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|Cheque Dishonour, Check Dishonor, Cheque Bounce, Legal Notice, 138 N. I. Act Complaint, Money Recovery Suit, Order 37 CPC Case, Credit Card|
Important Case laws on Cheque Dishonour (Check Dishonor)
Nepc Micon Ltd. And Others, Appellants V. Magma Leasing Ltd. Respondent. 1999-(086)-AIR -1952 –SC
When the cheque is returned by a bank with an endorsement account closed", it would amount to returning the cheque unpaid because "the amount of money standing to the credit of that account is insufficient to honour the cheque" as envisaged in s. 138 of the Act"
If the cheque is dishonoured because of “stop payment" instruction to the bank, Section 138 would get attracted. It also amounts to dishonour of the cheque within the meaning of Section 138 when it is returned by the bank with the endorsement like (i) in this case, "referred to the drawer" (ii) "instructions for stoppage of payment" and stamped (iii) "exceeds arrangement".
Anil Kumar Sawhney, Appellant V. Gulshan Rai, Respondent. 1993-(004)-SCC -0424 –SC
Postdated cheque - Limitation u/s. 138 proviso (a) for presenting postdated cheque to bank for payment should be reckoned from the date shown on the face of such cheque and not from the date on which it was drawn.
Para No. 12. Sections 5 and 6 of the Act define "Bill of Exchange" and "Cheque". A "Bill of Exchange" is a negotiable instrument in writing containing an instruction to a third party to pay a stated sum of money at a designated future date or on demand. A "cheque" on the other hand is a bill of exchange drawn on a bank by the holder of an account payable on demand. Thus a "cheque" under Section 6 of the Act is also a bill of exchange but it is drawn on a banker and is payable on demand. It is thus obvious that a bill of exchange even though drawn on a banker, if it is not payable on demand, it is not a cheque. A "postdated cheque" is only a bill of exchange when it is written or drawn, it becomes a "cheque" when it is payable on demand. The postdated cheque is not payable till the date which is shown on the face of the said document. It will only become cheque on the date shown on it and prior to that it remains a bill of exchange under Section 5 of the Act. As a bill of exchange a postdated cheque remains negotiable but it will not become a "cheque" till the date when it becomes "payable on demand".
Para No. 13. It is clear from Section 19 that a "cheque" is an instrument which is payable on demand. A postdated cheque, which is not payable on demand till a particular date, is not a cheque in the eyes of law till the date it becomes payable on demand.
Para No. 14. An offence to be made out under the substantive provisions of Section 138 of the Act it is mandatory that the cheque is presented to the bank within a period of six months from the date on which it is drawn or within a period of its validity, whichever is earlier. It is the cheque drawn which has to be presented to the bank within the periods specified therein. When a postdated cheque is written or drawn it is only a bill of exchange and as such the provisions of Section 138(a) are not applicable to the said instrument. The postdated cheque becomes a cheque under the Act on the date which is written on the said cheque and the six months period has to be reckoned for the purposes of Section 138(a) from the said date. One of the main ingredients of the offence under Section 138 of the Act is, the return of the cheque by the bank unpaid. Till the time the cheque is returned by the bank unpaid, no offence under Section 138 is made out. A postdated cheque cannot be presented before the bank and as such the question of its return would not arise. It is only when the postdated cheque becomes a "cheque", with effect from the date shown on the face of the said cheque, the provisions of Section 138 come into play. The net result is that a postdated cheque remains a bill of exchange till the date written on it. With effect from the date shown on the face of the said cheque it becomes a "cheque" under the Act and the provisions of Section 138(a) would squarely be attracted. In the present case the postdated cheques were drawn in March 1990 but they became "cheques" in the year 1991 on the dates shown therein. The period of six months, therefore, has to be reckoned from the dates mentioned on the face of the cheques.
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