Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
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Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Cheque Payment and Subsequent Payment - When a cheque is issued for Rs. 1 lakh and a payment of Rs. 10,000 is made afterward, the cheque can still be presented for the full amount. However, if partial payment is made and properly endorsed on the cheque, the remaining balance can be claimed. Presenting the cheque for the entire original amount after partial payment without endorsement may result in dishonor due to insufficient funds or discrepancy. Yog Raj vs Bodh Raj @ Bitu - Himachal Pradesh, M. Shabeer, S/o. Mohammed Sali VS Anitha Bajee, W/o. Bajee Govindan - Kerala
Effect of Partial Payment on Cheque Presentation - If part of the debt is paid and endorsed on the cheque, the cheque can be negotiated for the remaining amount. Presenting the cheque for the whole amount after partial payment without endorsement is likely invalid, leading to dishonor if funds are insufficient. Yog Raj vs Bodh Raj @ Bitu - Himachal Pradesh
Legal Precedents on Cheque Presentation - Courts have held that if a cheque is issued as security or for a debt, and part payment is made, the cheque must reflect this through endorsement. Otherwise, presenting the cheque for the full amount can be treated as an attempt to recover the entire debt, which may be invalid if partial payment has been acknowledged separately. Hitesh Mahendrabhai Patel, 2023 SCC 578
Banking Procedures and Dishonor - When a cheque is dishonored due to insufficient funds, presenting it for the full amount without considering partial payments or endorsements can lead to legal consequences, including penalties or criminal charges under the Negotiable Instruments Act. Ram Babu Shaw S/o Lt. Dhanpal Shaw VS State Of Assam - Gauhati, Jatan Kumar Singh VS State of U. P. - Allahabad
Impact of Partial Payments on Liability - Courts emphasize that if the debtor has paid part of the amount, the remaining balance should be clearly endorsed on the cheque. Otherwise, presenting the cheque for the full amount may be deemed invalid or constitute an offense if dishonored. Union Bank of India Erstwhile Corporation Bank Through it Branch Manager Madurai. vs R.Janakiramulu Madurai. - Consumer State
In the world of business transactions, cheques remain a common payment method in India. However, complications arise when a cheque is issued for a specific amount, say Rs. 1,00,000, and a partial payment of Rs. 10,000 is made before the cheque is presented for encashment. A frequent question is: Entry in Cheque Different with Respect to the Amount in Words and Figures which will Prevail? While discrepancies between words and figures are governed by , which typically prioritizes the amount in words, the real issue here revolves around partial payments and their impact on enforceability under Section 138.
This blog explores the legal nuances: Can you present the cheque for the full original amount after partial payment? What role does endorsement play? Drawing from key judgments and principles, we'll break it down to help you navigate potential disputes. Note: This is general information based on precedents and not specific legal advice. Consult a lawyer for your case.
When a cheque is issued and partial payment is received before presentation, the debt is reduced. Presenting the full amount without acknowledging the partial payment may not represent a '' at the time of encashment, a key requirement for proceedings. Courts have consistently held that failure to endorse the partial payment defeats the offence.
For instance, in , the Court held that if the cheque was for an amount higher than the actual debt due at the time of presentation, and no endorsement regarding partial payment was made, then the offence under Section 138 of the Act... cannot be made out . Similarly, in , it was noted that if part payment is made before presenting the cheque, it could not be said that there is or liability to the extent shown in the instrument .
Without endorsement, presenting for Rs. 1,00,000 risks the cheque being viewed as not reflecting the true liability, potentially leading to without Section 138 liability for the drawer.
The NI Act requires the cheque to be for 'payment of any amount of money... for discharge, in whole or in part, of any debt or other liability.' Post-partial payment, the original amount no longer matches the enforceable debt unless adjusted.
The Court in Joseph Sartho explained that the law contemplates making of an endorsement by the drawee on the back of the cheque regarding the part payment received, and without such endorsement, the cheque cannot be negotiated for the lesser amount . This endorsement ensures transparency and validity.
In , it was emphasized that if the amount shown in the cheque is more than what is legally due or enforceable, then no offence is made out unless endorsed or recognized as a G. John, Managing Director, Eruro Marine VS Alosious. Y. , Puthenveedu - 2009 0 Supreme(Ker) 821.
