Does 'Kindly Contact Drawer' on Cheque Return Attract Section 138 of ?
In the world of business transactions, cheques remain a common payment method in India. However, when a cheque bounces, it can lead to serious legal consequences under (). A frequent query arises: Kindly Contact Drawer Whether it Attracts Section 138 of Negotiable Instrument Act? This remark on a cheque return memo often confuses payees (holders). Does it automatically deem the drawer liable for an offence? This blog post breaks down the legal principles, analyzes the implications, and provides guidance based on established case law and statutory provisions.
We'll explore the key elements of Section 138, the meaning of 'kindly contact drawer', procedural requirements, and practical recommendations. Note: This is general information and not specific legal advice. Consult a qualified lawyer for your case.
Understanding Section 138 of the Negotiable Instruments Act
creates a for cheque dishonour. If a cheque issued for a is returned unpaid due to or exceeds arrangement, the drawer is presumed guilty unless proven otherwise. 2022 8 Supreme 240
Key principles include:- The cheque must represent a at the time of encashment. Without this, no offence is made out. 2022 8 Supreme 240- raises a that the cheque was issued for discharge of a debt or liability. The drawer must rebut this with evidence; mere denial suffices not. 2022 0 Supreme(Kar) 1547- Common dishonour reasons like '', '', or '' trigger liability if other conditions are met. 2023 0 Supreme(Cal) 435
However, not all return remarks lead straight to prosecution. Let's examine the specific phrase in question.
What Does 'Kindly Contact Drawer' Remark Mean?
When a bank returns a cheque with 'kindly contact drawer' or 'please contact drawee bank and present again', it signals an issue requiring clarification from the drawer or bank, such as , , or . Importantly, courts have clarified this does not constitute explicit dishonour under Section 138.
For instance:- Cheques from Sr. Nos. 2 to 9 came with the remarks 'kindly contact drawer'. 2021 0 Supreme(Del) 2273 2021 0 Supreme(Del) 62- Such endorsements indicate a need for further action before legal proceedings. The holder must comply with bank instructions and re-present the cheque. 2025 0 Supreme(All) 3253 2023 Supreme(Online)(MAD) 45751 2024 Supreme(Online)(MAD) 3998 2024 0 Supreme(All) 250
Judicial view: A cheque returned with 'kindly contact drawer' or 'please present again' does not automatically amount to dishonour. The bank must explicitly state dishonour reasons, and the complainant should follow due process. 2025 0 Supreme(All) 3253 2023 0 Supreme(Cal) 434
Does 'Kindly Contact Drawer' Attract Section 138 Liability?
No, not automatically. While Section 138 applies to dishonoured cheques for legally enforceable debts, a 'contact drawer' remark alone does not fulfill the criteria. Here's why:
Essential Conditions for Section 138 Offence
To attract liability, all these must be satisfied:1. Cheque issued for at presentation time. 2022 8 Supreme 2402. Sufficient funds lacking or exceeds arrangement at issuance. 1998 2 Supreme 4713. Dishonour due to specified reasons (e.g., funds insufficient, not vague remarks). 1998 2 Supreme 4714. Payee sends demand notice within 30 days of bank memo, demanding payment within 15 days. Failure to pay triggers offence. 1999 8 Supreme 617 2022 0 Supreme(Raj) 2933 2023 0 Supreme(Cal) 1372
If the remark is 'kindly contact drawer', the holder should:- Contact the drawer/bank as instructed.- Re-present the cheque.- Obtain a clear dishonour memo if it bounces again.
Example from records: In cases involving Cheque No. 196949 (dated ), dishonoured on , notice to drawer under Section 138 was issued on . Similar for Cheque No. 196948.
2001 0 Supreme(Bom) 1080
Failure to re-present prematurely invokes proceedings may lead to quashing of complaints, as seen in matters like M/s Muscle Fuelz and Ors. under Section 138. 2024 Supreme(Online)(Del) 32732
Presumptions and Burden of Proof
- presume the cheque was for consideration and debt discharge. Drawer must prove absence of debt. 2025 0 Supreme(All) 3253 2024 Supreme(Online)(MAD) 3998
- offers the drawer a 'window' to settle, akin to .
Insights from Case Law and Practice
Courts emphasize procedural compliance:- Dishonour for 'kindly contact drawer' is not culpable under Section 138 unless explicit reasons like follow re-presentation. 2023 0 Supreme(Cal) 435- Implication: Merely receiving this remark does not suffice for Section 138 action. Adhere to notice under . 2025 0 Supreme(All) 3253
In contexts with Section 138, vague endorsements do not sustain complaints without due process. 2023 0 Supreme(Cal) 435
Practical Recommendations
If you receive a 'kindly contact drawer' memo:- Immediately contact the drawer and bank to resolve (e.g., verify account, funds).- Re-present the cheque promptly after compliance.- Issue legal notice only on confirmed dishonour, within timelines.- Gather evidence: Debt proof, issuance circumstances, bank memos.- Review case law like those on presumptions under . 2022 0 Supreme(Kar) 1547- Consult a legal professional for tailored advice, as facts determine applicability.
Pro tip for businesses: Maintain digital records of transactions to rebut presumptions if needed.
Conclusion and Key Takeaways
A cheque returned with 'kindly contact drawer' does not automatically attract liability. It requires explicit dishonour confirmation post-re-presentation, proper notice, and proof of enforceable debt. While presumptions favor the holder, procedural lapses can derail cases. 2022 8 Supreme 240 2025 0 Supreme(All) 3253
Key Takeaways:- Treat such remarks as procedural hurdles, not offences.- Follow bank instructions to avoid complaint dismissal.- Section 138 protects genuine creditors but demands compliance.- Always seek professional legal counsel for specifics.
Disclaimer: This article provides general insights based on legal principles and does not constitute advice. Laws evolve; verify with current statutes and precedents.
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