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1965 0 Supreme(SC) 223 : Where a suit is based on a promissory note and the defendant dies, if the creditor institutes the suit against the legal representatives of the deceased defendant after bona fide enquiry and in good faith believing they are the only legal representatives, the decree obtained will bind the entire estate, including other legal representatives who were not impleaded, provided there is no fraud, collusion, or special defence that could have been raised but was not. This principle applies irrespective of religious persuasion and is based on procedural law, not personal law. Therefore, if a cheque was issued by a deceased person, the payee (recipient) may file a recovery suit against the legal representatives of the deceased, and if the payee has made a bona fide enquiry and impleaded the legal representatives believed to be the only ones, the decree will bind the entire estate, including any other legal representatives not originally named.Checking relevance for Odisha State Financial Corporation VS Vigyan Chemical Industries...

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2009 0 Supreme(SC) 2091 : Yes, the legal heirs (LRS) of a deceased cheque holder can file a complaint under Section 138 of the Negotiable Instruments Act, 1881, for recovery of money, as the rights of the deceased holder devolve upon them by operation of law. The legal heirs step into the shoes of the original holder in due course and are entitled to initiate proceedings under Section 142 of the Act, as the cause of action survives after the death of the holder. The court has held that there is no provision in the Act prohibiting legal heirs from filing such a complaint, and they can rely on the instrument to recover the amount due.Checking relevance for Director General (Road Development) National Highways Authority Of India VS Aam Aadmi Lokmanch...

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Checking relevance for Khemchand Jain S/o Late Surajmal Jain VS Bharti Moolwani W/o Late Manoharlal Moolwani...

Checking relevance for Union Of India Through Secretary, Ministry Of Defence, South Block, New Delhi VS Laxmi Nand, S/o Sh. Vija Nand...

2022 0 Supreme(HP) 343 : When a party to a suit or legal proceeding dies, the legal representatives (LRs) of the deceased can be brought on record even after the main proceeding has been abated, provided the application is made in good faith and with condonation of delay. The court has held that a party can always show good faith by moving an application to bring on record the legal representatives of a deceased party, even if the suit was filed against a dead person. In such cases, the law allows for the substitution of the legal heirs as parties, especially when the delay is due to impersonal machinery (e.g., government bodies like the Union of India), and the application is made promptly after the legal representatives of the deceased come forward. This principle applies to recovery of money claims, including those arising from a cheque, where the original payee (chequeholder) has died and their legal heirs seek to recover the amount. The LRs of the deceased chequeholder are entitled to pursue the recovery of money through legal proceedings, provided they are brought on record with condonation of delay.Checking relevance for Sushil Kumar Harlalka S/o Late Tansukhrai Harlalka VS Soneswari Bey W/o Late Hiren Chandra Bey...

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2025 0 Supreme(Del) 592 : When the drawer of a cheque is deceased, the legal representatives (LRS) of the deceased cannot negotiate the cheque by delivery alone. The holder of the cheque cannot recover the amount from the bank unless the drawer had issued a valid order to the bank. Upon the death of the drawer, the bank is not liable to pay the cheque if there is no order from the drawer on the date of presentment. The estate, including funds in the bank, vests in the legal representatives or nominee, but a fresh act by the legal representative or nominee is required to transfer the money. Only if the legal representative signs the cheque at the instance of the holder does the legal representative become personally liable under Section 29 of the Negotiable Instruments Act. Therefore, the payee cannot directly file a recovery suit against the LRS of the deceased drawer solely based on the cheque; the LRS are not automatically liable unless they have personally endorsed or signed the cheque.Checking relevance for Vishwajeet Jaiswal S/o Late Shri Girdharilal Jaiswal VS Suresh Kumar Jaiswal S/o Shri Hajarilal Jaiswal...

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1951 0 Supreme(Cal) 122 : A suit for recovery of specific sums of money misappropriated by a deceased trustee is maintainable against his heirs and legal representatives. This principle applies where the cause of action against the legal representatives is for recovery of specific sums of money misappropriated by the trustee, or for damages due to negligence or misconduct. Therefore, if a cheque was issued by a deceased person and the payee seeks recovery of the amount, a suit for recovery of the specific sum can be filed against the legal representatives (LRS) of the deceased chequeholder, provided the claim is based on misappropriation or loss due to the deceased''''s misconduct or negligence.

