The Supreme Court dismissed a PIL, which sought to exclude the time period of the lockdown for calculating the limitation period of the Demand drafts and cheques. The Bench said that it is a policy decision. The Reserve Bank of India will take this decision, and the Court cannot issue any direction in this. The Writ petition under article 32 of the Constitution was dismissed. The Petitioner Harsh Nitin Gokhle refereed to a recent Supreme Court order in a Suo Moto writ petition WP-3/2020, in which period of limitation was extended for filing of the proceedings. It was applicable to the Arbitration and Conciliation Act, Negotiable Instruments Act, and sought to relax the limitation period for presenting the banking instruments.
This was done during period of the lockdown. All those instruments were included, which were required to be presented before three months. The RBI directed on November 4, 2011, that the banking instruments should be encashed within three months from the date of issuance. The petitioner contended that the people were not able to encash the instruments because of the COVID-19 pandemic lockdown. The plea stated that the instrument would have become stale. The drawer would lose the right to get it encashed. The valuable rights of the drawer against the drawee would be lost.
The petitioner further stated that it would be considered as the negligence of the drawer to not present the banking instrument for the encashment. The suffering can be eased, if the limitation period of the banking instruments is relaxed for the period of the lockdown. The High Court also sought response from the RBI in a similar case. A similar plea was filed for an extension of clearing banking instruments during the limitation period. The High Court observed that the situation of a cheque becoming stale in the lockdown due to banks’ inability is unfortunate.