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Free Counter 09 May, 2009 Dishonour of Cheque in India Contributed by Deepak Miglani A great hardship is caused to a person if a cheque issued in his favour is dishonoured due to the insufficiency of funds in the account of the drawer of the cheque. To discourage dishonour Cheque Bouncing is made punishable as offence under Negotiable Instrument Act. The drawer can be awarded two years of imprisonment and fine may extend to twice the amount of the cheque or both. These are the following essentials of Section 138 for making the dishonour of cheque a offence:- Cheque should have been issued for the discharge , in whole or part, of any debt or other liability. The cheque should have been presented within period of six months or within period of its validity, whichever is earlier. Note:- Cheque may be presented any number of times for collection with in its validity. The payee or the holder in due course should have issued a notice in writing to the drawer with in thirty days of the receipt of information by him from the bank regarding the return of cheque as unpaid. After the receipt of the said notice by the payee or the holder in due course, the drawer should have failed to pay the cheque amount with in fifteen days of the receipt of the said notice. Note:- Notice of dishonour is unnecessary when the party entitled a notice cannot after due search be found(Sec.98). On non-payment of the amount due on dishonoured cheque within fifteen days of the receipt of notice by the drawer, the complaint should have been filed with in one month from the date of expiry of grace time of fifteen days, before a Metropolitan Magistrate or not below the rank of a Judicial Magistrate of the First Class. The cognizance of a complaint may be taken by the court after the prescribed period, if the complaint satisfies the court that he had sufficient case for not making complaint within such period.
Transcript of Free Counter01
Free Counter
09 May, 2009
Dishonour of Cheque in India
Contributed by Deepak Miglani
A great hardship is caused to a person if a cheque issued in his favour is dishonoured due to the insufficiency of funds in the account of the drawer of the cheque. To discourage dishonour Cheque Bouncing is made punishable as offence under Negotiable Instrument Act. The drawer can be awarded two years of imprisonment and fine may extend to twice the amount of the cheque or both. These are the following essentials of Section 138 for making the dishonour of cheque a offence:-
Cheque should have been issued for the discharge , in whole or part, of any debt or other liability.
The cheque should have been presented within period of six months or within period of its validity, whichever is earlier.
Note:- Cheque may be presented any number of times for collection with in its validity.
The payee or the holder in due course should have issued a notice in writing to the drawer with in thirty days of the receipt of information by him from the bank regarding the return of cheque as unpaid.
After the receipt of the said notice by the payee or the holder in due course, the drawer should have failed to pay the cheque amount with in fifteen days of the receipt of the said notice.
Note:- Notice of dishonour is unnecessary when the party entitled a notice cannot after due search be found(Sec.98).
On non-payment of the amount due on dishonoured cheque within fifteen days of the receipt of notice by the drawer, the complaint should have been filed with in one month from the date of expiry of grace time of fifteen days, before a Metropolitan Magistrate or not below the rank of a Judicial Magistrate of the First Class. The cognizance of a complaint may be taken by the court after the prescribed period, if the complaint satisfies the court that he had sufficient case for not making complaint within such period.
The Offence under this act is compoundable.
Cheque may be presented again and again: A cheque may be presented any number of times during the period of validity. The cause of action, however, only once. The cause of action arises, after the issue of statutory notice and non-compliance with demand.
Dishonour with remarks “Account Closed”, “Refer to the drawer” or “Stop payment” instructions: Dishonour due to insufficiency of funds has to be interpreted liberally. Dishonour due to remarks “Account closed”, “Refer to the drawer” or “Stop payment” of the cheque may be deemed to be covered by the provision contained in Section 138.
Stopping payment of a cheque: Dishonestly stopping payment of the cheque, and then failing to pay the amount within 15 days after due notice from the payee amounts to an offence within the meaning of Section 138.
2007 case law
Negotiable Instruments Act, 1881, S.138 - Company - Complaint against company and its Directors - Directors signing the cheque - They cannot escape their liability on the ground that they resigned after signing the cheque but before the cheques were deposited in the bank. (M/s.Sumida International Pvt. Ltd. & Ors. Vs M/s.Rama Vision Limited) 2007(4) Criminal Court Cases 494 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Company - Dishonour of cheque - Company Secretary filing complaint on behalf of company - Specific authorisation for filing each case is not required when there is general authorisation to an officer of the Board of Directors. (M/s.Sumida International Pvt. Ltd. & Ors. Vs M/s.Rama Vision Limited) 2007(4) Criminal Court Cases 494 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Company - Dishonour of cheque - Complaint by power of attorney holder - Even if initially there was no authority, still the Company can, at any stage, rectify that defect - At a subsequent stage, the company can send a person who is competent to represent the company. (M/s Voltas Ltd. Vs M/s Vidharbha Vehicles Pvt. Ltd.) 2007(4) Civil Court Cases 519 (A.P.) : 2007(4) Criminal Court Cases 689 (A.P.)
Negotiable Instruments Act, 1881, S.138 - Company - Dishonour of cheque - Complaint by power of attorney holder - Particular person, whose statement was taken on oath, at the first instance is not required to represent the company till the end of the proceedings - There can be occasions when different person can represent the company - It is open to the company to seek permission of the Court for sending any other person to represent the company in the Court. (M/s Voltas Ltd. Vs M/s Vidharbha Vehicles Pvt. Ltd.) 2007(4) Civil Court Cases 519 (A.P.) : 2007(4) Criminal Court Cases 689 (A.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonor of cheque - Company - Director resigned prior to issuance of cheque - No counter credential projected by complainant - Petitioner cannot be fastened with criminal liability under S.138 of the N.I. Act. (Lachhman P.Udhani & Ors. Vs M/s.Redington (India) Ltd.) 2007(1) Criminal Court Cases 956 (Madras) : 2007(2) Civil Court Cases 135 (Madras)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - - Cheque drawn for discharge of time-barred liability - Dishonour of cheque will fall within the sweep of S.138 of the Act. (Ramakrishnan Vs Gangadharan Nair & Anr.) 2007(3) Civil Court Cases 713 (Kerala) : 2007(3) Criminal Court Cases 459 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Account closed - Complaint is maintainable. (A.K.Chaudhary & Ors. Vs Nandita Malhotra) 2007(4) Criminal Court Cases 593 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Accused transacting business on behalf of company on commission basis - Accused purchasing potatoes from complainant on behalf of company - Accused issued cheque in discharge of debt of company - Held, accused is validly prosecution - Conviction upheld. (J.Ramaraj Vs IIiyaz Khan) 2007(2) Civil Court Cases 458 (Karnataka) : 2007(2) Criminal Court Cases 726 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Advancing loan of a huge amount of Rs.3.16 lakhs - Complainant himself used to borrow money from his brothers, father and others - Complainant failed to show that he had any financial capacity to advance such a huge amount - Accused acquitted. (K.Prakashan Vs P.K.Surenderan) 2007(3) Apex Court Judgments 429 (S.C.) : 2007(4) Civil Court Cases 713 (S.C.) : 2007(4) Criminal Court Cases 371 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Bank endorsement "Account expires" - Amounts to dishonour of cheque - Provision of S.138 of the Act is attracted. (M/s Voltas Ltd. Vs M/s Vidharbha Vehicles Pvt. Ltd.) 2007(4) Civil Court Cases 519 (A.P.) : 2007(4) Criminal Court Cases 689 (A.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Blank cheque - Cheque issued as security for transaction between the parties - When blank cheque is issued by one to another, it gives an authority to the person, to whom it is issued, to fill it up at the appropriate stage with the necessary entries regarding the liability and to present it to Bank - On dishonour of cheque accused is not absolved of the liability. (Moideen Vs Johny) 2007(1) Civil Court Cases 220 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Blank cheque - Cheque issued for cost of goods to be supplied by drawee - Bank account closed after issuance of cheque - Cheque presented to bank for realisation and same dishonoured - No criminal liability for the reasons that (i) cheque when issued was blank; (ii) Cheque when presented for payment, was time barred as it was presented for payment after expiry of six months reckoned from date on which it was issued in blank; (iii) cheque when issued was not towards any existing debt or liability - Order of trial Court acquitting accused calls for no interference. (Vishnudas Vs Vijaya Mahantesh) 2007(2) Criminal Court Cases 865 (Karnataka) : 2007(3) Civil Court Cases 276 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Blank cheque theory - Cheque signed by drawer - Cheque filled up by some other person putting the date and amount - Drawer cannot get absolved of the liability u/s 138 of the Act. (T.N.Unnikrishnan Vs T.K.Ramankutty & Anr.) 2007(2) Civil Court Cases 655 (Kerala) : 2007(2) Criminal Court Cases 897 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cause of action - Defective notice - Name of bank incorrectly mentioned - It is a defective notice - Cheque again presented and again dishonoured - Prosecution launched on the basis of dishonour of cheque for the second time - Held, cause of action begins to run not on the issuance of a defective notice but it started to run on issuance of notice on dishonour of cheque for the second time. (Aniyan Thomas Chacko Vs The Varvelil Bankers & Anr.) 2007(1) Civil Court Cases 262 (Kerala) : 2007(1) Criminal Court Cases 236 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Change in date - It is for the complainant to prove that change in the date was made with the consent of accused. (Fragrant Leasing & Finance Company Ltd. Vs Jagdish Katuria & Anr.) 2007(3) Criminal Court Cases 840 (Allahabad) : 2007(4) Civil Court Cases 281 (Allahabad)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Change of date without authorisation - Material alteration - Accused in his statement u/s 313 Cr.P.C. merely stated that he gave the cheques but it no where speaks about the change in dates - Held, complainant cannot get any benefit of statement of accused u/s 313 Cr.P.C. (Fragrant Leasing & Finance Company Ltd. Vs Jagdish Katuria & Anr.) 2007(3) Criminal Court Cases 840 (Allahabad) : 2007(4) Civil Court Cases 281 (Allahabad)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque issued as security for repayment of debt - It is a negotiable instrument - Dishonour of cheque - Drawer of cheque incurs liability of prosecution under S.138 of the Act. (S.T.P. Limited, Bangalore Vs Usha Paints & Decorators, Bangalore & Anr.) 2007(1) Civil Court Cases 335 (Karnataka) : 2007(1) Criminal Court Cases 614 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque issued as security for repayment of loan - Cheque continues to be one issued for the discharge of liability as contemplated u/s 138 of the Act. (K.P.Rathikumar Vs N.K.Santhamma & Anr.) 2007(4) Civil Court Cases 546 (Kerala) : 2007(4) Criminal Court Cases 343 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque issued as security for repayment of loan - Cheque will continue to be one issued for discharge of liability as contemplated under S.138 of the Act. (Rathikumar Vs Santhamma) 2007(1) Civil Court Cases 024 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque issued for discharge of a time barred debt - Held, such a cheque is within the sweep of S.138 Negotiable Instruments Act. (P.N.Gopinathan Vs Sivadasan & Anr.) 2007(1) Civil Court Cases 729 (Kerala) : 2007(1) Criminal Court Cases 1077 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque issued in respect of uncertain future liabilities - Dishonour of such cheque does not attract prosecution u/s 138 of the Act. (M/s Sathavahana Ispat Ltd. Vs Umesh Sharma) 2007(2) Civil Court Cases 499 (Karnataka) : 2007(2) Criminal Court Cases 333 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque issued to discharge promissory note - Material alterations in promissory note and request for sending pronote for expert examination - Plea taken for the first time at appellate stage - Not permissible. (S.P.Muthu Vs Kirupakaran) 2007(4) Civil Court Cases 382 (Madras) : 2007(4) Criminal Court Cases 635 (Madras)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque issued towards repayment of loan - Money lender - Not possible to lend money without any document - Date of lending money not mentioned in complaint and notice - Ledger extract or any letter sanctioning loan amount or pronote to show sanction of loan not produced - Presumption u/s 139 is not available - Defence version is probabilised that cheque was issued by way of security for loan given by complainant to his brother and his brother is already convicted and present proceedings instituted by him to realise amount once again from surety is not maintainable - Accused acquitted. (M.Senguttuvan Vs Mahadevaswamy) 2007(3) Civil Court Cases 687 (Karnataka) : 2007(3) Criminal Court Cases 337 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque issued towards time barred debt - Accused cannot be convicted u/s 138 of the Act. (Zaheeda Kazi Vs Mrs.Sharina Ashraff Khan) 2007(3) Civil Court Cases 163 (Bombay) : 2007(3) Criminal Court Cases 069 (Bombay) : 2007(4) Criminal Court Cases 733 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque not issued for a debt or liability - Burden of proof is on the accused. (Shanaz D'Souza Vs Sheikh Ameer Saheeb & Anr.) 2007(2) Criminal Court Cases 1029 (Bombay) : 2007(3) Civil Court Cases 131 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque not presented in Bank for encashment within six months from the date on which it was drawn - No offence u/s 138 of the Act is made out. (Geeta Vs State of U.P. & Anr.) 2007(3) Civil Court Cases 810 (Allahabad) : 2007(3) Criminal Court Cases 540 (Allahabad)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Cheque returned with bank endorsement 'present again' - Despite notice payment not made - Held, reasons for dishonour of cheque are wholly irrelevant - If despite notice amount remains unpaid then drawer of cheque is responsible u/s 138 of the Act. (Yogendra Kumar Gupta Vs Ram Prakash Agrawal) 2007(3) Criminal Court Cases 272 (M.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Closure of account - Account was closed even on date of issue of cheque - Account was closed not by accused but by Bank in accordance with rules governing current account - Held, accused is not liable when he had no notice of closure of account. (Nagaraja Upadhya Vs M.Sanjeevan) 2007(4) Civil Court Cases 387 (Karnataka) : 2007(4) Criminal Court Cases 167 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - An employee filed complaint on behalf of company - Letter authorising employee to file complaint not filed - Though this is a curable defect but same not removed even during trial - Held, complaint not maintainable for want of authority letter. (Fragrant Leasing & Finance Company Ltd. Vs Jagdish Katuria & Anr.) 2007(3) Criminal Court Cases 840 (Allahabad) : 2007(4) Civil Court Cases 281 (Allahabad)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Chairman or Director - Pleading - There must be an averment that the person who is vicariously liable for commission of the offence of the Company both was incharge of and was responsible for the conduct of the business of the Company - Such requirement must be read conjointly and not disjunctively. (Everest Advertising Pvt.Ltd. Vs State, Govt. of NCT of Delhi & Ors.) 2007(2) Apex Court Judgments 191 (S.C.) : 2007(2) Civil Court Cases 708 (S.C.) : 2007(2) Criminal Court Cases 791 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Complaint by Director of Company on behalf of company - Documentary evidence not filed to show that he is Director of Company and has been authorised by the Company to file and depose on behalf of the company - Dismissal of complaint - Held, justified. (Director, Maruti Feeds & Farms Private Limited, Dharwad Vs Basanna Pattekar) 2007(4) Civil Court Cases 385 (Karnataka) : 2007(4) Criminal Court Cases 012 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Complaint filed through power of attorney holder - Authority letter or power of attorney whereby attorney was authorised to file complaint on behalf of company not filed - Complaint, held, rightly dismissed. (Lakshmi Srinivas Savings & Chit Funds Syndicate Pvt. Ltd. Vs S.Bhojarajan) 2007(2) Civil Court Cases 803 (Madras) : 2007(2) Criminal Court Cases 562 (Madras)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Director - Tendered his resignation prior to issuance of cheque - Not liable for the offence committed by company - Order of issuance of process against Director quashed and set aside. (Amit Mohan Inder Mohan Sharma Vs M/s.Mamta Agency & Ors.) 2007(2) Criminal Court Cases 805 (Bombay) : 2007(3) Civil Court Cases 089 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Director - Vicarious liability - Director who negotiated for obtaining financial assistance on behalf of the Company cannot be held