• Cheque Issued When Party is Deceased - Main points and insights:
• A cheque issued by a deceased party does not automatically extinguish the right of the cheque holder to recover money. The legal proceedings for recovery can proceed independently of the status of the drawer at the time of dishonour. The payee can initiate a civil suit for recovery even if the drawer is dead, as the cause of action arises from the dishonour of the cheque, not the death of the drawer ["2025 0 Supreme(Kar) 2642"].
• The issuance of a cheque in the name of a company or individual does not necessarily mean the company or individual is a necessary party to the recovery suit, especially if the cheque was issued in a personal capacity. The key consideration is whether the cheque was issued in an individual capacity or on behalf of a company, which affects the necessity of impleading the company ["2023 0 Supreme(Jhk) 1501"].
• Even if the drawer is deceased, the civil suit for recovery based on the dishonoured cheque can be maintained, provided the cause of action (dishonour) exists. The death of the drawer does not bar the civil remedy ["1967 Supreme(Online)(All) 3"].

• The legal notices issued under Section 138 are directed to the drawer (or the person in possession of the cheque), and do not require the presence or involvement of third parties or beneficiaries unless they are parties to the transaction or the cheque was issued as security on behalf of another entity ["2025 0 Supreme(Kar) 2642"].

• Civil Suit for Recovery of Money Post Cheque Dishonour - Main points and insights:

• A civil suit for recovery can be filed when a cheque issued as security or for payment is dishonoured, as the cause of action arises from the dishonour itself. The limitation period begins from the date of dishonour, and the suit can be instituted within the prescribed time frame ["1967 Supreme(Online)(All) 3"], ["2021 0 Supreme(Mad) 514"].
• The issuance of a cheque, even if dishonoured, provides a cause of action for recovery of the amount, and the suit can be maintained irrespective of whether the cheque was issued as security or as payment for a loan or transaction. The courts have consistently held that a dishonoured cheque gives rise to a civil claim for recovery ["2025 Supreme(Online)(Mad) 71273"].
• The death of the drawer does not preclude the filing of a civil suit; the focus remains on the dishonour and the underlying transaction. The cause of action is independent of the death of the drawer ["2025 0 Supreme(Kar) 2642"].

• It is important that the suit is filed within the limitation period from the date of cheque dishonour. The courts have emphasized that the cause of action arises on the dishonour date, not on the date of the original transaction or issuance of the cheque ["2021 0 Supreme(Mad) 514"].

• Additional considerations:

• The status of the party as a registered money-lender or the necessity to be duly registered under relevant Acts affects the maintainability of suits but does not directly impact recovery suits based on dishonoured cheques unless specific statutory restrictions apply ["2025 Supreme(Online)(HP) 9370"], ["2000 Supreme(Online)(HP) 2"].
• The legal notices issued under Section 138 are crucial for establishing the demand and cause of action, but the death of the drawer does not invalidate the civil remedy ["2025 0 Supreme(Kar) 2642"].

Analysis and Conclusion:- When a cheque issued by a deceased party is dishonoured, the cheque holder's right to recover money remains intact. The civil suit for recovery can be maintained independently of the death of the drawer, as the cause of action is rooted in the dishonour of the cheque, not the status of the drawer at the time of filing.- The suit can be filed even if the cheque was issued as security or in the course of a loan transaction, provided the limitation period is observed from the date of dishonour.- The primary requirement is that the cheque holder must initiate proceedings within the statutory time frame from the date of dishonour, and the proceedings are not barred solely due to the death of the drawer.- Therefore, the receivance of cheque by the party who is deceased does not prevent the cheque holder from filing a civil suit for recovery of money ["2025 0 Supreme(Kar) 2642"], ["1967 Supreme(Online)(All) 3"], ["2021 0 Supreme(Mad) 514"].

References:- ["2025 0 Supreme(Kar) 2642"]- ["1967 Supreme(Online)(All) 3"]- ["2025 Supreme(Online)(Mad) 71273"]- ["2021 0 Supreme(Mad) 514"]- ["2023 0 Supreme(Jhk) 1501"]- ["2025 Supreme(Online)(HP) 9370"]- ["2000 Supreme(Online)(HP) 2"]