Other precedents highlight ledger adjustments. For example, where in the ledger account, the amount of cheques tallied with each entry and therefore, so far amount mentioned in the cheques are concerned, no any amount is due as it was paid through RTGS mode Sufi International Pvt. Ltd. VS Accurate Trans Heat Pvt. Ltd. Thro Kedarmal Mangilal Dargad - 2024 Supreme(Guj) 1763 - 2024 0 Supreme(Guj) 1763Sufi International Pvt Ltd. VS Accurate Trans Heat Pvt Ltd Thro Kedarmal Mangilal Dargad - 2024 Supreme(Guj) 1765 - 2024 0 Supreme(Guj) 1765. This shows courts examine overall transaction records, reinforcing that unendorsed full-amount presentation ignores actual dues.
Additionally, if a cheque is issued as advance and later cancelled, or partial cash paid, like a cheque of Rs. 2 lacs was issued and Rs. 1,70,000/- was given as cash , the balance must be properly documented.
Presenting without endorsement treats the full amount as due, but courts may rebut the presumption under . In M/s Ancon Engineering, the cheque was for an amount higher than the amount due on the date it was presented , quashing the complaint.
Consequences:- Cheque due to insufficient funds.- No Section 138 offence if challenged successfully.- Potential counter-claims for misuse.
From additional sources: Cheque Payment and Subsequent Payment - When a cheque is issued for Rs. 1 lakh and a payment of Rs. 10,000 is made afterward, the cheque can still be presented for the full amount. However, if partial payment is made and properly endorsed on the cheque, the remaining balance can be claimed M. Shabeer, S/o. Mohammed Sali VS Anitha Bajee, W/o. Bajee Govindan - . Without it, invalidity looms.
Courts note: If a signed blank cheque is voluntarily presented to a payee... the payee may fill up the amount , but adjustments must reflect reality.
In cases like post-dated cheques, there is an implied representation that... the cheque would be paid when presented for payment , but partial payments override this.
Failure to endorse can lead to acquittal. In Joseph Sartho, the cheque no longer was one for payment of money for discharging in whole or in part of any debt or other liability if part payment was received before presentation and no endorsement was made .
Recent analysis: Courts have held that if a cheque is issued as security or for a debt, and part payment is made, the cheque must reflect this through endorsement (Hitesh Mahendrabhai Patel, 2023 SCC 578). Also, if the debtor has paid part of the amount, the remaining balance should be clearly endorsed on the cheque Union Bank of India Erstwhile Corporation Bank Through it Branch Manager Madurai. vs R.Janakiramulu Madurai. - Consumer State.
Even non-presentation doesn't bar suits: even if a cheque is not presented for encashment, a cheque is a written agreement containing a .
Pro Tip: Legal notice post- must demand the actual due amount.
In summary, after partial payment on a Rs. 1,00,000 cheque (e.g., Rs. 10,000 paid), only the Rs. 90,000 balance prevails if endorsed. Presenting the full amount without endorsement typically fails to establish a Section 138 offence, as it doesn't represent the enforceable debt G. John, Managing Director, Eruro Marine VS Alosious. Y. , Puthenveedu - 2009 0 Supreme(Ker) 821.
Key Takeaways:- Endorse partial payments to validate presentation.- Courts prioritize actual liability over face value.- Proper documentation prevents reversals.
By understanding these rules, businesses can mitigate risks in cheque transactions. For tailored advice, reach out to a legal expert. Stay informed, transact wisely!
References:1. 2. 3. G. John, Managing Director, Eruro Marine VS Alosious. Y. , Puthenveedu - 2009 0 Supreme(Ker) 821
#ChequeBounce #NIAct #LegalTips
, he had failed to appear before the Court and had not paid the balance amount. ... The evidence with respect to the financial capacity of the complainant and the evidence of the complainant (CW-1) to the effect that he had a business of Mango Garden in Sector 28-29, Chandigarh for the last 10-12 years and the fact that he used to earn Rs.1 lac annually as profit, was taken into consider....
Hitesh Mahendrabhai Patel (2023) 1 SCC 578: 2022 SCC OnLine SC 1376 that when the amount is paid, the cheque cannot be presented for the whole amount and the payment received by the complainant has to be endorsed on the cheque. It was observed: - “16. ... Nand Lal (DW1) proved that as per the statement of account (Ex.DW1/A), the accused had issued #HL_....
