the 
H 
drawer of negotiable instruments to draw a cheque without sufficient 
426 
... 
ASHOK YESHWANT BADAVE v. S.M. NIGHOJAKAR 
427 
funds in his account maintained by him in a hank and induces the payee or 
A 
holder in due course to act upon it. [430-F] 
2. The concept of post-dated cheque was well known even in common 
law and it was in effect a bill of exchange payable on demand with a post 
date upon which the demand was to be made. A bare perusal of Sections 5 
& 6 of the Act shows that a bill of exchange is a negotiable instrument in 
writing containing an instruction to a third party to pay a stated sum of 
money at a designated future date or on demand. However, a 'cheque' is a 
bill of exchange drawn on a bank by the holder of an account payable on 
demand. Under Section 6 of the Act a 'cheque' is also a bill of exchange but 
it is drawn on a banker and payable on demand. A bill of exchange 
eventhough drawn on a banker, if it is not payable on demand, it is not a 
cheque. A 'post-dated cheque' is not payable till the date which is shown 
thereon arrives and will become cheque on the said date and prior to that 
date the same remains bill of exchange. [432-C; 436-D-E] 
Jiwanlal Achariya v. Rameshwarlal Agarwal/a, AIR (1967) SC 1118, 
relied on. 
Da Silva v. Fuller. Sel. Ca, 238 M.S.; Emannel v. Robarts, [1868] 9 B & 
S 121; Bullv. O'Sullivan LR., 6 Q.B. 209; Gatty v. Fry, 2Ex.D. 265; Palmer, 
[1882] 19 Chancery Division 409; Hinchcliffe v. The Ballarat Banking Com-
pany I. V.R. (L) 229; Royal Bank of Scotland v. Tottenham, (1894) LXX 1 Law 
limes Report 168; Pollock v. Bank of New Zealand, [1902] XX New Zealand 
Law Reports 174; Aylmer M. Keyes v. The Royal Bank of Canada, [1947] 
SCR 377; Brien v. Dwyer & Anr., [1979] 53 Australian Law Journal Reports 
123, referred to. 
Halsbury's Laws of England 4th Ed. (Reissue) Vol. 3(1) at p. 143; 
Chalmers & Guest on Bills of Exchange, Cheq11es and Promissory Notes, 15th 
Ed. At p. 74; The Law and Practice Relating to Banking, F.E. Perry at pages 
137 & 138; Thomsons Dictionary of Banking 12th Ed. at p. 463, referred to. 
3. For prosecuting a person ror an offence under Section 138 of the 
Act, it is inevitable that the cheque is presented to the hanker within a 
period of six months from the date on which it is drawn or within the 
period of its validity whichever is earlier. When a post dated cheque is 
written or drawn, it is only a bill of exchange and so long the same remains 
a bill of exchange, the provisions of Section 138 do not apply to the said 
B 
c 
D 
E 
F 
G 
H 
428 
SUPREME COURT REPORTS 
[2001] 2 S.C.R. 
A 
instrument

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