vicariously liable - It does not give rise to an inference that he was responsible for day-to-day affairs of the company - Vicarious liability on the part of a person must be pleaded and proved - It cannot be a subject matter of mere inference. (K.Srikanth Singh Vs M/s North East Securities Ltd. & Ors.) 2007(3) Apex Court Judgments 024 (S.C.) : 2007(3) Civil Court Cases 525 (S.C.) : 2007(3) Criminal Court Cases 850 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Director - Vicarious liability - It must be pleaded that accused was responsible to the Company for the conduct of the business of the Company. (K.Srikanth Singh Vs M/s North East Securities Ltd. & Ors.) 2007(3) Apex Court Judgments 024 (S.C.) : 2007(3) Civil Court Cases 525 (S.C.) : 2007(3) Criminal Court Cases 850 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Director - Vicarious liability - Must be pleaded and proved - It cannot be a subject matter of mere inference. (K.Srikanth Singh Vs M/s North East Securities Ltd. & Ors.) 2007(3) Apex Court Judgments 024 (S.C.) : 2007(3) Civil Court Cases 525 (S.C.) : 2007(3) Criminal Court Cases 850 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Directors - Pleading - As a result of fall out of non payment negotiations were held between parties wherein Respondent Nos.2 and 3 took part - Held, there is no doubt that ingredients of S.141 of the Act stand satisfied. (Everest Advertising Pvt.Ltd. Vs State, Govt. of NCT of Delhi & Ors.) 2007(2) Apex Court Judgments 191 (S.C.) : 2007(2) Civil Court Cases 708 (S.C.) : 2007(2) Criminal Court Cases 791 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Manager filed complaint - Manager not duly authorized by Board of Directors to sign and file the complaint - Not a ground for quashing the complaint. (Bhasin Credit Aid Ltd. Vs Raj Kumar) 2007(2) Civil Court Cases 607 (Delhi) : 2007(2) Criminal Court Cases 502 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Prosecution of Chairman and Director of Company - Concurrent finding of Trial Court and First Appellate Court that accused were in charge of and were responsible to company for conduct of its business - Such finding needs no interference in revision. (S.Parameshwarappa & Anr. Vs S.Choodappa) 2007(2) Civil Court Cases 763 (Karnataka) : 2007(2) Criminal Court Cases 592 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Company - Winding up orders of company passed and official liquidator appointed - Complaint against Directors of Company in respect of cheques presented and dishonoured after winding up orders are passed is not maintainable. (Ratan Lal Garera & Ors. Vs State (NCT of Delhi) & Anr.) 2007(2) Civil Court Cases 318 (Delhi) : 2007(2) Criminal Court Cases 277 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Compensation - By imposing the sentence of imprisonment alone complainant cannot recover the money from accused - Accused directed to pay compensation equal to that of cheque amount. (Selvaraj Vs N.Jeyaraman) 2007(1) Civil Court Cases 646 (Madras) : 2007(1) Criminal Court Cases 869 (Madras)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complainant is at liberty to file a suit for recovery of the amount as well as a complaint for bouncing of the cheques. (Smt.Mymoona Vs H.M.Trading Company, Mangalore & Anr.) 2007(4) Civil Court Cases 688 .(Karnataka) : 2007(4) Criminal Court Cases 910 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint - Delay - Application for condonation of delay not filed alongwith complaint - It is a curable defect - Complainant directed to file affidavit setting out reasons for delay in filing complaint and trial Court directed to provide opportunity to accused to raise their defence - If Court is satisfied that there are adequate and cogent reasons to condone delay, then same to be decided on merits. (R.Kanthimathi & Ors. Vs Bank of India ) 2007(4) Civil Court Cases 330 (Madras) : 2007(4) Criminal Court Cases 403 (Madras)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint - Dismissed in default for single instance of non appearance of complainant - Complaint ordered to be restored to be decided on merits. (Print Links (India) & Anr. Vs M/s.Kiran Paper Convertors & Merchants & Ors.) 2007(4) Civil Court Cases 711 (P&H) : 2007(4) Criminal Court Cases 695 (P&H)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint - During pendency of complaint Court allowed the son of complainant, his general power of attorney holder, to continue the proceedings - No ground to quash the proceedings. (Bodapati Naga Krishna Gandhi Vs Sri Ilapakurthi Sri Ramulu & Anr.) 2007(4) Civil Court Cases 147 (A.P.) : 2007(4) Criminal Court Cases 271 (A.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint - Filed within two days of refusal to receive notice - Complaint is premature. (M/s. Sarav Investment & Financial Consultants Pvt. Ltd. & Anr. Vs Llyods Register of Shipping Indian Office Staff Provident Fund & Anr. ) 2007(4) Criminal Court Cases 527 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint - Forms part of the record and it need not be marked and non marking is not fatal to the complainant's case. (Jayamma Vs Lingamma) 2007(3) Civil Court Cases 466 (Karnataka) : 2007(3) Criminal Court Cases 287 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint - Quashing of - Non supply of goods for which cheque was issued - Not a ground to quash complaint - It is a matter of fact
which has to be proved before a Court of law. (M/s.Shirdi Overseas Imports & Exports & Anr. Vs M/s.Serve Overseas & Anr.) 2007(2) Civil Court Cases 638 (P&H) : 2007(2) Criminal Court Cases 1057 (P&H)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint by power of attorney holder - Failure to produce power of attorney authorising to lodge complaint and to give sworn statement on behalf of his principal - Dismissal of complaint for want of proof of power of attorney justified. (Ranjitha Balasubramanian & Anr. Vs Shanthi Group, Bangalore & Ors.) 2007(2) Civil Court Cases 362 (Karnataka) : 2007(2) Criminal Court Cases 475 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint by power of attorney holder - If transactions are witnessed by power of attorney or he has full knowledge of the transactions, his statement can be recorded by Magistrate for verification of the complaint. (Shanaz D'Souza Vs Sheikh Ameer Saheeb & Anr.) 2007(2) Criminal Court Cases 1029 (Bombay) : 2007(3) Civil Court Cases 131 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint filed - Regarding same very cheques FIR lodged u/ss 420, 406 IPC - FIR quashed. (Indian Penal Code, 1860, Ss.420, 406). (Harinderpal Singh Vs State of Punjab) 2007(4) Civil Court Cases 637 (P&H) : 2007(4) Criminal Court Cases 976 (P&H)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint filed by husband on behalf of wife on the basis of authority letter - Husband neither a general nor special power of attorney holder - In the authority letter it was no where undertaken that the executant would be bound by the acts done and conducted on her behalf in respect of the cheque - Held, complainant not competent to institute the complaint - Complaint quashed. (O.P.Mehra Vs Raj Kumari Bhalla & Anr.) 2007(1) Criminal Court Cases 847 (P&H) : 2007(2) Civil Court Cases 181 (P&H)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint through power of attorney holder - Power of attorney - If not filed at initial stage can be filed even at a later stage when validity of the same is questioned and Court then has to decide the genuineness or the validity of the same. (K.Gopalakrishnan Vs Karunakarann rep.by the Power of Attorney Holder) 2007(2) Civil Court Cases 559 (Madras) (DB) : 2007(2) Criminal Court Cases 683 (Madras) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Complaint under section 138 of the Act - Cheque alleged to be forged before filing complaint - Accused lodged complaint under sections 464, 468, 389, 420 r/w section 511 IPC - Bar under S.195(1)(b)(ii) is not applicable - In the interest of justice both matters ordered to be heard and disposed by same Court together and at the same time. (Ramanand Vs Kailasnath & Anr.) 2007(1) Civil Court Cases 658 (Bombay) : 2007(1) Criminal Court Cases 509 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Consideration - Drawer of cheque regular customer and purchasing goods on credit - Drawer admitting balance amount shown as due in running account, as true and correct - Dismissal of complaint on ground of non production of invoices relating to sales of goods held, not proper - Accused liable to conviction. (Ganesh Enterprises, Bangalore Vs D.R.Sarala) 2007(2) Civil Court Cases 779 (Karnataka) : 2007(2) Criminal Court Cases 524 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Conviction - Default sentence - Accused to undergo two months SI on failure to pay compensation amount within two months - Such default sentence shall lapse at any time when the payment is made either before or after the default sentence starts running. (K.G.Girish Kumar Vs M/s Muthoot Capital Service Pvt.Ltd. & Anr.) 2007(2) Civil Court Cases 385 (Kerala) : 2007(2) Criminal Court Cases 704 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Conviction - Plea that there was no legal liability on the part of accused to make payment towards goods delivered because of exaggerated bills - Plea not taken as a part of defence through cross examination - In reply to notice no such plea raised - Conviction not liable to be interfered with. (S.N.Dabholkar Vs Duroplus India Pvt.Ltd. & Anr.) 2007(3) Criminal Court Cases 542 (Calcutta)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Conviction - Sentence of simple imprisonment and fine - Appeal against - Appeal/Revision cannot be dismissed for non deposit of amount of fine. (Vijay D.Salvi Vs State of Maharashtra & Ors.) 2007(3) Apex Court Judgments 248 (S.C.) : 2007(4) Civil Court Cases 164 (S.C.) : 2007(4) Criminal Court Cases 298 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Court to carry out proper verification before issuing process - Verifications required are : (1) Verification of a complaint on oath which should be in a proper manner i.e. all the facts necessary to constitute the offence must be borne out from the verification; (2) If Company then person representing the Company should be duly authorised; (3) Complete postal addresses of complainant and accused; (4) Statement of the complainant that all the accused persons named in the complaint are Directors/Partners and that they are liable under the Act and to verify the status of accused and the extent of involvement in the commission of offence; (5) That the accused is the signatory to the instrument in question; (6) Fact of issuance of statutory notice and Court should insist for some formal proof in the form of acknowledgement receipt etc.; (7) Whether the concerned Firm/Company, Society/Institution, Partner/Director or Proprietor are joined as parties or not; (8) Whether the complaint has been filed within the period of limitation as prescribed under S.138 of the Act; (9) Whether there are any specific allegations against each accused or not. (Dr.Rajan Sanatkumar Joshi Vs Rajnikant Govindlal Shah & Anr.) 2007(3) Criminal Court Cases 577 (Gujarat)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Delay of 3 days in filing complaint- Condonation - Delay can be condoned only on issuance of notice to accused. (Sajjan Kumar Jhunjhunwala & Ors. Vs M/s.Eastern Roadways Pvt.Ltd.) 2007(2) Civil Court Cases 812 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Director - Resigned before issuance of cheque in question - No averment in complaint as to how and in what manner petitioner was responsible for conduct of business of company or otherwise responsible to it in regard to its functioning - Complaint against petitioner quashed. (Dr.Rajan Sanatkumar Joshi Vs Rajnikant Govindlal Shah & Anr.) 2007(3) Criminal Court Cases 577 (Gujarat)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Discharge of liability - Cheque issued for settlement of trade liabilities - Forms valid consideration - Dishonour of cheque justifies penal action u/s 138 of the Act. (Sree Sakthi Paper Mills Ltd. Vs Anjaneya Enterprises) 2007(4) Criminal Court Cases 660 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Endorsement on cheque 'sans recourse' - Contention that cheque itself speaks that payee will not have recourse to file the complaint, taking cognizance is barred - Held, when once cheque is dishonoured, the endorsement on the cheque made by accused without knowledge of the complainant and in absence of mentioning the said fact in reply notice given by accused, the prosecution cannot be quashed exonerating the accused from the liability u/s 138 of the Act. (Maganti Ganta Avadhani Vs Kopuri Sreenivasa Rao) 2007(4) Civil Court Cases 034 (A.P.) : 2007(4) Criminal Court Cases 294 (A.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Extension of date of cheque - When a drawer revalidates cheque from time to time, which is permissible, then on each occasion there is a fresh promise as envisaged by S.25 of Contract Act as well as an acknowledgment within the meaning of S.18 of Limitation Act if such revalidation is made within the period of limitation - Held, liability is legally enforceable liability. (Vijay Ganesh Gondhlekar Vs Indranil Jairaj Damale) 2007(4) Civil Court Cases 647 (Bombay) : 2007(4) Criminal Court Cases 957 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Fine/or compensation - Power of court to impose fine may or may not be limited but power to award compensation is not - Consideration for payment of compensation is somewhat different from payment of fine. (P.Suresh Kumar Vs R.Shankar) 2007(2) Apex Court Judgments 140 (S.C.) : 2007(2) Civil Court Cases 84 (S.C.) : 2007(2) Criminal Court Cases 082 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Firm - Cheque issued in name of firm but complaint filed by a firm different from the one in whose name cheque was issued - Notice issued by firm which was different from the one in whose name cheque was issued - Notice issued in itself defective - Entire proceedings vitiated on this ground alone. (Lakshmi Srinivas Savings & Chit Funds
Syndicate Pvt. Ltd. Vs S.Bhojarajan) 2007(2) Civil Court Cases 803 (Madras) : 2007(2) Criminal Court Cases 562 (Madras)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - For invoking criminal liability under S.138 of the Act, cheque is required to be presented to the drawee bank or the payee bank within the period of six months from the date of its issue. (Shrikant Chavan Vs Hotel the Vaishno Devi) 2007(2) Civil Court Cases 368 (J&K) : 2007(2) Criminal Court Cases 009 (J&K)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Holder in due course - Partnership business dissolved - Cheque of Rs.40,000/- entrusted to brother of complainant - Agreement reduced to writing - Cheque drawn and handed over to brother of complainant could not have been made use of by the complainant, unless the complainant has a case that accused did not honour the agreement and that consequent on that his brother had handed over the cheque and thus he became a holder in due course - Transaction relating to cheque not as alleged in complaint - No offence is made out u/s 138 of the Act - No reason to interfere in the order of acquittal. (Madamuttathil Abdul Razak Vs M.Yousaf) 2007(2) Civil Court Cases 759 (Kerala) : 2007(2) Criminal Court Cases 1025 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Ingredients of offence u/s 138 of the Act are : (i) a cheque was issued; (ii) the same was presented; (iii) but, it was dishonoured; (iv) a notice in terms of the said provision was served on the person sought to be made liable; and (v) despite service of notice, neither any payment was made nor other obligations, if any, were complied with within fifteen days from the date of receipt of the notice. (S.M.S.Pharmaceutical Ltd. Vs Neeta Bhalla & Anr.) 2007(1) Apex Court Judgments 668 (S.C.) : 2007(2) Civil Court Cases 127 (S.C.) : 2007(2) Criminal Court Cases 026 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Issued as security - Even if cheque is issued as a security for payment, it is negotiable instrument and encashable security at the hands of payee - Not a ground to exonerate the penal liability u/s 138 of N.I. Act. (Umaswamy Vs K.N.Ramanath) 2007(1) Criminal Court Cases 106 (Karnataka) : 2007(2) Civil Court Cases 096 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Jurisdiction - Court at the place of office of Advocate who issued statutory notice has no territorial jurisdiction - Complaint ordered to be returned for its presentation before the proper Court. (Harihara Puthra Sharma Vs State of Kerala & Anr.) 2007(2) Civil Court Cases 168 (Kerala) : 2007(2) Criminal Court Cases 012 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Jurisdiction - Court at the place where money was intended to be paid has jurisdiction - Court at place where cheque was presented for realisation has no jurisdiction to try the offence. (Ahuja Nandkishore Dongre Vs State of Maharashtra) 2007(2) Civil Court Cases 618 (Bombay) : 2007(2) Criminal Court Cases 771 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Law does not mandate proof of original transaction or existence of original consideration - In a prosecution under S.138 of the Act, Criminal Court is not to adjudicate on the liability to discharge with the cheque is alleged to be issued. (Johnson Scaria Vs State of Kerala) 2007(1) Civil Court Cases 196 (Kerala) : 2007(1) Criminal Court Cases 161 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Legally enforceable debt - Rebuttal of presumption - Ink of signature different from the ink of other writings of cheque - Entire cheque amount found not due in view of admission of receipt of certain amount - No legally enforceable debt - Acquittal, held, proper. (V.Rama Shetty Vs N.Sasidaran Nayar) 2007(1) Civil Court Cases 815 (Karnataka) : 2007(1) Criminal Court Cases 536 (Karnataka) : 2007(2) Civil Court Cases 231 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Legally enforceable debt or liability - Cheque issued in discharge of liability arising out of an agreement void ab initio - Provision of S.138 of the Act is not attracted. (Virender Singh Vs Laxmi Narain & Anr.) 2007(2) Civil Court Cases 750 (Delhi) : 2007(2) Criminal Court Cases 430 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Limitation - Notice issued but received back with endorsement 'no such addressee' - Cheque presented against and dishonoured again - Notice issued again - Cause of action arises only on receipt of second notice - Limitation starts to run from receipt of second notice. (T.N.Unnikrishnan Vs T.K.Ramankutty & Anr.) 2007(2) Civil Court Cases 655 (Kerala) : 2007(2) Criminal Court Cases 897 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Loan - No instrument executed though a huge loan was advanced - Even no interest thereon charged - Earlier accused did not pay instalments in respect of the prized amount of chitties - Loan advanced inspite of the fact that three civil suits for recovery of money against accused were pending - Complainant not approaching Court with clean hands and his conduct not that of a prudent man - Held, accused has discharged his burden to rebut the presumption available u/s 139 of the Act - Order of acquittal, upheld. (John K.John Vs Tom Varghese & Anr.) 2007(3) Apex Court Judgments 655 (S.C.) : 2007(4) Civil Court Cases 690 (S.C.) : 2007(4) Criminal Court Cases 974 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Material alteration - Account number changed without consent of drawer as drawer of cheque had closed the account of which the cheque was issued - Amounts to material alteration - Instrument void in law - No action lies u/s 138 of the Act. (B.Krishna Reddy Vs B.K.Somashekara Reddy) 2007(1) Civil Court Cases 526 (Karnataka) : 2007(1) Criminal Court Cases 440 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Misutilisation of blank signed cheque - Sending cheque to handwriting expert - Admission of signature in cheque is not equivalent or synonymous with admission of execution - Magistrate directed to forward the cheque to expert for comparison if accused wants the admitted handwritings/specimen writings to be compared with the disputed writings in the cheque. (Bindu Vs Sreekantan Nair) 2007(2) Civil Court Cases 517 (Kerala) : 2007(2) Criminal Court Cases 626 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Money lending business - Question as to complainant having no money lending licence is not relevant in a complaint filed u/s 138 NI Act which is more in quasi civil and criminal in nature. (S.Parameshwarappa & Anr. Vs S.Choodappa) 2007(2) Civil Court Cases 763 (Karnataka) : 2007(2) Criminal Court Cases 592 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Non appearance of accused due to illness - Process not issued - Single default not sufficient to dismiss the complaint in default when cause shown by complainant for absence is not disbelieved. (Manjit Kaur Vs State of Punjab & Anr.) 2007(1) Civil Court Cases 260 (P&H)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - An omnibus notice without specifying as to what was the amount due under the dishonoured cheque does not subserve the requirement of law. (M/s.Rahul Builders Vs M/s.Arihant Fertilizers & Chemical & Anr.) 2007(3) Apex Court Judgments 554 (S.C.) : 2007(4) Criminal Court Cases 990 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Can be served either through Registered Post or through UPC - Notice if dispatched through UPC with correct address of the drawer written on it, presumption of service of notice arises unless the drawer proves that it was not received by him in fact and that he was not responsible for such non service. (V.K.Jain Vs Sharad Jagtiani) 2007(1) Civil Court Cases 781 (Delhi) : 2007(1) Criminal Court Cases 887 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Cheque issued for part payment of outstanding bills - Cheque dishonoured - By issuing notice demand made of payment of pending bills and not cheque amount - Held, notice is not valid. (M/s.Rahul Builders Vs M/s.Arihant Fertilizers & Chemical & Anr.) 2007(3) Apex Court Judgments 554 (S.C.) : 2007(4) Criminal Court Cases 990 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Demand of loan amount and not demand for payment of cheque amount and further demand of damages on account of mental torture - Demand not in accordance with requirement of the provision of S.138 of the Act - Complaint founded on this demand notice is not maintainable. (Kapil Aggarwal Vs Raghu Vias) 2007(4) Civil Court Cases 106 (Delhi) : 2007(4) Criminal Court Cases 136 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Demand of payment not made in notice - Held, it is not a legal notice strictly in terms of S.138(b) of the Act. (Haryana State Small Industries Vs Laxmi Agro Industries) 2007(1) Civil Court Cases 274 (P&H) (DB) : 2007(1) Criminal Court Cases 269 (P&H) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Despatch of notice within 30 days is the requirement of law - Date of receipt of notice is not crucial or relevant. (Ravi Vs Kuttappan) 2007(3) Civil Court Cases 337 (Kerala) : 2007(3) Criminal Court Cases 071 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Not received by accused - Cheque presented again - Bank not accepting the cheque - Bank had no occasion either to honour or dishonour the cheque - No cause of action - Complaint dismissed. (Manibhadra Marketing Pvt. Ltd & Anr. Vs Chandrakant Manilal Kothari & Anr.) 2007(2) Civil Court Cases 142 (Bombay) : 2007(2) Criminal Court Cases 260 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Proof of - Carbon copy of notice not filed - Photostat copy of notice not admissible in evidence - Accused admitted having received notice and that he replied notice - Complaint cannot be held to be defective on ground of lack of proof of notice. (Fragrant Leasing & Finance Company Ltd. Vs Jagdish Katuria & Anr.) 2007(3) Criminal Court Cases 840 (Allahabad) : 2007(4) Civil Court Cases 281 (Allahabad)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Received back unserved as door locked for several days - It must be deemed that notice has been served - Order returning complaint set aside with a direction to take the complaint on file and proceed in accordance with law. (Pavulmanickam Vs M.S.Jeyachandran) 2007(1) Civil Court Cases 622 (Madras) : 2007(1) Criminal Court Cases 942 (Madras)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Received back unserved with endorsement "addressee long absent and return to sender" - Order taking cognizance not liable to be quashed - However, the allegation that accused refused to receive notice even after due information given by postal authorities are matters for trial. (Asif Akbani Vs P.K.Mani) 2007(4) Civil Court Cases 184 (Madras) : 2007(4) Criminal Court Cases 221 (Madras)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Refusal by addressee - Refusal to accept notice is deemed a proper service - Counting of 15 days starts from date of notice or the date on which notice was refused. (Dinesh Sahu Vs Dr.R.K.Jain & Anr.) 2007(3) Criminal Court Cases 899 (M.P.) : 2007(4) Civil Court Cases 478 (M.