Dihonour of cheque supreme court of


Dihonour of cheque supreme court of

In this context, a predominant question arises, i.

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The aim of this post is delve upon the nature of a post-dated cheque, the importance of the intention of the parties while executing a contract and the circumstances in which dishonour of post-dated cheques will attract the penal provisions of law with reference to landmark case law.

At the very outset, it must be understood that the nature of post-dated cheques is such that it acts as a two-fold weapon in the hands of the lenders by means of which they pressurise the borrowers as well as create a deterrent impact on all the other borrowers or debtors so that there is no room for default on repayment of outstanding debt to the creditors.

The impact of Section of the Act, operates differently on the borrowers on one hand and the lenders on the other. In other words, this provision of law is hailed by the lenders whereas the borrowers dread it the most as the dishonour of cheques may lead to months of imprisonment.

Dishonour of cheque for insufficiency, etc.

Dihonour of Cheque Supreme Court of India Ruling Essay Sample

Provided that nothing contained in this section shall apply unless- It is thus obvious that a bill of exchange even through drawn on a banker, if it is not payable on demand, it is not a cheque.

The post-dated 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. Application of Section to Post-Dated Cheques In simple terminology, section of the Act, shall have application when the cheque issued by the borrower to the lender is dishonoured in relation to a subsisting debt or liability.

Therefore, keeping in mind the essential elements of post-dated cheques, as elucidated above, it can be concluded that section of the Act, shall be attracted only when such post-dated cheque attains the nature of a cheque, i.

However, when the post-dated cheque retains the nature of a negotiable instrument bills of exchange then such post-dated cheque cannot be presented to the bank and subsequently the question of return or dishonour of cheque does not arise.The Supreme Court in N.

Harihara Krishnan v. J. Thomas ruled yesterday on certain procedural aspects relating to the offence under section of the Negotiable Instruments Act, (“NI Act”) of dishonour of a cheque issued by a company.

It held that any failure to include the company as an accused in the complaint at the outset (i.e. within the . The Supreme Court (“Court”) has, in its recent decision in Dashrath Rupsingh Rathod v.

Dihonour of cheque supreme court of

State of Maharashtra & Anr. 1, held that in cases of dishonour of cheque, only those courts within whose territorial limits the drawee bank is .

to have application of dishonour of post-dated cheques given as security. The Supreme Court has extensively dealt with this question in the case Sampelly Satyanarayana. Dishonour of cheque. Filing a complaint under Section of the Act. In this case, a 3-Judge bench of the Supreme Court had held that a cheque bouncing case can be filed only in a court which has the territorial jurisdiction over the place where the cheque is dishonoured by the bank on which it is drawn.

Jan 14,  · The Hon`ble Supreme Court of India has now held that all the criminal matters relating to dishonour of cheques would only be entertained by the court where the cheque was dishonoured. India Litigation, Mediation & Arbitration Mansukhlal Hiralal & Company 14 Jan Reminder notice of dishonor of cheque to the drawer In a recent case, N.

Parameshwaram Unni v. G. Kannan & Anr. [7], the Supreme Court held that a reminder notice to a drawer of cheque cannot be construed as an admission of non-service of the first notice by the complainant.

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