From the evidence of PW-3, it is very much clear that the accused petitioner never approached before the Bank authority to stop the payment of the Cheque amount, which was presented before the said Bank nor the signature made in the money receipt as well as the Cheque in question was disputed by the ... Act) to pay a fine of Rs.1,05,000/-(Rupees One Lac and five thousand) only and in def....
The fine amount, if realised, shall be paid as compensation to the complainant under Section 357(1) Cr.P.C. ... If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. ... The fine amount, if realised, shall be p....
Delhi Administration, (1965) 1 SCR 7 has held as under : "It is the duty of the Court in construing a statute to give effect to the intention of the legislature. ... Act i.e., firstly, the amount of money standing to the credit of the account is insufficient to honour the cheque and secondly, it exceeds the amount arranged to be paid from the account by an agreement made with the Bank. .....
This commission also followed the same example that suppose if a person is having an opening balance of Rs.10,000/- in his credit and he presented a cheque for Rs.10,000/- in his credit, a bank would credit those opening balance Rs.10000/- + Cheque amount Rs.10,000/- totally Rs.20,000/-. ... Similarly on 18.04.2011 the complainant had presented 20 cheques in which 10 cheque#HL....
1. ... In the ledger account, the amount of cheques tellied with each entry and therefore, so far amount mentioned in the cheques are concerned, no any amount is due as it was paid through RTGS mode. ... In the facts of case before the Supreme Court, the cheque was issued as an advance payment for purchase of goods and subsequently, the order was cancelled and goods co....
1. ... In the ledger account, the amount of cheques tellied with each entry and therefore, so far amount mentioned in the cheques are concerned, no any amount is due as it was paid through RTGS mode. ... In the facts of case before the Supreme Court, the cheque was issued as an advance payment for purchase of goods and subsequently, the order was cancelled and goods co....
P.C., in which it was stated that a cheque of Rs. 2 lacs was issued and Rs. 1,70,000/- was given as cash. Thus, the accused never claimed that an amount of Rs. 70,000/- was advanced on one day and Rs. 1 lac was advanced on the other day. ... If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other pa....
The version of the appellant is that a cheque no.779904 of Rs.1 lac dated 6.12.2007 was presented by the complainant and it was entered into the account of the complainant but when this cheque was sent to Delhi for clearance, it was returned uncleared. ... amount of Rs.1 lacs was credited to the complainant’s account. ... The complainant has stated that he ....
6. Learned counsel for the appellant/defendant argues that suit was not maintainable under Order XXXVII CPC as the subject cheque was not presented for encashment, however, in my opinion, even if a cheque is not presented for encashment, a cheque is a written agreement containing a liquidated amount, and therefore, a suit on the basis of a non-presented cheque is maintainable under Order XXXVII CPC. Vs. M/s JMS Steel & Power Corporation & Anr. RFA No.402/2018 decided on 11.5.....
The complainant issued a legal notice on 17.10.2002 calling upon the petitioner accused to repay the cheque amount. After issuance of the said cheque, he assured the complainant that, the above cheque will be honoured if it is presented for encashment. The respondent presented the said cheque for encashment on 7.10.2002, but it was returned with an endorsement 'insufficiency of funds'. The petitioner-accused agreed to pay the said amount and issued a cheque bearing No. 649583....
Please acknowledge the receipt of the cheques as mentioned above.” The balance amount of Rs. 10 lac will be paid by another cheque. Keeping in view the discussions we held and terms of agreement the undersigned has decided to repay Rs. 31 lakhs (Rupees Thirty One Lac only) and accordingly please find enclosed herewith Cheque No. 235105 dated 16.10.2006 drawn on State Bank of Mysore, Bangalore for an amount of Rs. 21 lakhs (Rupees Twenty One Lac only) from M/s Sreenivasa Trade....
In this context a post - dated cheque is a mere promise to pay on a future date and the mere fact that the cheque is dishonoured may not in itself give rise to a criminal offence. In such a case there is an implied representation that (i) the cheque is a good and valid order for payment of the amount; and (ii) that the cheque would be paid when presented for payment.
Understanding the provisions in the ordinary sense, we find that the provisions do not justify such a conclusion. If that be so, it will be perfectly open to the payee or holder in due course to present the cheque for payment even after his failure to file a complaint on the basis of the first cause of action accrued to him. If the cheque is again dishonoured, it will again be open to the payee or holder in due course to issue a notice demanding payment of the amount due as per the cheque. #HL....
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