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Refusal to receive - Complaint when found to be well within time then non mentioning of date of service or refusal of notice in complaint is not harmful to the complainant. (Dinesh Sahu Vs Dr.R.K.Jain & Anr.) 2007(3) Criminal Court Cases 899 (M.P.) : 2007(4) Civil Court Cases 478 (M.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Sent through registered post at correct address - Notice received back 'unclaimed' - Held, notice is presumed to have been served. (Jayamma Vs Lingamma) 2007(3) Civil Court Cases 466 (Karnataka) : 2007(3) Criminal Court Cases 287 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Service of notice - Where sender dispatched notice by post with correct address written on it, then presumption can be drawn that it is served on the addressee unless he proves that it was not really served and that he was not responsible for such non service. (Armstrong Builders & Developers Vs Vishvanath Naik) 2007(1) Civil Court Cases 707 (Bombay) : 2007(1) Criminal Court Cases 1099 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Undelivered letter or A.D. not received back - Allowance of period of service of notice which at least should be a week is admissible in this regard - Period to file complaint is thus extended to a further period of a week. (ICICI Bank Ltd. Vs Prafull Chandra) 2007(3) Civil Court Cases 532 (Delhi) : 2007(3) Criminal Court Cases 731 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice issued - Assurance given to present cheque again and that it will be honoured - Tendering of cheque for the second time will not frustrate the cause of action which arose on tendering the cheque for the second time. (Haryana State Small Industries Vs Laxmi Agro Industries) 2007(1) Civil Court Cases 274 (P&H) (DB) : 2007(1) Criminal Court Cases 269 (P&H) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice issued but no complaint filed - Cheque can be presented for the second time and complaint filed on fresh cause of action in case : (i) Envelope addressed to the complainant is lost or damaged or destroyed in transit; (ii) the letter does not reach the respondent for want of correct address; (iii) the envelope so received by the respondent is short of notice and it is blank; (iv) the letter so posted is not received by the actual addressee and the postage is stolen in transit; and (v) As assured and promised by the respondent, the cheque has been tendered for the second time. (Haryana State Small Industries Vs Laxmi Agro Industries) 2007(1) Civil Court Cases 274 (P&H) (DB) : 2007(1) Criminal Court Cases 269 (P&H) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice sent - Receipt of notice denied - On the other hand prayer made for dismissal of complaint on plea that complaint is barred by
time in view of notice served by complainant - Held, these are inconsistent pleas and are self contradictory and an afterthought which is apparently carved out to resist the claim of complainant. (Haryana State Small Industries Vs Laxmi Agro Industries) 2007(1) Civil Court Cases 274 (P&H) (DB) : 2007(1) Criminal Court Cases 269 (P&H) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Offence when committed - It is not giving of notice which makes offence - It is the receipt of notice by drawer which gives cause of action - Cause of action is complete when drawer fails to make payment within 15 days of receipt of notice - Offence is deemed to have been committed only from the date when notice period expires - Normally cause does not arise until the commission of offence. (Haryana State Small Industries Vs Laxmi Agro Industries) 2007(1) Civil Court Cases 274 (P&H) (DB) : 2007(1) Criminal Court Cases 269 (P&H) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Only the drawer of cheque is liable - A payee or an endorser is not liable under S.138 of the Act. (P.N.Gopinathan Vs Sivadasan & Anr.) 2007(1) Civil Court Cases 729 (Kerala) : 2007(1) Criminal Court Cases 1077 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Partnership firm - Absence of averment in complaint that accused is incharge and responsible for the conduct of the business of the firm and as to how and in what manner he was so responsible - Complaint qua petitioner quashed. (Anil Kumar Vs State & Anr.) 2007(1) Civil Court Cases 739 (Delhi) : 2007(1) Criminal Court Cases 1038 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Partnership firm - Mis-description of accused as proprietor whereas he was a partner - Complaint not to be rejected on this ground. (Anil Kumar Vs State & Anr.) 2007(1) Civil Court Cases 739 (Delhi) : 2007(1) Criminal Court Cases 1038 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Partnership firm - Partner - Specific averments in complaint revealing role played by them and that they looked after day to day affairs of the firm - Plea that petitioner was not a partner in firm or that he was not involved in day to day affairs of firm - Such fact to be established at trial - No ground to quash complaint. (Chhedi Lal Gupta Vs Shri Suresh Damani & Anr.) 2007(3) Criminal Court Cases 672 (Calcutta) : 2007(4) Civil Court Cases 274 (Calcutta)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Pendency of civil suit for recovery of cheque amount - Not a bar for proceeding u/s 138 of the Act - Provision of S.138 of the Act is an additional criminal remedy over and above the civil remedy available. (Sree Sakthi Paper Mills Ltd. Vs Anjaneya Enterprises) 2007(4) Criminal Court Cases 660 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Plea of accused that blank cheque as security was given and even after repayment of loan cheque was misused - Accused admitted in his cross examination that cheque was given to repay the debt - No merit in contention that blank cheque was given - No ground to interference in concurrent finding of conviction. (Sharad Kumar Tiwari Vs Smt.Laxmi Tiwari) 2007(4) Criminal Court Cases 808 (Rajasthan)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Power of attorney holder - Complaint signed by power of attorney holder in his own name and not on behalf of complainant - Complaint is maintainable and not bad in law. (K.Gopalakrishnan Vs Karunakarann rep.by the Power of Attorney Holder) 2007(2) Civil Court Cases 559 (Madras) (DB) : 2007(2) Criminal Court Cases 683 (Madras) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Power of attorney holder - It is not required to record the sworn affidavit of complainant also on a future date to enable the Court to exercise its discretion u/ss 202 & 203 of Cr.P.C. (K.Gopalakrishnan Vs Karunakarann rep.by the Power of Attorney Holder) 2007(2) Civil Court Cases 559 (Madras) (DB) : 2007(2) Criminal Court Cases 683 (Madras) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Pre mature complaint - Cannot be rejected on this ground alone - However, cognizance can be taken on such a complaint after it is matured. (Yogendra Kumar Chaturvedi Vs Ashok Kumar Goyal & Anr.) 2007(1) Civil Court Cases 387 (Rajasthan) : 2007(2) Criminal Court Cases 334 (Rajasthan)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Pre-mature complaint - However, cognizance taken after maturity of complaint - Mere presentation of pre mature complaint need not necessarily render the complaint liable to be dismissed - No ground to quash proceedings. (Prashant M.Aachawal Vs Gulab Singh Raghuvanshi) 2007(4) Civil Court Cases 251 (M.P.) : 2007(4) Criminal Court Cases 201 (M.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Premature complaint - Not proper to dismiss complaint - Complaint should be kept pending till the ripening of cause of action or complaint to be returned with an advice to the complainant for presentation after completion of necessary statutory period. (V.S.Shivadas Vs Ramanath Shetty & Anr.) 2007(2) Civil Court Cases 747 (Karnataka) : 2007(2) Criminal Court Cases 905 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Production of books of account maintained by complainant - Permissible only when debt or liability is disputed by accused and existence of account books/papers is admitted by complainant. (Rajeev Soni Vs Indresh Singh) 2007(2) Civil Court Cases 782 (M.P.) : 2007(2) Criminal Court Cases 888 (M.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Quashing of complaint - Whether there is any enforceable debt, whether accused gave the cheque for discharge of such debt and whether there was any material alteration in the cheque are the questions to be considered during the course of trial - Complaint not to be quashed on these grounds. (Maganti Ganta Avadhani Vs Kopuri Sreenivasa Rao) 2007(4) Civil Court Cases 034 (A.P.) : 2007(4) Criminal Court Cases 294 (A.P.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Quashing of complaint on ground that complainant is not a holder in due course - Question can be decided only when parties lead evidence - No ground to quash complaint. (Anil Kumar Jaiswal Vs State & Anr.) 2007(2) Civil Court Cases 730 (Allahabad) : 2007(2) Criminal Court Cases 982 (Allahabad)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Receipt of information from Bank - It can be in any language and through any mode - written, electronic, fax or even verbal. (A.K.Chaudhary & Ors. Vs Nandita Malhotra) 2007(4) Criminal Court Cases 593 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Sentence - Cheque amount 4 lakhs - Accused sentenced to two years imprisonment and to pay compensation of Rs.5 lakhs - Sentence reduced to one year imprisonment but order of compensation upheld. (Sharad Kumar Tiwari Vs Smt.Laxmi Tiwari) 2007(4) Criminal Court Cases 808 (Rajasthan)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Sentence - Cheque amount Rs.20,000/- - Accused sentenced to undergo imprisonment till rising of Court - Accused to pay Rs.27,000/- as compensation and in default to undergo S.I. for a period of one month - If realised the entire amount be released to the complainant. (K.P.Rathikumar Vs N.K.Santhamma & Anr.) 2007(4) Civil Court Cases 546 (Kerala) : 2007(4) Criminal Court Cases 343 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Sentence - Two cheque of the value of Rs.55,500/- - Fine imposed Rs.2500/- in each case without any direction to pay amount due on cheques bounced - Complainant should at least be compensated with the amount due by the accused on the cheque issued by him - That should be the rule unless there are good reasons to depart from the same - Sentence imposed set aside and case remanded with a direction to pass appropriate sentence in accordance with law. (Shri Basavraj D.Allayyanvar Vs Shri Santosh Kapadi) 2007(3) Civil Court Cases 658 (Bombay) : 2007(3) Criminal Court Cases 437 (Bombay)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Service of notice by hand delivery - Refusal - Presumption of service cannot be raised as the same is not effected in terms of the statute. (M/s. Sarav Investment & Financial Consultants Pvt. Ltd. & Anr. Vs Llyods Register of Shipping Indian Office Staff Provident Fund & Anr. ) 2007(4) Criminal Court Cases 527 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Seven cheques issued on different dates - Separate notices issued - Seven complaints are maintainable - However, in case single notice is issued then all the transactions covered by the notice would be regarded as a single transaction, permitting a single trial. (Rajendra B.Choudhari Vs State of Maharashtra & Anr.) 2007(2) Civil Court Cases 523 (Bombay) (DB) : 2007(2) Criminal Court Cases 748 (Bombay) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Seven cheques issued on different dates - Separate notices issued - Seven complaints filed - Trial for each offence held separately and accused convicted - Held, it is not obligatory for the trial Court to direct in all cases that subsequent sentence shall run concurrently with the previous sentence - Refusal of Magistrate to direct the subsequent sentence to run concurrently with the previous sentence cannot lead to causing miscarriage of justice. (Rajendra B.Choudhari Vs State of Maharashtra & Anr.) 2007(2) Civil Court Cases 523 (Bombay) (DB) : 2007(2) Criminal Court Cases 748 (Bombay) (DB)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Signature in cheque - Admission of signature in cheque is not equivalent or synonymous with admission of execution - By mere admission of signature right of accused to contend that a blank signed cheque was misutilised by the payee is not taken away. (Bindu Vs Sreekantan Nair) 2007(2) Civil Court Cases 517 (Kerala) : 2007(2) Criminal Court Cases 626 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Signature on cheque denied - No steps taken to prove that the said signature is that of the accused - Complaint is liable to be dismissed. (Nagaraja Upadhya Vs M.Sanjeevan) 2007(4) Civil Court Cases 387 (Karnataka) : 2007(4) Criminal Court Cases 167 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Signatures denied - Handwriting expert - When cheque is dishonoured for insufficiency of funds then there is no need for handwriting expert to give his opinion on signature on cheque - In case of denial of signature of drawer of a cheque, the best witness would be the concerned Bank Manager and not a handwriting expert - Impugned order allowing application not sustainable in law. (H.M.Satish Vs B.N.Ashok) 2007(2) Civil Court Cases 328 (Karnataka) : 2007(2) Criminal Court Cases 549 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Signed blank cheque - Defence that a signed blank cheque was handed over by an account holder is inherently suspicious - Burden rests heavily on shoulders of account holder to claim absolution from culpable liability. (Bhaskaran Nair Vs Abdul Kareem) 2007(1) Civil Court Cases 104 (Kerala)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - 'Stop payment' - For valid reasons - Burden of proving that cheque was not dishonoured for sufficient funds and was dishonoured for valid reasons is on the accused - Complaint cannot be quashed on this ground. (Nagendra Prasad
Singh & Anr. Vs State of Bihar & Anr.) 2007(1) Civil Court Cases 698 (Patna) : 2007(1) Criminal Court Cases 999 (Patna)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Stop payment - In no way absolve statutory liability cast upon accused - Accused liable to be punished u/s 138 of the Act. (Balasubbaraj Vs R.Narayanan) 2007(4) Civil Court Cases 073 (Madras) : 2007(4) Criminal Court Cases 073 (Madras)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Summoning order - Accused appeared through counsel and moved an application for exemption from his personal appearance - Application dismissed and non bailable warrants issued and also issued process u/ss 82/83 Cr.P.C. - Order set aside - Issue of non bailable warrants and issue of process u/ss 82/83 Cr.P.C. is not required when accused is represented through his counsel and it is not a case where he is absconding and evading the court process. (Sanjay Chaturvedi Vs State) 2007(2) Civil Court Cases 392 (Delhi) : 2007(2) Criminal Court Cases 044 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Summoning order - Detailed reasons need not to be given. (Kulbir Singh Uberoi & Anr. Vs M/s.Kumar Industries) 2007(3) Civil Court Cases 181 (P&H) : 2007(3) Criminal Court Cases 142 (P&H)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Summoning order - Has to be on the basis of allegations in complaint and preliminary evidence - Defence set up in reply to notice not to be looked into at that stage. (Kulbir Singh Uberoi & Anr. Vs M/s.Kumar Industries) 2007(3) Civil Court Cases 181 (P&H) : 2007(3) Criminal Court Cases 142 (P&H)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Summoning order - Quashing of - Plea that goods were rejected and complainant was not entitled to get the cheque encashed - Summoning order cannot be quashed on this ground - Plea is available at the time of defence. (M/s V.V.Enterprises & Anr. Vs M/s Bansal Industries) 2007(3) Criminal Court Cases 917 (P&H) : 2007(4) Civil Court Cases 037 (P&H)
Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - There was no debt or liability at the time when cheque was given - Complaint not maintainable - Summoning order quashed. (Exports India & Anr. Vs State & Anr.) 2007(3) Civil Court Cases 198 (Delhi) : 2007(3) Criminal Court Cases 252 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Evidence Act, 1872, S.47 - Dishonour of cheque - Expert opinion - Signature on cheque disputed - Court undertook exercise of naked comparison of signatures of accused on cheque with other admitted signatures and came to conclusion that signature on cheque does
not appear to be signature of accused - Court should be assisted by experts opinion - Banker is more competent to say whether it is signature of accused or not with reference to specimen signatures - Issuance of cheque proved - Presumption arises u/s 139 of Act in favour of complainant - Acquittal not valid. (Rajendra Prasad Vs M.Shivaraj) 2007(1) Criminal Court Cases 220 (Karnataka) : 2007(2) Civil Court Cases 161 (Karnataka)
Negotiable Instruments Act, 1881, S.138 - Holder in due course - Cheque payable to bearer - Respondent is deemed to be holder in due course of cheque - Has locus to file complaint on dishonour of cheque. (Sardar Jasvir Singh & Anr. Vs State of Uttar Pradesh & Anr.) 2007(3) Civil Court Cases 534 (Allahabad) : 2007(3) Criminal Court Cases 865 (Allahabad)
Negotiable Instruments Act, 1881, S.138 - Jurisdiction - High Court of one State cannot quash criminal proceedings pending in a Court within jurisdiction of another High Court. (Tripti Vyas Vs M/s Ahlers India Pvt.Ltd.) 2007(3) Civil Court Cases 469 (Rajasthan) : 2007(3) Criminal Court Cases 232 (Rajasthan)
Negotiable Instruments Act, 1881, S.138 - Notice - Absence of pleading that notice was sent at the correct address of the drawer by registered post acknowledgement due - However, returned envelope annexed to complaint and thus it formed part of the complaint - Returned enveloped showed that it was sent by registered post acknowledgement due to the correct address with endorsement that 'the addressee was abroad' - Held, requirement of S.138 of the Act is sufficiently complied with. (C.C.Alavi Haji Vs Palapetty Muhammed & Anr.) 2007(2) Apex Court Judgments 526 (S.C.) : 2007(3) Civil Court Cases 001 (S.C.) : 2007(3) Criminal Court Cases 037 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Notice - Claim as to non receipt of - Drawer can still make the payment of cheque amount within 15 days of the receipt of summons and can absolve himself of prosecution u/s 138 of the Act - If drawer does not make payment of cheque amount within 15 days of the receipt of summons then plea of proper service of notice is not available to him. (C.C.Alavi Haji Vs Palapetty Muhammed & Anr.) 2007(2) Apex Court Judgments 526 (S.C.) : 2007(3) Civil Court Cases 001 (S.C.) : 2007(3) Criminal Court Cases 037 (S.C.)
