Consider cheque drawn from date mentioned, not sign: HC

Saurabh Malik

Tribune News Service

Chandigarh, September 3

The Punjab and Haryana High Court has ruled that a cheque has to be considered drawn from the date mentioned in the column on it and not from the date it was signed.

The judgment by Justice Anil Kshetarpal is significant primarily for two reasons. The validity of a cheque is three months from the date it is drawn. The ruling makes it clear that the clock starts ticking from the date mentioned in the column on the cheque and not when it is signed, which can be much earlier in case of a post-dated cheque.

It is also essential in a cheque bounce to establish that bill of exchange is issued for discharge of debt or other liability for initiation of criminal proceedings. Section 138 of the Negotiable Instruments Act makes it clear that a person is deemed to have committed an offence, if the cheque drawn by him for payment to another person for discharge of any debt or other liability is returned by the bank unpaid.

In the case before the Bench, the complainant argued that Rs 13, 88, 725 was due and outstanding against the accused. Two cheques, on presentation, were dishonoured with the remarks “accounts closed”.

The petitioner-drawer tried to argue that the cheque was considered drawn from the date it was signed and not mentioned in the cheque. The dishonoured cheques were undated signed blank cheques delivered to the complainant firm at the time of submitting distribution profile. At that time, there was no legally enforceable debt or other legal liability as these were security cheques.

Justice Kshetarpal made it clear that a person issuing a post dated cheque could not escape criminal proceedings by claiming that there was no legally enforceable debt or other legal liability at the time of issuance, which according to him was the time when the cheque was signed.

Justice Kshetarpal added the date on which the cheque was drawn has to be with reference to the date mentioned in the column and not when it was signed. If the interpretation propounded by petitioner’s counsel was accepted, post dated cheques could not be treated valid. The drawer would stand absolved from criminal prosecution in case the cheques were presented after three months from the date the signatures were appended.