Where a cheque is not presented for payment within a reasonable time of its 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.
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.
The holder of the cheque as to which such drawer or person is so discharged shall be a creditor, in lieu of such drawer or person, of such banker to the extent of such discharge and entitled to recover the amount from him.
Legal Commentary & Landmark Judgments: Section 84
Section 84 regulates the discharge of the drawer when a cheque is not duly presented within a reasonable time and the drawer suffers actual damage through the failure of the drawee bank.
In Section 138 litigation, drawers frequently argue 'the complainant presented the cheque after two months'. Under Section 84, this defence is completely bogus unless the drawer proves that the bank went into RBI liquidation during those two months.