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DISHONOUR OF CHEQUE
2007 CASE LAW
PREVIOUS
Negotiable Instruments Act, 1881, S.138 - Notice - 'Giving notice' is not the same as 'receipt of notice' - Giving is a process of which receipt is the accomplishment - It is for the payee to perform the former process by sending the notice to the drawer at the correct address - Once notice is dispatched his part is over and the next depends on what the sendee does. (C.C.Alavi Haji Vs Palapetty Muhammed & Anr.) 2007(2) Apex Court Judgments 526 (S.C.) : 2007(3) Civil Court Cases 001 (S.C.) : 2007(3) Criminal Court Cases 037 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Notice - Received back unclaimed - In case of unclaimed notice the deemed service of notice is to be reckoned from the date of postal endorsement and not from the date the undelivered notice is received back by the sender. (Ashwani Kumar Julka Vs Lt.Col.Parthojit Choudhary (Retd.)) 2007(4) Criminal Court Cases 513 (Delhi)
Negotiable Instruments Act, 1881, S.138 - Notice - Sent by registered post at correct address - Notice received back with postal endorsement that addressee was abroad - Held, provision of S.138 is sufficiently complied with. (C.C.Alavi Haji Vs Palapetty Muhammed & Anr.) 2007(2) Apex Court Judgments 526 (S.C.) : 2007(3) Civil Court Cases 001 (S.C.) : 2007(3) Criminal Court Cases 037 (S.C.)
Negotiable Instruments Act, 1881, S.138 - Partnership firm - Son of deceased partner - Cannot be impleaded as an accused merely for the reason that he happens to be the son of deceased partner. (Sardar Jasvir Singh & Anr. Vs State of Uttar Pradesh & Anr.) 2007(3) Civil Court Cases 534 (Allahabad) : 2007(3) Criminal Court Cases 865 (Allahabad)
Negotiable Instruments Act, 1881, S.138 - Pre mature complaint - Complaint not to be dismissed - Complaint can be kept pending for taking cognizance when cause of action arises to the complainant or it may be returned to complainant for filing it later. (L.K.Prabhavathi Vs K.V.Sree Rama Murthy & Anr.) 2007(3) Criminal Court Cases 767 (A.P.) : 2007(4) Civil Court Cases 523 (A.P.)
Negotiable Instruments Act, 1881, S.138 (As amended) - Dishonour of cheque - Notice - After amendment of Act notice can be sent within one month of receipt of information of dishonour of cheque. (Nagendra Prasad Singh & Anr. Vs State of Bihar & Anr.) 2007(1) Civil Court Cases 698 (Patna) : 2007(1) Criminal Court Cases 999 (Patna)
Negotiable Instruments Act, 1881, S.138 Proviso (a) - 'Within a period of six months' - Date of cheque is not to be excluded in calculating the period of six months. (Nanu Vs Vijayan) 2007(2) Civil Court Cases 193 (Kerala) : 2007(2) Criminal Court Cases 350 (Kerala)
Negotiable Instruments Act, 1881, S.138 r/w Indian Penal Code, 1860, S.420 - Accused borrowed money and issued two cheques - Two options were available to complainant to either get the cheques encashed or in the alternative to get plot of 100 square yards - Subsequent to the bouncing of cheques complainant did not avail of second option - Held, as there was contingent alternative available to complainant to get worth of his money in terms of real estate which was not availed, no offence u/s 420 IPC is made out. (Geeta Vs State of U.P. & Anr.) 2007(3) Civil Court Cases 810 (Allahabad) : 2007(3) Criminal Court Cases 540 (Allahabad)
Negotiable Instruments Act, 1881, S.138, Companies Act, S.446 - Dishonour of Cheque - Provision of S.446 of Companies Act has no application to the provisions of S.138 of Negotiable Instruments Act - S.138 of NI Act has overriding effect over section 446 of Companies Act - Order staying proceedings under section 138 because of S.446 of Companies Act, quashed. (Gyan Chand Vs State of Rajasthan & Anr.) 2007(1) Criminal Court Cases 256 (Rajasthan) : 2007(2) Civil Court Cases 176 (Rajasthan)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.195(1)(b)(ii) - Dishonour of cheque - Cheque alleged to be forged before filing complaint - Held, if offence is committed pertaining to document prior to its production in Court and when it was not in custody of Court then bar u/s 195(1)(b)(ii) of Cr.P.C. does not arise and complainant is at liberty to file complaint and take action as per law. (Ramanand Vs Kailasnath & Anr.) 2007(1) Civil Court Cases 658 (Bombay) : 2007(1) Criminal Court Cases 509 (Bombay)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.205 - Dishonour of cheque - Exemption from personal appearance - Cheque amount Rs.2 lakhs - Exemption granted from personal appearance on deposit of an amount of Rs.2 lakhs. (Kulbir Singh Uberoi & Anr. Vs M/s.Kumar Industries) 2007(3) Civil Court Cases 181 (P&H) : 2007(3) Criminal Court Cases 142 (P&H)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.243 - Dishonour of cheque - Signatures on cheque denied - Sending cheque to document expert sought when case was at the stage of defence evidence - Such a request should be granted unless Magistrate thinks that such a request is vexatious or delaying the criminal proceedings. (Kalyani Baskar Vs M.S.Sampoornam) 2007(1) Apex Court Judgments 524 (S.C.) : 2007(1) Criminal Court Cases 655 (S.C.)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.243, Evidence Act, 1872, S.45 - Dishonour of cheque - Signatures on cheque denied - Sending cheque to handwriting expert - Cannot be denied on the ground that accused filed application without naming any person as witness or anything to be summoned, which are to be sent for handwriting expert for examination. (Kalyani Baskar
Vs M.S.Sampoornam) 2007(1) Apex Court Judgments 524 (S.C.) : 2007(1) Criminal Court Cases 655 (S.C.)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - Dishonour of cheque - Complaint - Dismissal in default - Complaint can be dismissed in default when personal attendance of complaint was essential on the crucial date - Order dismissing complaint in default set aside as complaint was dismissed without considering the said question. (Dilawar Singh Vs Pankaj Joshi & Anr.) 2007(2) Civil Court Cases 355 (P&H) : 2007(2) Criminal Court Cases 604 (P&H)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - Dishonour of cheque - Complaint - Dismissal in default for non prosecution - Transfer of case from one Court to another Court - Reason for non appearance adequately explained - Technicalities should not block the road for justice - No prejudice to shall be caused to respondent in case parties are heard on merits - Complaint restored to be decided on merits. (M/s.Plaza Cables Electric Pvt.Ltd. Vs Kamal Khurana) 2007(4) Criminal Court Cases 384 Delhi)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - Dishonour of cheque - Complaint - Summary trial - Provision of S.256 Cr.P.C. applies - Non appearance of complainant on date fixed for appearance of accused - Magistrate has no option but to acquit accused unless he chooses to adjourn the proceeding to some other date. (Vinay Kumar Vs State of U.P. & Anr.) 2007(4) Civil Court Cases 062 (Allahabad) : 2007(4) Criminal Court Cases 120 (Allahabad)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - Dishonour of cheque - Death of complainant during pendency of complaint - Son came forward to continue the proceedings - He is competent to conduct the proceedings initiated by the deceased father - Dismissal of petition on death of complainant set aside and son allowed to continue the proceedings. (Gene Vs Gabriel) 2007(4) Criminal Court Cases 742 (Madras)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - Dishonour of cheque - Dismissal of complaint in default - On date fixed complainant fell ill - Counsel also did not appear - Complaint dismissed in default - A party cannot be made to suffer for negligence of his counsel - Dismissal set aside. (Kulwant Singh Vs Balhar Singh) 2007(1) Civil Court Cases 601 (P&H) : 2007(1) Criminal Court Cases 459 (P&H)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256(1) - Dishonour of cheque - Dismissal of complaint in default - Magistrate before dismissing the complaint in default should record reasons as to why he does not deem it proper to adjourn the hearing - When no such reasons are forthcoming, complaint ordered to be restored. (Manjit Kaur Vs State of Punjab & Anr.) 2007(1) Civil Court Cases 260 (P&H)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.311 - Dishonour of cheque - Recall of complainant for cross examination when the case was at the stage of pronouncement of judgment - Not clear as to what type of questions are necessary to be put to the complainant - At the fag end of trial, reopening of trial cannot be permitted and complainant cannot be recalled for cross examination. (Rajkumar Vs Smt.Gunmala & Ors.) 2007(2) Civil Court Cases 798 (M.P.) : 2007(4) Criminal Court Cases 735 (M.P.)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.311 - Dishonour of cheque - Recall of witness - Bank witness produced but through oversight the dishonoured cheque and memo issued by Bank not exhibited - It is a case of oversight and not an attempt to fill in the lacuna - Production of cheque and memo is necessary for the just decision of a complaint - Application allowed. (Janeshwar Dutt Vs Sanjiv Kumar) 2007(2) Civil Court Cases 693 (P&H) : 2007(2) Criminal Court Cases 833 (P&H)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.357 - Dishonour of cheque - Fine and/or compensation - Imposition of fine and/or compensation must be considered having regard to the relevant factors in mind as envisaged u/s 357 of the Code of Criminal Procedure. (P.Suresh Kumar Vs R.Shankar) 2007(2) Apex Court Judgments 140 (S.C.) : 2007(2) Civil Court Cases 84 (S.C.) : 2007(2) Criminal Court Cases 082 (S.C.)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.357(1), (3) & (5) - Dishonour of cheque - Compensation - Unless amount is claimable in civil suit, direction u/s 357(1) or S.357(3) Cr.P.C. for payment of compensation cannot be issued. (Sathyan Ayyappa Sathyan Vs Yousu & Anr.) 2007(3) Civil Court Cases 639 (Kerala) : 2007(3) Criminal Court Cases 889 (Kerala)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.357(3) - Dishonour of cheque - Compensation - Interest - Court can ascertain the loss which the complainant would suffer/has suffered on account of the delay in payment and appropriate rate of interest can be directed to be paid, consistent with the rate of interest payable by the nationalised banks - In the instant case interest at the rate of 8% per annum allowed. (Sathyan Ayyappa Sathyan Vs Yousu & Anr.) 2007(3) Civil Court Cases 639 (Kerala) : 2007(3) Criminal Court Cases 889 (Kerala)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.357(3) - Dishonour of cheque - Compensation - Interest - Direction can be issued u/s 357(3) Cr.P.C. for payment of interest. (Sathyan Ayyappa Sathyan Vs Yousu & Anr.) 2007(3) Civil Court Cases 639 (Kerala) : 2007(3) Criminal Court Cases 889 (Kerala)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.357(4)- Dishonour of cheque - Compensation - Accused convicted and sentenced to three months simple imprisonment and to pay a fine of Rs.5,000/- and in default to undergo simple imprisonment for 20 days - By imposing the sentence of imprisonment alone, complainant cannot recover the money from the accused - Accused directed to pay a compensation equal to that of cheque amount. (Selvaraj Vs N.Jeyaraman) 2007(1) Civil Court Cases 646 (Madras) : 2007(1) Criminal Court Cases 869 (Madras)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.378 - Dishonour of cheque - Acquittal - Appeal against - It is necessary for Appellate Court to find out as to what facts are established and whether on the basis of such facts, any presumption get attracted or rebutted in order to draw appropriate inferences. (Purushottam Vs Manohar K.Deshmukh & Anr.) 2007(1) Criminal Court Cases 682 (Bombay) : 2007(1) Civil Court Cases 423 (Bombay)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.401 - Dishonour of cheque - Revision - Every error is not justification for invoking revisional powers - Unless the alleged infraction of procedure resulted in miscarriage of justice, revisional jurisdiction cannot be invoked. (Bhaskaran Nair Vs Abdul Kareem) 2007(1) Civil Court Cases 104 (Kerala)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.438 - Transitory bail - Jurisdiction - Dishonour of cheque - Accused living at Chandigarh - Case pending before Court at Jaipur - Punjab and Haryana High Court granted transitory bail for 21 days - Punjab and Haryana High Court can grant anticipatory bail for transitory period. (Gurmit Kaur Vs U.T. Chandigarh) 2007(1) Civil Court Cases 067 (P&H)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482 - Dishonour of cheque - Company - Director - Cheque issued in 2003 whereas petitioner ceased to be Director of Company in 1994 - Certified copy of Form-32 issued by Registrar of Companies is a conclusive proof that petitioner resigned in 1994 - Petitioner was not Director at the material time - Proceedings against petitioner, quashed . (Dr.(Mrs.) Sarla Kumar Vs Srei International Finance Ltd.) 2007(2) Civil Court Cases 065 (Delhi)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482 - Dishonour of cheque - Company - Director - Cheque issued in 2003 whereas petitioner ceased to be Director of Company in 1994 - Certified copy of Form-32 issued by Registrar of Companies is a conclusive proof that petitioner resigned in 1994 - Petitioner was not Director at the material time - Proceedings against petitioner, quashed. (Dr.(Mrs.) Sarla Kumar Vs Srei International Finance Ltd.) 2007(1) Criminal Court Cases 071 (Delhi)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482 - Dishonour of cheque - Quashing of complaint - Accused took plea that cheque was in possession of complainant for
