Advocates Club

Category: Cheque Bounce

A collection of Judgements which are related to Cheque Bounce by Supreme Court of India and Delhi High Court.

Cheque Bounce

NO STAY ON CHEQUE BOUNCE PROCEEDINGS: DIRECTORS LIABLE DESPITE INITIATION OF INSOLVENCY PROCEEDINGS

It is a well-recognized law that in cheque bounce cases, not only the company on whose behalf a cheque is issued but also the signatory of the cheque and other individuals engaged in the day to day affairs of the company are held liable in criminal complaint filed under Section 138 r/w 141 of the Negotiable and Instruments Act, 1881....

Cheque Bounce

Effects and Legal Recourse for Non-Compliance with Settlement in Cheque Bounce Cases

With the surge in electronic monetary transactions and the increase in issuance of cheques during business dealings, there has been a corresponding increase in criminal complaints filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the NI Act), commonly known as cheque dishonour or cheque bounce cases. In examining the statutory framework governing the settlement...

Cheque Bounce

When can a Director be Held Liable for Cheque Bounce Offences under Section 138 of Negotiable Instrument Act?

A Company must have numerous Directors however, it is not necessary that all Directors must be engaged in the day to day affairs of the Company and therefore, the Directors who have not signed a cheque on behalf of the Company cannot be prosecuted U/s 138 of Negotiable Instruments Act. The Apex Court in numerous judgments, held that a Director...

Cheque Bounce

No Offence is Made Out Against Dishonor of Cheque Presented Without Endorsing Part Payments Made Before Presentation of the Cheque

Can a cheque be presented for encashment if the holder of cheque has received part payment from the drawer before presentation of the cheque? The answer to the above question is that a cheque can be presented for encashment by the holder of the cheque even if the part payment has been received by the holder after the issuance of...

Cheque Bounce / Civil Law

Applicability of Limitation Law during the period of COVID-19 pandemic and Mode of Effective Service

The Hon’ble Supreme Court while dealing with the issue of limitation in lieu of the COVID -19 pandemic, suo moto took cognizance of the difficulties to be faced by the litigants across the country in filing their petitions/applications/suits/ appeals/all other proceedings within the period of limitation and therefore through its order dated 23.03.2020 extended the period of limitation in all...

Cheque Bounce

SUPREME COURT OF INDIA – WHETHER THE COURT HAS POWER TO CLOSE THE PROCEEDINGS OF A CHEQUE BOUNCE CASE WITHOUT THE CONSENT OF THE COMPLAINANT?

Yes the Court has the power to close the proceedings of a cheque bounce case without the consent of the Complainant. The question for consideration before the Supreme Court of India in M/s Meters and Instruments Private Limited & Anr. versus Kanchan Mehta was that if the accused is willing to deposit the cheque amount can the proceedings be closed...

Cheque Bounce / Criminal Law

SUPREME COURT OF INDIA – THE COMPENSATION IS STILL RECOVERABLE IN A CHEQUE BOUNCE CASE BY THE COMPLAINANT EVEN THOUGH THE ACCUSED HAS SERVED THE DEFAULT SENTENCE

The question that arose before the Hon’ble Supreme Court of India was that what happens to the money receivable by the Complainant in the form of Compensation when the Accused undergoes jail term, in default of the compensation, under such circumstances is the Compensation still recoverable by the Complainant? The Hon’ble Supreme Court observes that that the gravity of offences...

Cheque Bounce

DELHI HIGH COURT – IF THE SIGNATURES ON THE CHEQUES ARE ADMITTED BY THE ACCUSED THEN THE CONTENTIONS RAISED BY THE ACCUSED THAT THE AMOUNT AND NAME OF THE DRAWEE WERE NOT FILLED IN BY THE ACCUSED DOES NOT HAVE ANY FORCE IN THE EYES OF LAW

Delhi High Court Date of Judgement: 16.11.2016 If the signatures on the cheques are admitted by the accused, it matters little if the name of the payee, date and amount are filled up at a subsequent point in time and therefore the contention raised by the accused that the amount and name of the Drawee were not filled in by...

Cheque Bounce

SUPREME COURT OF INDIA – WHETHER A POST-DATED CHEQUE GIVEN AS “SECURITY” AND MENTIONED IN THE LOAN AGREEMENT IS COVERED BY SECTION – 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 OR NOT?

Supreme Court of India Date of Judgement: 19.09.2016 Whether the dishonour of a post-dated cheque given for repayment of loan installment which is also described as “security” in the loan agreement is covered by Section 138 of the Negotiable Instruments Act, 1881 or not? The agreement recorded that post-dated cheques towards payment of installment of loan (principal and interest) were...