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Subanamma Ninan & Others v/s George Veeran

Company & Directors' Information:- A V GEORGE AND CO PRIVATE LTD [Active] CIN = U51109KL1937PTC000027

Company & Directors' Information:- A V GEORGE AND CO INDIA PVT LTD [Active] CIN = U74999KL1946PTC001390

    RP. No. 13 of 2020 In RFA. No. 819 of 2010

    Decided On, 18 September 2020

    At, High Court of Kerala


    For the Petitioners: V. Sethunath, Advocate. For the Respondent: Varghese C. Kuriakose, V.V. Shaji, Susanth Shaji, Advocates.

Judgment Text

1. The review petitioners are the appellants in R.F.A.No.810/2010. We heard the counsel appearing on both sides.2. In the appeal, the decree for money in favour of the respondent was confirmed rejecting the plea of appellants that the suit was barred by limitation. It was also held that the relevant article in the Limitation Act, 1963, (for short, 'the Act, 1963') that applied to the suit was not Article 19 as contended by the appellants but the Article 35 of the said Act. We laid down the law that the appropriate Article that applies to a suit instituted on a dishonoured cheque is Article 35 and in that process, we followed an unreported decision in Puthenveettil Malathy & ors. v. Kuttilakandy Balakrishnan (A.S.No.436/02) cited by the learned counsel for the respondent. One of the grounds taken in support of review is that the judgment in Malathy's case had been already recalled by one of us (Justice A.Hariprasad) before the judgment under review was passed and therefore it is an error apparent on the face of the record. The submission made is not disputed by the learned counsel for the respondent. As rightly pointed out to us, when the judgment in Malathy's case was as a matter of fact not in force and could not have been followed, reliance on the recalled judgment, no doubt, is an error apparent on the face of the record which is liable to be corrected in a review proceeding.3. However, after hearing the counsel on either side, we do not find that the error occurred is capable of upsetting our conclusion on the relevance and applicability of Article 35 of the Act, 1963, which we arrived at after detailed discussion and analysis of the relevant provisions of the Act, 1963 and the Negotiable Instruments Act, 1881 (for short, 'the NI Act'). We also notice that judgment in Malathy's case was recalled solely on factual grounds.4. The counsel for the revision petitioners contended, relying on Commissioner of Income tax, Bombay South, Bombay v. Messrs. Ogale Glass Workds Ltd., Ogale Wadi (AIR 1954 SC 429) and Kedar Nath Mitra v. Dinabandhu Saha (1915 ILR (Calcutta) 1043), that a cheque which is dishonoured is a mere waste paper rendering the instrument itself irrelevant and defunct since the liability of the drawer, if any, thereafter rests exclusively on the revived original debt. The argument is to the effect that Article 35 which stipulates the date of cheque as the starting point of period of limitation cannot therefore govern a suit on a dishonoured cheque. On reading the decisions cited, we find that the said contention is not fully correct and the decisions have no bearing on the facts of this case. They were rendered in a different context dehors the provisions of the Act, 1963 and the NI Act, 1881 which were not relevant for the decision of the said cases.5. It is next contended that under no circumstance, the present suit could have been laid on the dishonoured cheques since they were not presented to the Banker within the reasonable time stipulated in Section 84 of the NI Act which is essential for maintaining a suit on a dishonored cheque. In this respect, Ramakannan v. Chettiar & Co. (2007(1) LW(Cri) 527), M/s.Cement Agencies v. V.Vijaya Babu (1997(4) Crimes 273) and K.Rajagopal & anr. v. M.Thiagarajan & ors. [(1999)95 Comp.Cases 286], were cited by the learned counsel for the review petitioners. It is also submitted that in order to lay a suit based on a dishonored cheque, the dates of issue of cheque, the presentation and the dishonour must have been essentially averred in the plaint and despite any of these particulars having not been pleaded, this Court erroneously granted a decree, accepting the suit as validly instituted within time. He also contended that all the five blank cheques issued were materially altered with such dates convenient to the respondent so as to take the suit out of the bar of limitation.6. This argument is also incapable of acceptance since there is a concluded finding on evidence that the cheques were postdated by the drawer himself and no material alterations were ever made by the respondent. There is no valid ground or scope for reconsidering this question in this review petition. It is trite law that a review is not an appeal in disguise.7. It is true that the cheques were presented to the Bank for encashment after passage of hardly seven years, since the date of delivery. As per Section 84(2) of the NI 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. Sections 84 (1) and (2) of the NI Act read as follows ;“84. When cheque not duly presented and drawer damaged thereby.--(1) Where a cheque is not presented for payment within a reasonable time of the issue, and the drawer or person on whose account it is drawn had the right, at the time when presentment ought to have been made, as between himself and the banker, to have the cheque paid and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of the banker to a larger amount than he would have been if such cheque had been paid.(2) In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade and of bankers, and the facts of the particular case.”8. But we do not think that the provision in Section 84(1), contemplating time of issue of cheque as the starting point for determining the reasonable time required for presenting the cheque, can be given effect to without having regard to the Scheme and purpose of Section 138 of the NI Act. It is worth noticing that, after the introduction of the new Chapter XVII which contained Section 138, to the NI Act by the Banking Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, with effect from 1.4.1989, sufficient indication is made in proviso(a) to Section 138, as to the clear period within which a cheque ought to be presented for encashment. The proviso (a) to Section 138 reads as follows;“(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;”The above period of six months was later scaled down to three months with effect from 1.4.2012 by virtue of a notification issued by the Central Government. As per the aforesaid proviso, the stipulated period for presentation is to commence only from the date on which the cheque is drawn. The 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 relevant date which makes a postdated cheque payable is the date which the cheque bears as held by the Honourable Apex Court long back in Anil Kumar Sawhney v. Gulshan Rai [1994 KHC 41 (SC)]. It is therefore imperative that the reasonable period stipulated in Sections 84(1) and (2) of the NI Act shall be read harmoniously with the time prescribed in proviso (a) to Section 138. If so read, 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.9. The legislature cannot be understood to have intended to give effect to the date of issue of cheque in all cases invariably and discard the date of cheque as irrelevant. If the date of delivery of cheque is to determine the period of presentation, distinct from or in preference to the date of the cheque as explained above, it is sure to bring about anomalous situation and defeat the underlying object of the NI Act. Such an interpretation will cause to prevent a drawer from delivering the cheque postdated for a period longer than three months of the date of issue. This, however, does not mean that Sections 84 and 138 come into conflict with each other. 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.10. In this case, the cheques were postdated to 10.12.2017. They became payable only from the dates endorsed therein. Even though the dates of presentation and dishonour were not specifically pleaded, it is clear from the averments made in the plaint that the cheques were presented within the period of two months since they became payable. Thus notwithstanding that the issue of cheques was as early as in 2001, the presentation made in 2007 in accordance with proviso (a) to Section 138 cannot be said to offend Section 84 (2) of NI Act. Thus, the second ground for review also fails.11. We have already made it clear that the

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findings in the judgment under review arrived at by us are based on facts, evidence as well as the provisions of law bearing on the issues on hand. We hold that no valid ground for review has been made out by the petitioners except to the extent that the judgment in Malathy's case was inadvertently followed by us overlooking the fact that it was already recalled by one of us.In the result, the review petition is partly allowed. It is ordered that the following sentence in paragraph 15 of the judgment under review, “One of us (Justice A.Hariprasad) had occasion to hold in an unreported decision in Puthenveettil Malathy & ors. 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.” shall stand deleted. In all other respects, the judgment will remain intact.All pending interlocutory applications are closed.