collateral security - It is not a ground for quashing complaint - Such matter has to be looked into at stage of trial. (M/s Jai Durga Enterprises & Anr. Vs State of U.P. & Anr.) 2007(1) Criminal Court Cases 751 (Allahabad) : 2007(2) Civil Court Cases 098 (Allahabad)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482 - Dishonour of cheque - Quashing of proceedings - In proceedings u/s 482 of Cr.P.C. High Court is not to go into the truthfulness of the allegations - Once a complaint discloses the commission of an offence, the veracity of the allegations is not to be tested in proceedings u/s 482 of the Code as the same had to be tested in the backdrop of the evidence which is yet to come on record. (Kulbir Singh Uberoi & Anr. Vs M/s.Kumar Industries) 2007(3) Civil Court Cases 181 (P&H) : 2007(3) Criminal Court Cases 142 (P&H)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482, General Clauses Act, 1897, S.27 - Dishonour of cheque - Notice - Sent as per registered post and also as per UPC - Notice sent as per registered post returned by postman by endorsing false report - Notice sent under UPC received by addressee - Service of notice denied by filing affidavit - Same not controverted by filing counter affidavit - It is liable to be deemed that there was no sufficient service of notice - Proceedings quashed. (M/s Jai Durga Enterprises & Anr. Vs State of U.P. & Anr.) 2007(1) Criminal Court Cases 751 (Allahabad) : 2007(2) Civil Court Cases 098 (Allahabad)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.561-A - Dishonour of cheque - Process issued - Quashing of proceedings - Cheque not presented within its validity period i.e. six months - Liability u/s 138 of Act not incurred - Proceedings quashed. (Shrikant Chavan Vs Hotel the Vaishno Devi) 2007(2) Civil Court Cases 368 (J&K) : 2007(2) Criminal Court Cases 009 (J&K)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.91 - Dishonour of cheque - Production of account books - Amount of cheque recorded in account books - Accused in defence evidence can seek an order as to production of account books to rebut the presumption that cheque was issued for discharge of debt or other liability legally enforceable - Order as to production of account books - No interference. (Firm Baghala Bros. Vs Maniram) 2007(2) Criminal Court Cases 103 (Rajasthan)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.14 & 190 - Dishonour of cheque - Complaint - Jurisdiction - Every Judicial Magistrate in a district has jurisdiction to entertain a complaint - However, only jurisdictional Magistrate has power to try the same - If any Magistrate not empowered by law to do any other thing including to take cognizance of an offence, but may have erroneously in good faith done that thing, his proceedings shall not be set aside merely on the ground that he was not empowered. (Soman Achari Vs Sabu Jacob) 2007(1) Civil Court Cases 522 (Kerala) : 2007(1) Criminal Court Cases 460 (Kerala)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.190, 178, Constitution of India, Article 227 - Dishonour of cheque - Cause of action arose within State of Kerala but complaint filed in a Court outside the State of Kerala - Kerala High Court is not competent to quash the complaint or interfere with the proceedings before a criminal court, outside the jurisdiction of the Court. (Meenakshi Sathish (Mrs.) Vs Southern Petrochemical Industries & Ors.) 2007(2) Civil Court Cases 685 (Kerala) (FB) : 2007(2) Criminal Court Cases 798 (Kerala) (FB)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.190, 460, 14 - Dishonour of cheque - Complaint - Territorial jurisdiction - Complaint filed in the Court of CJM whereas it had to be filed in the Court of Magistrate in the same district - CJM erroneously took cognizance - Complaint returned to be presented in a Court having territorial jurisdiction - Complaint beyond limitation when filed in Court of Magistrate - Every Magistrate has jurisdiction to entertain a complaint throughout the district, but because of division of work that Court may not try a complaint and, therefore, it may order presentation of complaint at a place so earmarked - Held, once the Court of CJM had jurisdiction to entertain the complaint, the period provided for limitation would stop running from the day it was presented in the said Court - Complaint, held within limitation. (V.K.Soman Pillai Vs Sabu Jacob & Anr.) 2007(2) Civil Court Cases 599 (Kerala) : 2007(2) Criminal Court Cases 945 (Kerala)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.204, 200, 190 - Dishonour of cheque - Summoning order - Recall of order - Magistrate has no jurisdiction to recall the summoning order - A Magistrate does not have and, thus, cannot exercise any inherent jurisdiction. (Everest Advertising Pvt.Ltd. Vs State, Govt. of NCT of Delhi & Ors.) 2007(2) Apex Court Judgments 191 (S.C.) : 2007(2) Civil Court Cases 708 (S.C.) : 2007(2) Criminal Court Cases 791 (S.C.)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.205 & 317 - Dishonour of cheque - Exemption from personal appearance - Dismissal of application - Reasons not assigned - Court while passing an order is required to assign reasons for the conclusions arrived at - Impugned order set aside - Court to decide application afresh. (Sri Brajabandhu Mohapatra Vs Sri Sasanka Sekhar Senapati) 2007(4) Criminal Court Cases 769 (Orissa)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.205 and 251 - Dishonour of cheque - Exemption from personnel appearance - Petitioner, a household lady, having two school going children - Petitioner has to also look after her old mother-in-law besides two school going children - Occurrence 5 years old - Exemption from personal appearance granted. (Anita Nanda Vs State of Punjab & Anr.) 2007(1) Civil Court Cases 151 (P&H)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.256, 378(4), 401(4) - Dishonour of cheque - Complaint - Non appearance of complainant on date fixed for appearance of accused - Accused acquitted - Complainant had right to file special leave to appeal to High Court u/s 378(4) - No appeal filed - Revision is not maintainable before Sessions Judge. (Vinay Kumar Vs State of U.P. & Anr.) 2007(4) Civil Court Cases 062 (Allahabad) : 2007(4) Criminal Court Cases 120 (Allahabad)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.256, 385, 386 - Dishonour of cheque - Conviction - Appeal - Admitted and notice ordered to be issued to the complainant - Non appearance of accused - Appeal cannot be dismissed for default - Appellate Court has to peruse the record and pass an order on merits. (V.R.Jayasankar Vs K.G.Dharman & Anr.) 2007(2) Civil Court Cases 252 (Kerala) : 2007(2) Criminal Court Cases 657 (Kerala)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.357(2), (3), 421 and 424 - Dishonour of cheque - Company - Conviction of company and A2 - Company sentenced to pay fine of Rs.25,000/- - A2 was sentenced to suffer imprisonment for one month - A2 also directed to pay compensation of Rs.15 lacs to the complainant - Appeal against - Appellate Court while admitting appeal directed them to deposit a sum of Rs.5 lacs each - Held, impugned order is not sustainable - Amount of compensation must be a reasonable amount - A2 directed to deposit a sum of Rs.1 lac - Since fine alone has been imposed on company which can be suspended during appeal. (Dilip S.Dahanukar Vs Kotak Mahindra Co.Ltd. & Anr.) 2007(2) Apex Court Judgments 387 (S.C.) : 2007(2) Criminal Court Cases 915 (S.C.) : 2007(3) Civil Court Cases 113 (S.C.)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.357(2), (3), 421 and 424 - Dishonour of cheque - Fine and compensation - Distinction between sub-sections (1) and (3) of S.357 Cr.P.C. - Magistrate cannot award compensation in addition to fine - Compensation cannot be recovered forthwith unless period of appeal expires - There is no reason as to why the amount of compensation should be held to be automatically payable, although the same is only to be recovered as if a fine has been imposed. (Dilip S.Dahanukar Vs Kotak Mahindra Co.Ltd. & Anr.) 2007(2) Apex Court Judgments 387 (S.C.) : 2007(2) Criminal Court Cases 915 (S.C.) : 2007(3) Civil Court Cases 113 (S.C.)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.482 and 200 - Dishonour of cheque - Time barred complaint - Condonation of delay - First notice of application be issued to the other side without taking cognizance of complaint - Application be decided after hearing the parties. (Prashant Goel Vs State & Anr.) 2007(1) Criminal Court Cases 838 (Delhi) : 2007(2) Civil Court Cases 028 (Delhi)
Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, S.357 - Dishonour of cheque of Rs.3 lacs - Accused convicted and sentenced till rising of Court - Accused liable to pay compensation of Rs.3.50 lacs and in default to undergo two months S.I. - Compensation amount if realised payable to complainant. (Ramakrishnan Vs Gangadharan Nair & Anr.) 2007(3) Civil Court Cases 713 (Kerala) : 2007(3) Criminal Court Cases 459 (Kerala)
Negotiable Instruments Act, 1881, S.138, Evidence Act, 1872, S.114 - Dishonour of cheque - Notice - Notice returned with endorsement that addressee did not claim the notice and the persons in
occupation did not receive the intimation and not as "No such addressee" - Presumption that addressee resides at that address is proper. (Bhaskaran Nair Vs Abdul Kareem) 2007(1) Civil Court Cases 104 (Kerala)
Negotiable Instruments Act, 1881, S.138, Evidence Act, 1872, S.114, General Clauses Act, 1897, S.27 - Dishonour of cheque - Notice - Sent through private courier service - Presumption of service of notice is not available - Presumption of service of notice is available only when notice is sent by post, properly addressed, prepaying and sent by registered post - Held, in absence of date of service of notice of demand, summoning order quashed. (Deepak Kumar & Anr. Vs State of Uttar Pradesh & Anr.) 2007(2) Civil Court Cases 467 (Allahabad) : 2007(2) Criminal Court Cases 631 (Allahabad)
Negotiable Instruments Act, 1881, S.138, Evidence Act, 1872, S.45 - Dishonour of cheque - Signatures - Handwriting expert - Accused did not dispute the handwriting on the cheque - Opinion of handwriting expert not necessary - Application filed by accused to that effect rightly dismissed. (Mangal Singh & Anr. Vs M/s.Khurana Chemicals) 2007(1) Civil Court Cases 715 (Rajasthan) : 2007(1) Criminal Court Cases 1031 (Rajasthan)
Negotiable Instruments Act, 1881, S.138, Evidence Act, 1872, Ss.45, 73, Criminal Procedure Code, 1973, Ss.397, 401 - Cheque - Signatures disputed - Defence evidence - Summoning of witnesses i.e. Bank Manager and hand-writing expert - One opportunity granted to produce the defence evidence. (Om Prakash Joshi Vs Radhey Shyam Bilochi) 2007(1) Criminal Court Cases 944 (Rajasthan)
Negotiable Instruments Act, 1881, S.138, General Clauses Act, 1897, S.27 - Dishonour of cheque - Notice - Sent as per registered post - Notice received by family member of drawer - No evidence led by drawer to prove that he did not receive notice through member of his family - Acquittal of accused on ground of want of service of notice is bad in law - Accused convicted. (Umraz Khan Vs A.Jameel Ahmed & Anr.) 2007(1) Civil Court Cases 433 (Karnataka) : 2007(1) Criminal Court Cases 768 (Karnataka)
Negotiable Instruments Act, 1881, S.138, General Clauses Act, 1897, S.27 - Dishonour of cheque - Notice - Sent by registered post at correct address - Notice if received back with postal endorsement that premises is found locked or the addressee is not available then notice is deemed to be served on the addressee unless addressee proves that he had no knowledge that notice was brought to his address. (C.C.Alavi Haji Vs Palapetty Muhammed & Anr.) 2007(2) Apex Court Judgments 526 (S.C.) : 2007(3) Civil Court Cases 001 (S.C.) : 2007(3) Criminal Court Cases 037 (S.C.)
Negotiable Instruments Act, 1881, S.138, Indian Penal Code, 1860, S.420 - Dishonour of cheque - Post dated cheque - Initiation of proceedings u/s 138 of the Act - Initiation of separate proceedings u/s 420 IPC for the offence of cheating is maintainable as it does not amount to double jeopardy. (V.Kannan Vs State by District Crime Branch, Namakkal ) 2007(4) Civil Court Cases 549 (Madras) : 2007(4) Criminal Court Cases 464 (Madras)
Negotiable Instruments Act, 1881, S.138, Indian Penal Code, 1860, Ss.68 & 69 - Dishonour of cheque - Compensation - In default to undergo imprisonment - Such default sentence shall lapse at any time when payment is made either before or after default sentence starts running. (Girish Vs Muthoot Capital Service (P) Ltd.) 2007(1) Civil Court Cases 436 (Kerala) : 2007(1) Criminal Court Cases 856 (Kerala)
Negotiable Instruments Act, 1881, Ss.138 & 139 - Dishonour of cheque - Presumption - Rebuttal - Standard of proof in discharge of the burden is preponderance of a probability - Inference can be drawn not only from the materials brought on record but also from the reference to the circumstances upon which the accused relies upon - Burden of proof on accused is not as high as that of the prosecution. (Kamala S.Vs Vidyadharan M.J. & Anr.) 2007(2) Apex Court Judgments 096 (S.C.) : 2007(2) Civil Court Cases 023 (S.C.) : 2007(2) Criminal Court Cases 219 (S.C.)
Negotiable Instruments Act, 1881, Ss.138 & 141 - Company - Dishonour of cheque - Notice given to company - Separate notice to Managing Director who signed the cheque on behalf of company is not required - Proceedings against Managing Director cannot be quashed. (Rajkumar Malhotra Vs Bhanwarlal) 2007(1) Civil Court Cases 466 (Rajasthan) : 2007(1) Criminal Court Cases 539 (Rajasthan)
Negotiable Instruments Act, 1881, Ss.138 & 141 - Dishonour of cheque - Company - Director - Evidence is not required to be pleaded but there has to be a basic averment as to how one is involved in the alleged crime. (Kapal Mehra Vs Indusind Enterprises and Finance Ltd.) 2007(4) Civil Court Cases 681 (Bombay) : 2007(4) Criminal Court Cases 967 (Bombay)
Negotiable Instruments Act, 1881, Ss.138 & 141 - Dishonour of cheque - Company - Director - No averment in complaint as to how and in what manner the Director was responsible for the conduct of business of Company or otherwise responsible to it in regard to its functioning - Held, even if allegations in complaint are taken to be correct in its entirety the same do not disclose any offence against the Director - Proceedings against Director quashed. (Saroj Kumar Poddar Vs State (NCT of Delhi) & Anr.) 2007(1) Apex Court Judgments 243 (S.C.) : 2007(1) Civil Court Cases 597 (S.C.) : 2007(1) Criminal Court Cases 842 (S.C.)
Negotiable Instruments Act, 1881, Ss.138 & 141 - Dishonour of cheque - Company - Mere fact that proceedings have been quashed against the accused will not prevent the Court from exercising its discretion if it is fully satisfied that a case for taking cognizance against him has been made out in the additional evidence led before it. (Kapal Mehra Vs Indusind Enterprises and Finance Ltd.) 2007(4) Civil Court Cases 681 (Bombay) : 2007(4) Criminal Court Cases 967 (Bombay)
Negotiable Instruments Act, 1881, Ss.138 & 141 - Dishonour of cheque - Proprietorship concern - An employee of a proprietorship concern cannot be proceeded against u/s 138 of the Act. (Raghu Lakshminarayanan Vs M/s Fine Tubes) 2007(2) Apex Court Judgments 001 (S.C.) : 2007(2) Civil Court Cases 641 (S.C.) : 2007(2) Criminal Court Cases 709 (S.C.)
Negotiable Instruments Act, 1881, Ss.138 and 141 - Dishonour of Cheque - Company - Complaint against company and its Directors - Specific averment has to be made in complaint that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company - This averment is an essential requirement of S.141 of the Act - Without this averment in complaint, requirement of S.141 cannot be said to be satisfied. (Luxmi Devi Vs Puran Chand) 2007(1) Civil Court Cases 026 (P&H) : 2007(1) Criminal Court Cases 033 (P&H)
Negotiable Instruments Act, 1881, Ss.138 and 141 - Dishonour of cheque - Company - Director - In order to bring a case within S.141 of the Act, complaint must disclose necessary facts which make a person liable. (Sunil Kumar Vs Nahata Fabrics) 2007(1) Criminal Court Cases 124 (Rajasthan)
Negotiable Instruments Act, 1881, Ss.138 and 141 - Dishonour of cheque - Company - Part time Director - No averment in complaint as to how petitioner was in control of the day-to-day business of the company or was in charge of and responsible to the company for the conduct of its business at the time of commission of offence - Petitioner not a signatory of the cheque - Proceedings against petitioner quashed. (O.P.Mehra Vs Raj Kumari Bhalla & Anr.) 2007(1) Criminal Court Cases 847 (P&H) : 2007(2) Civil Court Cases 181 (P&H)
Negotiable Instruments Act, 1881, Ss.138 and 141 - Dishonour of Cheque - Complaint against firm and its five partners - Averment in complaint that all the partners were incharge and responsible persons of the firm - No ground made out to quash the proceedings. (Luxmi Devi Vs Puran Chand) 2007(1) Civil Court Cases 026 (P&H) : 2007(1) Criminal Court Cases 033 (P&H)
Negotiable Instruments Act, 1881, Ss.138 and 141 - Dishonour of cheque - Partnership firm - Sleeping partner - Not liable - Mere fact that a partner has financial stake in the business of the firm is not sufficient in itself to attract culpable liability under S.141(1) of the Act - To attract culpable liability a partner must be in charge of and responsible to the firm to the conduct of its business. (K.K.Mohandas Vs M/s Jayasamudri Trading Co. & Anr.) 2007(1) Civil Court Cases 803 (Kerala) : 2007(1) Criminal Court Cases 300 (Kerala)
Negotiable Instruments Act, 1881, Ss.138 and 141, Criminal Procedure Code, 1972, S.482 - Dishonour of cheque - Company - Prosecution of Company, its Chairman, Managing Director and Director - Petitioner denied that he was ever Chairman of Company - No evidence except affidavit of complainant - Petitioner did not sign the cheque - Authentic and unimpeachable documents placed on record to show that petitioner was not Chairman of Company and inspite of opportunity granted
complainant did not controvert the same - Prima facie evidence shows that petitioner is not involved in the alleged offence and he cannot be held vicariously liable for the alleged offence committed by the Company - Summoning of petitioner quashed. (Shekhar Suman Vs Narender & Ors.) 2007(1) Civil Court Cases 685 (P&H) : 2007(1) Criminal Court Cases 769 (P&H)
Negotiable Instruments Act, 1881, Ss.138 and 141, Criminal Procedure Code, 1973, S.482 - - Dishonour of cheque - Company - Company and its Directors approached complainant for grant of loan - As per loan agreement Company issued three cheques, which were dishonoured - A2 M.D. of company and A3 to A6 its Directors - Plea to quash complaint on the ground that there was no proper averment and notice of offence was framed mechanically - If there are requisite averments in complaint under Ss.138 and 141 of N.I. Act then matter has to proceed for expeditious disposal and defence is to be raised before concerned Magistrate and is not to be considered in a petition under S.482 Cr.P.C. - No interference called for. (G.S.Saluja Vs IFCI Venture Capital Funds Ltd.) 2007(1) Civil Court Cases 620 (Delhi)
Negotiable Instruments Act, 1881, Ss.138 and 141, Criminal Procedure Code, 1973, S.482 - Dishonour of cheque - Company - Director - Quashing of proceedings - Quashing sought on ground that disputed cheques were signed by non-petitioner No.3 on behalf of company and not by petitioner - Liability arises on account of conduct, act or omission on part of a person and not merely on account of holding an office or a position in a company - Absence of any specific material on record for fastening liability under S.141 of N.I. Act - Order taking cognizance qua petitioner could not be sustained only on ground that petitioner was director of company - Impugned order passed by trial Court, quashed. (Sunil Kumar Vs Nahata Fabrics) 2007(1) Criminal Court Cases 124 (Rajasthan)
Negotiable Instruments Act, 1881, Ss.138 and 147, Criminal Procedure Code, 1973, Ss.219 and 220(1) - Dishonour of cheque - Accused issued 16 cheques of different dates in discharge of liability - All the cheques dishonoured - Single notice issued - One complaint in respect of 16 cheques is maintainable. (Manjula Vs M/s Colgate Palmolive (India) Limited) 2007(3) Criminal Court Cases 601 (Madras) (DB)
Negotiable Instruments Act, 1881, Ss.138 and 147, Criminal Procedure Code, Ss.219 and 220(1) - - Dishonour of cheque - Part of same transaction - Accused issued 16 cheques in discharge of liability - All the cheques dishonoured - Offences committed by same person in respect of 16 cheques must be held to be part of same transaction - One complaint in respect of 16 cheques is maintainable. (Manjula Vs M/s Colgate Palmolive (India) Limited) 2007(3) Criminal Court Cases 601 (Madras) (DB)
Negotiable Instruments Act, 1881, Ss.138, 139 - Blank cheque - It cannot be presumed that an implied authority is given to the holder of the cheque to fill it up towards discharge of a debt etc. - There must be allegation in complaint and evidence that blank cheque was issued with implied authority to holder to fill up the same. (Kamalammal Vs C.K.Mohanan & Anr.) 2007(3) Civil Court Cases 237 (Kerala) : 2007(3) Criminal Court Cases 168 (Kerala)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Blank cheque - Even if the signature in the cheque is admitted there is no presumption available that it is executed by the accused. (Kamalammal Vs C.K.Mohanan & Anr.) 2007(3) Civil Court Cases 237 (Kerala) : 2007(3) Criminal Court Cases 168 (Kerala)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Cheque issued against loan - Loan denied - No proof of lending money - Even month or year of loan not disclosed - Held, when complainant does not place on record any material of lending money then it is sufficient to infer that accused is able to rebut the presumption available in favour of the complainant - Accused not guilty of offence u/s 138 of the Act. (G.Veeresham Vs S.Shiva Shankar & Anr.) 2007(4) Civil Court Cases 532 (A.P.) : 2007(4) Criminal Court Cases 547 (A.P.)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Cheque issued towards time barred debt - Once the cheque is issued, accused cannot contend that it is not in respect of legally enforceable debt - Time barred debt is also valid consideration. (S.Parameshwarappa & Anr. Vs S.Choodappa) 2007(2) Civil Court Cases 763 (Karnataka) : 2007(2) Criminal Court Cases 592 (Karnataka)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Consideration - Cheque issued towards investment in one of the complainants' Fixed Deposit Schemes - Cheque is issued without consideration or that it was not issued towards the discharge of any debt or liability - Order by Revisional Court setting aside the order issuing process cannot be faulted with. (Travel Force Vs Mohan N.Bhave & Anr.) 2007(2) Criminal Court Cases 955 (Bombay) : 2007(3) Civil Court Cases 472 (Bombay)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Denial of issuance of cheque - Held, once cheque is duly singed by accused, mere denial of issuing cheque is not sufficient to rebut the presumption available u/s 139 of the Act. (J.Ramaraj Vs IIiyaz Khan) 2007(2) Civil Court Cases 458 (Karnataka) : 2007(2) Criminal Court Cases 726 (Karnataka)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Discharging of liability - Blank signed cheque given as security not taken back - No explanation as to why acknowledgment/voucher not taken when liability was discharged - Plea of discharge is so fragile and brittle that it must fall to the ground as improbable and unacceptable. (K.P.Rathikumar Vs N.K.Santhamma & Anr.) 2007(4) Civil Court Cases 546 (Kerala) : 2007(4) Criminal Court Cases 343 (Kerala)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Legally enforceable debt - Cheque issued to retiring partner - Specific plea of accused that complainant is still a partner - Evidence
as to retirement from partnership not adduced - When there is failure to prove factum of retirement from partnership the only reasonable conclusion could be that there was no existing liability as on date of issuance of cheque - No interference in order of acquittal. (K.A.Prakash Rao Vs U.Indira Devi & Ors.) 2007(1) Civil Court Cases 483 (A.P.) : 2007(1) Criminal Court Cases 518 (A.P.)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Presumption - In a complaint u/s 138 of the Act, Court has to presume that the cheque had been issued for a debt or liability - The presumption is rebuttable - The burden of proving that the cheque had not been issued in discharge of a debt or liability is on the accused. (R.Sivaraman Vs State of Kerala & Ors.) 2007(3) Civil Court Cases 618 (Kerala) : 2007(3) Criminal Court Cases 419 (Kerala)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Presumption - It is for drawer to rebut presumption - In absence of rebuttal evidence, it is to be presumed that cheque was issued for discharge of debt or other liability. (Jayamma Vs Lingamma) 2007(3) Civil Court Cases 466 (Karnataka) : 2007(3) Criminal Court Cases 287 (Karnataka)
Negotiable Instruments Act, 1881, Ss.138, 139 - Dishonour of cheque - Time barred debt - Loan transaction taking place in 1994 and cheque for repayment of loan issued for the year 1999 - Loan amount became time barred in the year 1997 - Held, there is no legal bar for the debtor agreeing to pay the time barred debt - No fresh consideration is required for debtor's promise to pay the time barred debt - Cheque constitutes an agreement or promise by the debtor to pay the time barred debt - Drawer held guilty of offence. (H.Narasimha Rao Vs Venkataram R.) 2007(1) Civil Court Cases 670 (Karnataka) : 2007(1) Criminal Court Cases 975 (Karnataka)
Negotiable Instruments Act, 1881, Ss.138, 139 & 118(a) - Dishonour of cheque - Presumption u/ss 139 & 118(a) are rebuttable ones - Presumption whether stood rebutted or not depends upon the facts and circumstances of each case. (Kamala S.Vs Vidyadharan M.J. & Anr.) 2007(2) Apex Court Judgments 096 (S.C.) : 2007(2) Civil Court Cases 023 (S.C.) : 2007(2) Criminal Court Cases 219 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Company - Directors - A person is entitled to presume that directors of the company are incharge of the affairs of the company - If any restrictions on their powers are placed by the memorandum or articles of the company, it is for the directors to establish it at the trial. (N.Rangachari Vs Bharat Sanchar Nigam Limited) 2007(2) Apex Court Judgments 540 (S.C.) : 2007(3) Civil Court Cases 206 (S.C.) : 2007(3) Criminal Court Cases 213 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Company - Directors - Liability - Pleading - There should be an assertion in the complaint that the named accused are directors of the company and that they are incharge of and responsible to the company for the conduct of the business of the company. (N.Rangachari Vs Bharat Sanchar Nigam Limited) 2007(2) Apex Court Judgments 540 (S.C.) : 2007(3) Civil Court Cases 206 (S.C.) : 2007(3) Criminal Court Cases 213 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Company - When the offender is a company, every person, who at the time when the offence was committed was incharge of and was responsible to the company for the conduct of the business of the company, shall also be deemed to be guilty of the offence along with the company. (N.Rangachari Vs Bharat Sanchar Nigam Limited) 2007(2) Apex Court Judgments 540 (S.C.) : 2007(3) Civil Court Cases 206 (S.C.) : 2007(3) Criminal Court Cases 213 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Co-operative Society - Secretary signatory of cheque - Signatory of cheque if ceases to be Secretary on the date when offence was committed cannot be prosecuted u/s 138 of the Act - Crucial date for determining date when offence was committed is when cheque is returned by the bank unpaid - A person can be prosecuted for offence u/s 138 only if at the time the offence was committed he was in charge of and responsible to the company for the conduct of business of the company. (Kairali Marketing & Processing Co-op.Society Ltd. Vs Pullengadi Service Co-op. Society Ltd.) 2007(1) Civil Court Cases 624 (Kerala) : 2007(1) Criminal Court Cases 1060 (Kerala)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Agent - Petitioner neither a director, manager, secretary or other officer of the company - Petitioner not incharge or responsible for the conduct of the business of the company - Petitioner may have handled transactions for and on behalf of the company in India - This does not bring petitioner within the purview of S.141 of the Act - Summoning order qua petitioner quashed. (Birthe Foster Vs State & Anr.) 2007(3) Civil Court Cases 075 (Delhi) : 2007(3) Criminal Court Cases 026 (Delhi)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Director - Allegations in complaint that respondent accused Nos.2 to 12 were Directors/persons responsible for carrying out business of company and the liability of accused persons was joint and several - High Court held that there is no clear averment or evidence to show that respondents were incharge or responsible to company for conduct of its business and quashed proceedings against respondents - No reason to interfere. (N.K.Wahi Vs Shekar Singh & Ors.) 2007(2) Civil Court Cases 177 (S.C.) : 2007(2) Criminal Court Cases 250 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Director - Only such person is liable if at the time when offence is committed he was incharge and was responsible to the company for the conduct of the business of the company. (N.K.Wahi Vs Shekar Singh & Ors.) 2007(2) Civil Court Cases 177 (S.C.) : 2007(2) Criminal Court Cases 250 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Director - The liability of a Director must be determined on the date on which the offence is committed. (S.M.S.Pharmaceutical Ltd. Vs Neeta Bhalla & Anr.) 2007(1) Apex Court Judgments 668 (S.C.) : 2007(2) Civil Court Cases 127 (S.C.) : 2007(2) Criminal Court Cases 026 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Director - There should be a specific allegation in the complaint as to the part played by a Director in the transaction - There should be clear and unambiguous allegation as to how the Directors are incharge and responsible for the conduct of the business of the company - Description should be clear - In absence of any averment or specific evidence the complaint is not entertainable. (N.K.Wahi Vs Shekar Singh & Ors.) 2007(2) Civil Court Cases 177 (S.C.) : 2007(2) Criminal Court Cases 250 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Director - Vicarious liability - Sufficient averments should be made to make a Director vicariously liable for an offence committed by the Company that he was in charge and responsible to the Company for the conduct of its business - Such requirement must be read conjointly and not disjunctively. (S.M.S.Pharmaceutical Ltd. Vs Neeta Bhalla & Anr.) 2007(1) Apex Court Judgments 668 (S.C.) : 2007(2) Civil Court Cases 127 (S.C.) : 2007(2) Criminal Court Cases 026 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Directors - Question as to whether a person was in charge of and was responsible to the company for the conduct of the business at the relevant paint of time is to be adjudicated during the course of trial, based on the materials placed before the Trial Court by the parties. (M.K.Bajoria, Director, Marshall Sons & Co. (Mfg.) Ltd. & Ors. Vs M/s.Lalith Steel Suppliers) 2007(3) Criminal Court Cases 179 (Madras)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Directors - There should be a specific averment in the complaint that the persons sought to be made liable was in charge of and responsible for the conduct of the business of the company at the relevant point of time, as the directors in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. (M.K.Bajoria, Director, Marshall Sons & Co. (Mfg.) Ltd. & Ors. Vs M/s.Lalith Steel Suppliers) 2007(3) Criminal Court Cases 179 (Madras)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Nominated Director - Director nominated by IDBI as financial assistance extended to company - IDBI a financial institution controlled by Central Govt. - Director nominated by a Central Government or State Government or a Financial Corporation owned or controlled by Central Government or State Government cannot be prosecuted for dishonour of cheque - Proceedings against petitioner quashed. (V.K.Saxena Vs State) 2007(1) Civil Court Cases 590 (Delhi) : 2007(1) Criminal Court Cases 822 (Delhi)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Notice - Prosecution of person incharge and responsible for the conduct of business of the company - Notice to company - Director or person incharge and responsible for the conduct of business of company cannot be prosecuted when notice is not issued to him - Statutory notice to every person, including Director, who is sought to be prosecuted is mandatory. (B.Raman & Ors. Vs Shasun Chemicals & Drugs Ltd.) 2007(2) Criminal Court Cases 878 (Madras) (DB) : 2007(3) Civil Court Cases 037 (Madras) (DB)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Notice - Prosecution of person incharge and responsible for the conduct of business of the company - Statutory notice to every person, including Director, who is sought to be prosecuted, is mandatory. (B.Raman & Ors. Vs Shasun Chemicals & Drugs Ltd.) 2007(2) Criminal Court Cases 878 (Madras) (DB) : 2007(3) Civil Court Cases 037 (Madras) (DB)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Persons sought to be made criminally liable - Liability arises from being in-charge of and responsible for conduct of business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. (Kapal Mehra Vs Indusind Enterprises and Finance Ltd.) 2007(4) Civil Court Cases 681 (Bombay) : 2007(4) Criminal Court Cases 967 (Bombay)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Company - Vicarious liability - Complaint must contain requisite averments to bring about a case within the purview of S.141 of the Act so as to make some persons other than company vicariously liable therefor. (Raghu Lakshminarayanan Vs M/s Fine Tubes) 2007(2) Apex Court Judgments 001 (S.C.) : 2007(2) Civil Court Cases 641 (S.C.) : 2007(2) Criminal Court Cases 709 (S.C.)
Negotiable Instruments Act, 1881, Ss.138, 141 - Dishonour of cheque - Notice sent - Accused sent a reply - Complaint filed but no mention made of reply notice in the complaint nor in sworn statement - Not a ground to quash complaint. (M.K.Bajoria, Director, Marshall Sons & Co. (Mfg.) Ltd. & Ors. Vs M/s.Lalith Steel Suppliers) 2007(3) Criminal Court Cases 179 (Madras)
Negotiable Instruments Act, 1881, Ss.138, 141, Criminal Procedure Code, 1973, S.482 - Dishonour of cheque - Company - It is necessary to specifically aver in complaint that at the time offence was committed, the person accused was in-charge of and responsible for conduct of business of company - Without such an averment in complaint the requirement of S.141 cannot be said to be satisfied - No such averment in complaint - Complaint qua petitioner quashed. (Hazi Abadullah & Ors. Vs State of Rajasthan & Anr.) 2007(1) Criminal Court Cases 393 (Rajasthan) : 2007(2) Civil Court Cases 110 (Rajasthan)
Negotiable Instruments Act, 1881, Ss.138, 142 - Dishonour of cheque - Company - Summoning order on basis of Affidavit - Non examination of the concerned official who deposed in support of the complainant - Summoning order quashed - Matter remitted for reconsideration. (T.C.I. Infrastructure (Fina) Vs Housing And Urban Dev. Corp.) 2007(4) Civil Court Cases 347 (Delhi) : 2007(4) Criminal Court Cases 446 (Delhi)
Negotiable Instruments Act, 1881, Ss.138, 142 - Dishonour of cheque - Complaint - Delay - Cannot be condoned without notice to accused. (Sajjan Kumar Jhunjhunwala & Ors. Vs M/s.Eastern Roadways Pvt.Ltd.) 2007(3) Civil Court Cases 203 (Karnataka) : 2007(3) Criminal Court Cases 103 (Karnataka)
Negotiable Instruments Act, 1881, Ss.138, 142 - Dishonour of cheque - Complaint beyond period of limitation - Court can take cognizance on sufficient cause - Amendment in provision of S.142 of the Act is retrospective in nature and is applicable to pending cases. (Kumudben Jayantilal Mistry Vs State of Gujarat & Anr.) 2007(3) Criminal Court Cases 631 (Gujarat) : 2007(4) Civil Court Cases 535 (Gujarat)
Negotiable Instruments Act, 1881, Ss.138, 142 - Dishonour of cheque - Co-operative Society - President on behalf of Society can file complaint. (Madan Lal Verma Vs A.S.Ranga) 2007(2) Civil Court Cases 399 (P&H) : 2007(2) Criminal Court Cases 675 (P&H)
Negotiable Instruments Act, 1881, Ss.138, 142(a) - Dishonour of cheque - Company - Complaint by one of its Directors - Complaint filed by Director without authorisation from Board of Directors - Held, on such a complaint no process can be issued much less a conviction imposed. (Ashok Bampto Pagui Vs Agencia Real Canacona Pvt. Ltd. & Anr.) 2007(4) Civil Court Cases 808 (Bombay) : 2007(4) Criminal Court Cases 868 (Bombay)
Negotiable Instruments Act, 1881, Ss.138, 142(b) - Dishonour of cheque - Delay in filing complaint - Cognizance wrongly taken - Accused discharged. (Birendra Kumar Singh Vs State of Bihar & Anr.) 2007(4) Criminal Court Cases 884 (Patna)
Negotiable Instruments Act, 1881, Ss.138, 142(b) (As amended), Limitation Act, 1963, S.5 - Dishonour of cheque - Complaint - Limitation - Filing of complaint after period of limitation - It is open to Court to take cognizance of complaint made after prescribed period, if complainant satisfies Court that he had sufficient cause for not making complaint within prescribed period. (Ranjitha Balasubramanian & Anr. Vs Shanthi Group, Bangalore & Ors.) 2007(2) Civil Court Cases 362 (Karnataka) : 2007(2) Criminal Court Cases 475 (Karnataka)
Negotiable Instruments Act, 1881, Ss.138, 142, 145 - Dishonour of cheque - Complaint - Magistrate is obliged and duty bound to examine upon oath the complainant and his witnesses before issuance of process though there is a solemn affirmation at the foot of the complaint by the complainant. (Maharaja Developers & Anr. Vs Udaysingh Pratapsinghrao Bhonsle & Anr.) 2007(3) Criminal Court Cases 465 (Bombay) (DB) : 2007(4) Civil Court Cases 212 (Bombay) (DB)
Negotiable Instruments Act, 1881, Ss.138, 142, 145, Criminal Procedure Code, 1973, S.204 - Dishonour of cheque - Complaint - Issuance of process - Provision of S.200 Cr.P.C. applies. (Maharaja
Developers & Anr. Vs Udaysingh Pratapsinghrao Bhonsle & Anr.) 2007(3) Criminal Court Cases 465 (Bombay) (DB) : 2007(4) Civil Court Cases 212 (Bombay) (DB)
Negotiable Instruments Act, 1881, Ss.138, 143 (As amended) - Dishonour of cheque - Fine exceeding Rs.5,000/- can be imposed in view of amended provision of S.143 of the Act. (Rajendra B.Choudhari Vs State of Maharashtra & Anr.) 2007(2) Civil Court Cases 523 (Bombay) (DB)
Negotiable Instruments Act, 1881, Ss.138, 143 (As amended) Dishonour of cheque - Fine exceeding Rs.5,000/- can be imposed in view of amended provision of S.143 of the Act. (Rajendra B.Choudhari Vs State of Maharashtra & Anr.) 2007(2) Criminal Court Cases 748 (Bombay) (DB)
Negotiable Instruments Act, 1881, Ss.138, 147 - Offence u/s 138 is compoundable without permission of Court. (Sabu George & etc. Vs Home Secretary, Department of Home Affairs, New Delhi & Anr.) 2007(4) Criminal Court Cases 419 (Kerala)
Negotiable Instruments Act, 1881, Ss.138, 147, Criminal Procedure Code, 1973, Ss.320 and 401 - Dishonour of cheque - Conviction - Revision against - Compounding of offence - Compounding of offence under S.138 NI Act can be done during trial of case as well as by the High Court or Court or Session while acting in exercise of its power of revision under S.401 Cr.P.C. (Ramesh Chander Vs State of Haryana & Anr.) 2007(2) Civil Court Cases 439 (P&H) : 2007(2) Criminal Court Cases 351 (P&H)
Negotiable Instruments Act, 1881, Ss.138, 147, Criminal Procedure Code, 1973, Ss.320, 362 - Compounding of offence after verdict of conviction and sentence becomes final - In such a case High Court can exercise its power u/s 482 Cr.P.C. as also under Article 226 and 227 of Constitution - In such a case power u/s 482 Cr.P.C. can be invoked after disposal of revision notwithstanding the bar u/s 362 Cr.P.C. (Sabu George & etc. Vs Home Secretary, Department of Home Affairs, New Delhi & Anr.) 2007(4) Criminal Court Cases 419 (Kerala)
Negotiable Instruments Act, 1881, Ss.138, 20 - Dishonour of cheque - Blank cheque - It is open to a person to sign and deliver a blank or incomplete cheque and is equally open for the holder of cheque to fill up blanks and specify the amount therein. (Purushottam Vs Manohar K.Deshmukh & Anr.) 2007(1) Criminal Court Cases 682 (Bombay) : 2007(1) Civil Court Cases 423 (Bombay)
Negotiable Instruments Act, 1881, Ss.138, 20 - Dishonour of cheque - Undated cheque - When a drawer deliver a signed cheque, he gives an authority to the holder to put a date of his choice. (Purushottam Vs Manohar K.Deshmukh & Anr.) 2007(1) Criminal Court Cases 682 (Bombay) : 2007(1) Civil Court Cases 423 (Bombay)
Negotiable Instruments Act, 1881, Ss.138, 30 - Dishonour of cheque - Compensation - When dishonour of cheque takes place, certainly the holder is entitled to be compensated. (Sathyan Ayyappa Sathyan Vs Yousu & Anr.) 2007(3) Civil Court Cases 639 (Kerala) : 2007(3) Criminal Court Cases 889 (Kerala)
Negotiable Instruments Act, 1881, Ss.138, 43 - Dishonour of cheque - Lending of money - Cheque issued before amount given by complainant - Cheque is one issued in discharge of the debt or liability coming u/s 138 of the Act - However, in case cheque is issued in anticipation of lending money but money is not given to the borrower then consideration fails and S.43 of the Act comes into play. (George Vs Kamarudeen) 2007(2) Civil Court Cases 112 (Kerala) : 2007(2) Criminal Court Cases 278 (Kerala)
Negotiable Instruments Act, 1881, Ss.139, 118 - Dishonour of cheque - Presumption - Cheque issued to discharge liability under a promissory note - When presumption u/s 139 can be drawn it is superfluous and unnecessary to draw or bank on the presumption u/s 118 of the Act - As the graver presumption of existence of consideration of a specified variety, is available it is not necessary at all to go back to the presumption u/s 118(a) of the Act. (P.N.Gopinathan Vs Sivadasan & Anr.) 2007(1) Civil Court Cases 729 (Kerala) : 2007(1) Criminal Court Cases 1077 (Kerala)
Negotiable Instruments Act, 1881, Ss.139, 138, 118 - Dishonour of cheque - Cheque issued to discharge liability under a promissory note - Presumption under Ss.118 and 139 can be invoked when cheque is issued for discharge of a liability already existing under the promissory note. (P.N.Gopinathan Vs Sivadasan & Anr.) 2007(1) Civil Court Cases 729 (Kerala) : 2007(1) Criminal Court Cases 1077 (Kerala)
Negotiable Instruments Act, 1881, S.139 - Dishonour of cheque - Legally enforceable debt - Cheque is a promise made in writing to pay certain sum - There is a legally enforceable liability. (Purushottam Vs Manohar K.Deshmukh & Anr.) 2007(1) Criminal Court Cases 682 (Bombay) : 2007(1) Civil Court Cases 423 (Bombay)
Negotiable Instruments Act, 1881, S.139 - Dishonour of cheque - Presumption - Available only till contrary is proved by the accused - A fact is said to be proved when the court on a consideration of the matters before it believes in its existence or considers its existence so probable that a prudent man ought to proceed under the circumstances of the particular case on the supposition that such fact exists. (Johnson Scaria Vs State of Kerala) 2007(1) Civil Court Cases 196 (Kerala) : 2007(1) Criminal Court Cases 161 (Kerala)
Negotiable Instruments Act, 1881, S.139 - Dishonour of cheque - Presumption - Rebuttal - Theory of handing over a blank signed cheque as security - Burden rests squarely and heavily on the indictee
who wants to attribute to himself such an improbable and artificial conduct to claim exculpation from lability - The silence and inaction of accused on receipt of demand notice and his omission to raise the contentions now raised are vital and crucial significance when a court tries to evaluate the acceptability of the contention adopting the yardstick of a prudent man. (Aniyan Thomas Chacko Vs The Varvelil Bankers & Anr.) 2007(1) Civil Court Cases 262 (Kerala) : 2007(1) Criminal Court Cases 236 (Kerala)
Negotiable Instruments Act, 1881, S.139 - Dishonour of cheque - Rebuttal of presumption - Onus is not as heavy as that of prosecution and may be compared with defendant in Civil Case - Rebuttal of presumption contemplated u/s 139 requires only probable defence and standard of proof is preponderance of probabilities. (Lakshmi Srinivas Savings & Chit Funds Syndicate Pvt. Ltd. Vs S.Bhojarajan) 2007(2) Civil Court Cases 803 (Madras) : 2007(2) Criminal Court Cases 562 (Madras)
Negotiable Instruments Act, 1881, S.139 - Dishonour of cheque - To draw presumption under S.139 of the act complainant has to prove execution and issue of cheque - Admission of signature in a cheque goes a long way to prove due execution - Possession of the cheque by the complainant similarly goes a long way to prove issue of the cheque. (Johnson Scaria Vs State of Kerala) 2007(1) Civil Court Cases 196 (Kerala) : 2007(1) Criminal Court Cases 161 (Kerala)
Negotiable Instruments Act, 1881, S.139 - Presumption - Available only qua the purpose for which the cheque is received i.e for discharge of a debt or liability - Court cannot presume that cheque is issued/executed/drawn by the accused. (Kamalammal Vs C.K.Mohanan & Anr.) 2007(3) Civil Court Cases 237 (Kerala) : 2007(3) Criminal Court Cases 168 (Kerala)
Negotiable Instruments Act, 1881, S.139 - Presumption - Available only when cheque is received by holder - Cheque can be received in many ways i.e it can be handed over, it could be as a finder of a lost or misplaced cheque, it could be taken away by force, it could be by committing theft - Held, for drawing presumption u/s 139 of the Act, Court must be satisfied that the holder of the cheque "received" the cheque by entitlement and that he did not procure it by any other means. (Kamalammal Vs C.K.Mohanan & Anr.) 2007(3) Civil Court Cases 237 (Kerala) : 2007(3) Criminal Court Cases 168 (Kerala)
Negotiable Instruments Act, 1881, S.139 - Presumption - Available only when three conditions are satisfied viz. (1) that the person in whose favour the presumption is drawn is the holder of the cheque; (2) that the cheque is of the nature stated in section 138 of the Act; (3) that such cheques is "received" by the holder. (Kamalammal Vs C.K.Mohanan & Anr.) 2007(3) Civil Court Cases 237 (Kerala) : 2007(3) Criminal Court Cases 168 (Kerala)
Negotiable Instruments Act, 1881, S.139 - Presumption - Burden to prove - If the holder of cheque has to avail of the benefit of the presumption under section 139 of the Act, the burden is on him to
establish all the pre-requisites for drawing such presumption. (Kamalammal Vs C.K.Mohanan & Anr.) 2007(3) Civil Court Cases 237 (Kerala) : 2007(3) Criminal Court Cases 168 (Kerala)
Negotiable Instruments Act, 1881, S.139 - Presumption - Rebuttal - Complainant not coming to Court with clean hands and his conduct not that of a prudent man - Accused thus discharges his burden to rebut the presumption available u/s 139 of the Act - Order of acquittal upheld. (John K.John Vs Tom Varghese & Anr.) 2007(3) Apex Court Judgments 655 (S.C.) : 2007(4) Civil Court Cases 690 (S.C.) : 2007(4) Criminal Court Cases 974 (S.C.)
Negotiable Instruments Act, 1881, S.139 - Presumption - Rebuttal - Presumption need not be rebutted only by leading defence evidence - Presumption can be rebutted even on the basis of fact elicited in the cross examination of the complainant. (M.Senguttuvan Vs Mahadevaswamy) 2007(3) Civil Court Cases 687 (Karnataka) : 2007(3) Criminal Court Cases 337 (Karnataka)
Negotiable Instruments Act, 1881, S.139 - Presumption - Rebuttal - Standard of proof on accused is only mere preponderance of probability - Where in a case complainant fails to prove that he had means to advance a huge amount as he himself had been borrowing money from others, the burden placed on accused stands discharged inspite of the fact that accused himself having not been examined as a witness - Accused acquitted. (K.Prakashan Vs P.K.Surenderan) 2007(3) Apex Court Judgments 429 (S.C.) : 2007(4) Civil Court Cases 713 (S.C.) : 2007(4) Criminal Court Cases 371 (S.C.)
Negotiable Instruments Act, 1881, S.139, Evidence Act, 1872, S.105 - Dishonour of cheque - Presumption under S.139 of the Act - Rebuttal - Discharge of burden - To lead evidence is not necessary to discharge the burden - Accused can rely on the broad improbabilities in the case of the prosecution, the improbabilities in the evidence of the witnesses of the prosecution, the acceptability of suggestions made to the prosecution witnesses in the course of cross examination as also defence evidence if any - All circumstances which he as an accused could have relied on to discharge his burden under S.105 of the Evidence Act can be made use of by him to discharge the burden under S.139 of the N.I. Act also. (Johnson Scaria Vs State of Kerala) 2007(1) Civil Court Cases 196 (Kerala) : 2007(1) Criminal Court Cases 161 (Kerala)
Negotiable Instruments Act, 1881, Ss.142, 138 - Dishonour of cheque - Condonation of delay - An application or affidavit in support of application for condonation of delay is not necessary - Sufficient cause can be shown in the complaint itself or in the application for condonation of delay or in the affidavit, if any, or in other materials which would be sufficient to satisfy the Court that the complainant had sufficient cause for not filing the complaint within the specified period. (Abdurehiman Vs Sethu Madhavan) 2007(1) Civil Court Cases 240 (Kerala) (DB)
Negotiable Instruments Act, 1881, Ss.142, 138 - Dishonour of cheque - Condonation of delay - If there is a delay in filing complaint Court should give notice to the respondent and after hearing the
respondent Court should satisfy itself as to whether complainant had sufficient cause for not making the complaint within the specified period - A detailed inquiry giving opportunity to the parties to adduce oral evidence is not necessary at the stage of taking cognizance to decide whether delay deserves to be condoned under S.142 of the Act. (Abdurehiman Vs Sethu Madhavan) 2007(1) Civil Court Cases 240 (Kerala) (DB)
This is a sample letter notifying a customer that his check has bounced and asking the customer to make good on the check.
NOTICE OF DISHONORED CHECK
[LETTERHEAD]
[Date]
[Customer's Name and Address]
Re: Notice of Dishonored Check
Dear ___________________:
I am sorry to report that your check number #_____________ in the amount of $__________________ has been returned to us by the bank for insufficient funds.
This may be the result of a simple error. However, we must insist that you replace the insufficient funds check immediately, and in no event later than ___________________, 20__. Therefore, please bring or send to our office [a certified check], [replacement check<] in the amount of $_______________ plus $_______________ to cover the insufficient funds charge....
Cheque
Example of a Canadian cheque.
Example of a U.S. dollar cheque issued by a Canadian bank.
Example of a British cheque. The cheque is crossed, which means that it can only be paid into a bank account, not to cash. Cheques issued in other Commonwealth countries are similar.
Example of a South Korean cheque, where the payee and signature are on the reverse sideA cheque (or check — USA) is a negotiable instrument[1] instructing a financial institution to pay a specific amount of a specific currency from a specified demand account held in the maker/depositor's name with that institution. Both the maker and payee may be natural persons or legal entities.
Etymology and spellingThe most common spellings of the word (in all its senses) were check, checque, and cheque from the 1600s through the 1900s.[2] Since the 1800s, the spelling cheque has become standard for the financial sense of the word in British English (across the Commonwealth countries), while only check is retained in its other senses, thus distinguishing the two definitions in writing.[3] Sources indicate that cheque comes from the Arabic ṣakk, which is a written document or letter or note of credit Muslim merchants adopted to carry out their trading. The concept of ṣakk appeared in European documents around 1220, mostly in areas neighbouring Muslim Spain and North Africa; south France and Italy.[4]
On the other hand, check remains in use for the financial sense in American English.
HistoryThe ancient Romans are believed[5] to have used an early form of cheque known as praescriptiones in the first century BC. During the 3rd century AD, banks in Persia and other territories in the Persian Empire under the Sassanid Empire issued letters of credit known as Ṣakks.
Between 1118 and 1307, it is believed the Knights Templar introduced a cheque system for pilgrims travelling to the Holy Land or across Europe.[6] The pilgrims would deposit funds at one chapter house, then withdraw it from another chapter at their destination by showing a draft of their claim. These drafts would be written in a very complicated code only the Templars could decipher. The Knights adopted it most likely from the Muslims who are known to have used the cheque or ṣakk system since the times of Harun al-Rashid (9th century).
In the 9th century, a Muslim businessman could cash an early form of the cheque in China drawn on sources in Baghdad,[7] a tradition that was significantly strengthened in the 13th and 14th centuries, during the Mongol Empire. Indeed, fragments found in the Cairo Geniza indicate that in the 12th century cheques remarkably similar to our own were in use, only smaller to save costs on the paper. They contain
a sum to be paid and then the order "May so and so pay the bearer such and such an amount". The date and name of the issuer are also apparent.
The cheque had its origins in the ancient banking system, in which bankers would issue orders at the request of their customers, to pay money to identified payees. Such an order was referred to as a bill of exchange. The use of bills of exchange facilitated trade by eliminating the need for merchants to carry large quantities of currency (e.g. gold) to purchase goods and services. A draft is a bill of exchange which is not payable on demand of the payee. (However, draft in the U.S. Uniform Commercial Code today means any bill of exchange, whether payable on demand or at a later date; if payable on demand it is a "demand draft", or if drawn on a financial institution, a cheque.)
Parts of a cheque
Cheques generally contain:
place of issue cheque number date of issue payee amount of currency signature of the drawer routing / account number in MICR format - in the U.S., the routing number is a nine-digit number
in which the first 4 digits identifies the U.S. Federal Reserve Bank's cheque-processing center. This is followed by digits 5 through 8, identifying the specific bank served by that cheque-processing center. Digit 9 is a verification digit, computed using a complex algorithm of the previous 8 digits. The account number is assigned independently by the various banks.[8]
fractional routing number (U.S. only) - also known as the transit number, consists of a denominator mirroring the first 4 digits of the routing number. And a hyphenated numerator, also known as the ABA number, in which the first part is a city code (1-49), if the account is in one of 49 specific cities, or a state code (50-99) if it is not in one of those specific cities; the second part of the hyphenated numerator mirrors the 5th through 8th digits of the routing number with leading zeros removed.[9]
A cheque is generally valid indefinitely or for six months after the date of issue unless otherwise indicated; this varies depending on where the cheque is drawn. In Australia, for example, it is fifteen months [10]. Legal amount (amount in words) is also highly recommended but not strictly required.
In the USA and some other countries, cheques contain a memo line where the purpose of the cheque can be indicated as a convenience without affecting the official parts of the cheque. This is not used in Britain where such notes are often written on the reverse side.
Types of cheques in the United StatesIn the United States, cheques are governed by Article 3 of the Uniform Commercial Code.
An order check – the most common form in the United States – is payable only to the named payee or his or her endorsee, as it usually contains the language "Pay to the order of (name)."
A bearer check is payable to anyone who is in possession of the document: this would be the case if the cheque does not state a payee, or is payable to "bearer" or to "cash" or "to the order of cash", or if the cheque is payable to someone who is not a person or legal entity, e.g. if the payee line is marked "Happy Birthday".
A counter check is a bank cheque given to customers who have run out of cheques or whose cheques are not yet available. It is often left blank, and is used for purposes of withdrawal.
In the United States, the terminology for a cheque historically varied with the type of financial institution on which it is drawn. In the case of a savings and loan association it was a negotiable order of withdrawal; if a credit union it was a share draft. Check as such were associated with chartered commercial banks. However, common usage has increasingly conformed to more recent versions of Article 3, where check means any or all of these negotiable instruments. Certain types of cheques drawn on a government agency, especially payroll cheques, may also be referred to as a payroll warrant.
Usage
A cheque is a cheque no matter how small.Parties to regular cheques generally include a maker or drawer, the depositor writing a cheque; a drawee, the financial institution where the cheque can be presented for payment; and a payee, the entity to whom the maker issues the cheque. The drawer drafts or draws a cheque, which is also called cutting a cheque, especially in the United States.
Ultimately, there is also at least one endorsee which would typically be the financial institution servicing the payee's account, or in some circumstances may be a third party to whom the payee owes or wishes to give money.
A payee that accepts a cheque will typically deposit it in an account at the payee's bank, and have the bank process the cheque. In some cases, the payee will take the cheque to a branch of the drawee bank, and cash the cheque there. If a cheque is refused at the drawee bank (or the drawee bank returns the cheque to the bank that it was deposited at) because there are insufficient funds for the cheque to clear, it is said that the cheque has bounced. Once a cheque is approved and all appropriate accounts involved have been credited, the cheque is stamped with some kind of cancellation mark, such as a "paid" stamp.
The cheque is now a cancelled cheque. Cancelled cheques are placed in the account holder's file. The account holder can request a copy of a cancelled cheque as proof of a payment.
This is known as the cheque clearing cycle. Cheques are losing favour, as they can be lost or go astray within the cycle, or be delayed if further verification is needed in the case of suspected fraud. A cheque may thus bounce some time after it has been deposited. Following a report by a working group of the Office of Fair Trading] in 2006 [11] maximum times for the cheque clearing cycle for most banks will be introduced in UK from November 2007.[12] The date the credit appears on the recipient's account (usually the day of deposit) will be designated 'T'. At 'T + 2' (2 business days afterwards) the value will count for calculation of credit interest or overdraft interest on the recipient's account. At 'T + 4' one will be able to withdraw funds (though this will often happen earlier, at the bank's discretion). 'T + 6' is the last day that a cheque can bounce without the recipient's permission - this is known as 'certainty of fate'. Before the introduction of this standard, the only way to know the 'fate' of a cheque has been 'Special Presentation', which would probably involve a fee, where the drawee bank contacts the payee bank to see if the payee has that money at that time. 'Special Presentation' needs to be stated at the time of depositing in the cheque.
When a maker directs the maker's bank to deduct the funds for the amount of a cheque from the maker's account, thus guaranteeing funds will be available for the cheque to clear, and the bank indicates this fact by making a notation on the face of the cheque (technically called an acceptance), the instrument is then referred to as a certified cheque.
In Europe, in the few countries where cheques are still being used, and in the past also in other European countries, (but this has stopped some 20 years ago), a drawer could present a cheque guarantee card with the cheque when paying a retailer. If the retailer wrote the card number on the back of the cheque, the cheque was signed in the retailer's presence, and the retailer verifies the signature on the cheque against the signature on the card, then the cheque cannot be cancelled and payment cannot be refused. Those guarantee cards are out of use in Central Europe for about 15 years.
A cheque used to pay wages due is referred to as a payroll cheque. Payroll cheques issued by the military to soldiers, or by some other government entities to their employees, beneficiants, and creditors, are referred to as warrants.
A traveller's cheque is designed to allow the person signing it to make an unconditional payment to someone else as a result of paying the account holder for that privilege. Traveller's cheques can usually be replaced if lost or stolen, they are often used by people on vacation instead of cash. The use of credit or debit cards has, however, begun to replace the traveller's cheque as the standard for vacation money, with an increase in usage by spenders due to ease of use, and an increase of businesses preferring
transfers of this kind over traveller's cheques. This has resulted in some businesses to no longer accepting traveller's cheques as currency.
A cheque sold by a post office or merchant such as a grocery for payment by a third party for a customer is referred to as a money order or postal order.
A cheque issued by a bank on its own account for a customer for payment to a third party is called a cashier's cheque, a treasurer's cheque, a bank cheque, or a bank draft. A cheque issued by a bank but drawn on an account with another bank is a teller's cheque.
In addition to issuing cashier's and teller's cheques, banks often sell money orders, and traveller's cheques are usually purchased from banks.
Some public assistance programs such as the Special Supplemental Nutrition Program for Women, Infants and Children, or Aid to Families with Dependent Children make vouchers available to their beneficiaries, which are good up to a certain monetary amount for purchase of grocery items deemed eligible under the particular programme. The voucher can be deposited like any other cheque by a participating supermarket or other approved business.
Paper cheques have a major advantage to the maker over debit card transactions in that the maker's bank will release the money several days later. Paying with a cheque and making a deposit before it clears the maker's bank is called "kiting" or "floating" and is generally illegal in the United States, but rarely enforced unless the maker uses multiple chequing accounts with multiple institutions to increase the delay or to steal the funds.
Industry trendCheques have been in decline for many years, both for point of sale transactions (for which credit cards and debit cards are increasingly preferred) and for third party payments (e.g. bill payments), where the decline has been accelerated by the emergence of telephone banking and online banking. Being paper-based, cheques are costly for banks to process in comparison to electronic payments, so banks in many countries now discourage the use of cheques, either by charging for cheques or by making the alternatives more attractive to customers. The rise of automated teller machines (ATMs) has led to an era of easy access to cash, which make the necessity of writing a cheque to someone because the banks were closed a thing of the past.
West Europe
In most European countries, cheques are now very rarely used, even for third party payments. In these countries, it is standard practice for businesses to publish their bank details on invoices in order to facilitate the receipt of payments. Even before the introduction of online banking, it has been possible in some countries to make payments to third parties using ATMs. One of the essential procedural differences is that with a cheque, the onus is on the payee to initiate the payment in the banking system, whereas with a bank transfer, the onus is on the payer to effect the payment.
In Germany and Austria, as well as in the Netherlands and Belgium, cheques have almost completely vanished in favour of direct bank transfer and electronic payment. Direct bank transfer using so-called Giro accounts (current accounts) has been standard procedure since the 1950s to send and receive regular payments like rent and wages, even mail-order invoices. In the Netherlands, Austria and Germany, all kinds of invoices are commonly accompanied by so-called acceptgiro's (Dutch) or Überweisungen (German), which are essentially standardized bank transfer order forms preprinted with the payee's account details and the amount payable. The payer fills in his account details and hands the form to a clerk at his bank, which will then transfer the money. Also, it is very common to allow the payee to automatically withdraw the requested amount from the payer's account (Lastschrifteinzug (German) or Incasso (machtiging) (Dutch)). Though similar to paying by cheque, the payee only needs the payer's bank and account number. Since the early 1990s this method of payment has also been available to merchants. Due to this, credit cards are rather uncommon in Germany and Austria and are mostly used for the credit function rather than for cashless payment. Debit cards, however, are widespread in these countries since virtually all Austrian and German banks issue debit cards instead of simple ATM cards for use on current accounts. Acceptance of cheques has been further diminished since the late 1990s, because of the abolishment of the Eurocheque. Cashing a foreign bank cheque is possible, but usually very expensive.
In Finland, banks stopped issuing personal cheques in about 1993. All Nordic countries have used an interconnected international Giro system since the 1950s, and in Sweden cheques are now totally abandoned. Also electronic payments across the European Union are now fast and low-cost.
In the United Kingdom, Ireland and France, there is still a heavy reliance on cheques by some sectors of the population, partly because cheques remain free of charge to personal customers, but bank-to-bank transfers are increasing in popularity. Since 2001, businesses in the United Kingdom have made more electronic payments than cheque payments [3]. In a bid to discourage cheques, most utilities in the United Kingdom charge higher prices to customers who choose to pay by a means other than direct debit, even if the customer pays by another electronic method. Many shops in the United Kingdom and France no longer accept cheques as a means of payment. An example of this is when Shell announced in September 2005 that it would no longer accept cheques in its UK petrol stations [13]. More recently this has been followed by other major fuel retailers such as Texaco, BP, and Total. ASDA announced in April 2006 that it would stop accepting cheques, initially as a trial in the London area [14], and Boots announced in September 2006 that it would stop accepting cheques, initially as a trial in Sussex and Surrey [15]. Currys (and other stores in the DSGi group) and WH Smith also no longer accept cheques. Cheques are now widely predicted to become a thing of the past in the United Kingdom, or at most a niche product used to pay friends, relatives, private individuals or the few businesses that don't or can't
easily accept electronic payment (e.g. very small shops, child's football lessons, piano teacher, driving instructor, etc.). [16].
North America
The United States still relies heavily on cheques, caused by the absence of a high volume system for low value electronic payments. About 70 billion cheques were written annually in the USA by 2001[17] though almost 25 per cent of the Americans do not have bank accounts at all.[18] When sending a payment by online banking in the United States at some banks, the sending bank mails a cheque to the payee's bank or to the payee rather than sending the funds electronically. Certain companies with whom a person pays with a cheque will turn that cheque into an ACH or electronic transaction. Banks try to save time processing cheques by sending them electronically between banks. Many utilities and most credit cards will also allow customers to pay by providing bank information and having the payee draw payment from the customer's account (direct debit).
Canada's usage of cheques is slightly less than that of the United States. The Interac system, which allows instant fund transfers via magnetic strip and PIN, is widely used by merchants to the point that very few brick and mortar merchants accept cheques anymore. The system appears to have far lower fees than credit cards for merchants and therefore many merchants accept Interac debit payments but not credit card payments, even though most Interac terminals can support credit card payments. Banks also facilitate transfers between accounts within their own institutions, or for a ~$1.50 fee between any two bank customers via the Interac system, however, neither feature has really caught on. Cheques are still widely used for government cheques, payroll, rent and utility bill payments, though direct account deposits and online/telephone bill payments are catching on.
Alternatives to cheques
Wire/bank transfer (local and international)
EU payment
Direct debit (initiated by payee)
Direct credit (initiated by payer), ACH in the USA
Online card payment
Third party online payment services (for example PayPal)
Postal payments (different names in different countries)
Cash (at the counter)
POS payments (at the counter)
Fraud (identity theft) via chequesSince cheques include significant personal information (name, account number, signature and in some countries driver's license number, the address and/or phone number of the account holder), they can be used for fraud, specifically identity theft.
Oversized chequesOversized cheques are often used in public events such as donating money to charity or giving out prizes such as Publisher's Clearing House. The cheques are commonly 18″ × 36″ in size,[19], however, according to the Guinness Book of World Records, the largest ever is 12 m by 25 m.[20] Regardless of the size, such cheques can still be redeemed for their cash value as long as they have the same parts as a normal cheque, although usually the oversized cheque is kept as a souvenir and a normal cheque is provided.[21]
Bounced chequeA bounced cheque or RDI (returned deposit item) is a cheque that is returned to the depositing bank because the owner of the account in the issuing bank has insufficient funds to cover its value, has issued a stop payment on the cheque, or their account has been closed or is frozen/limited. In the United States, usually the cheque writer's bank and the other bank charge the cheque writer a penalty for the transaction, and in some instances the writer can be charged with a criminal action.
Cashier's chequeA cashier's cheque is a cheque issued by a bank cashier or head teller or by a well known company. Payees may require cashier's cheques and reject personal cheques so that they can be certain that sufficient funds will continue to be available for payment to the payee. Though these cheques are thought to be as good as cash, they are still a paper cheque. Due to this belief, people fall to lottery scams when a cashier's cheque is sent.
A similar instrument, known as a banker's draft, is issued by banks in the United Kingdom. A banker's draft is not issued by a head teller as in the US; rather, it is a cheque which is guaranteed not to bounce, as the value of the banker's draft has been verified as being in the account and allocated as such before issue. Banker's drafts are not hand written, but are printed specially by the bank or building society at the time of issuance.
Certified chequeA certified cheque is a personal or company cheque that is certified as a valid cheque by the bank on which it is drawn. It can be a personal cheque, in which case the bank transfers the payable amount from the payer's account to a separate account so that there is certainty of sufficient funds. A hole
is punched through the MICR numbers so the certified cheque will not process as an ordinary cheque when it is received for payment by the bank on which it is drawn. Bank officials must sign the face of the cheque. Although the face of the cheque is crowded, the back of the cheque is blank and the cheque can be deposited and routed through the banking system like an ordinary cheque.
WarrantsWarrants look like cheques and clear through the banking system like cheques, but are not drawn against cleared funds in a demand deposit account. Instead they are drawn against "available funds" so that the issuer can collect interest on the float. In the US, warrants are issued by government entities such as the military and state and county governments. Warrants are issued for payroll to individuals and for accounts payable to vendors. A cheque differs from a warrant in that the warrant is not necessarily payable on demand and may not be negotiable.[22] Deposited warrants are routed to a collecting bank which processes them as collection items like maturing treasury bills and presents the warrants to the government entity's Treasury Department for payment each business day.
