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Understanding Section 138 NI Act Complaints Dismissed for 'Contact Drawer/Bank' Endorsements

Cheque dishonour cases under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) are common in India, aimed at ensuring trust in cheque transactions. But what happens when a cheque is returned with the endorsement 'Kindly contact Drawer/Drawee Bank'? Can a complaint under Section 138 be filed, or is it typically dismissed? This post breaks down recent court judgments, procedural requirements, and key defenses, helping you navigate these cases.

Note: This is general information based on case law. Legal outcomes vary by facts. Consult a lawyer for advice specific to your situation.

What Triggers a Section 138 NI Act Complaint?

Section 138 penalizes cheque dishonour due to insufficient funds or exceeding arrangement, but courts have expanded it to other reasons like 'account closed'. The process involves:

• Cheque presentation and return unpaid.


• Demand notice within 30 days of bank intimation (excluding receipt day) Dr. Premish Verma v. Lokesh Sharma - 2008 Supreme(Online)(Chh) 35.


• Drawer fails to pay within 15 days of notice receipt.


• Complaint filed within 1 month of cause of action Vijay Kumar Mishra VS State of U. P. - 2020 Supreme(All) 67.

'Contact Drawer/Bank' isn't explicitly insufficient funds, but courts examine context. In one case, a cheque returned on 17.6.2020 with this remark led to proceedings, as it signaled failure to maintain funds Jatan Kumar Singh VS State of U. P. - 2024 Supreme(All) 250. However, complaints fail if basics like notice service or timelines are missing.

Key Ingredients for a Valid Complaint

From precedents:
- Date of service of notice must be clear; cause of action starts from bank return memo date Vijay Kumar Mishra VS State of U. P. - 2020 Supreme(All) 67.
- Complaint must detail mode and manner of notice issuance Anwar Saifi VS State of U. P. - 2023 Supreme(All) 443, Sunil Kumar Bhagat, S/o Late Sheopujan Bhagat VS State of Jharkhand - 2024 Supreme(Jhk) 914.
- Presumption of service applies under Section 27 General Clauses Act if sent to correct address, even if unclaimed Santan Financers and Real Eastate Pvt. Ltd. VS Devapa A. Sarvi - 2004 Supreme(Bom) 1555.

Failure here leads to dismissal: It is not clear that one of main ingredient i.e. date of service of notice... is completely missing – proceedings quashed Vijay Kumar Mishra VS State of U. P. - 2020 Supreme(All) 67.

When Are 138 Complaints Dismissed?

Courts dismiss under Section 482 CrPC if procedural lapses or no prima facie case exist. Common grounds:

1. Missing or Defective Demand Notice

• Notice must be in writing within 30 days; telephonic intimation insufficient Dr. Premish Verma v. Lokesh Sharma - 2008 Supreme(Online)(Chh) 35.


• Complaint premature if filed before 15-day payment window Sunil Kumar Bhagat, S/o Late Sheopujan Bhagat VS State of Jharkhand - 2024 Supreme(Jhk) 914.


• No proof of service? Presumption helps, but drawer can rebut at trial Sunil Kumar Bhagat VS State of Jharkhand.

Quote: The complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque Man Singh VS State of U. P. - 2023 Supreme(All) 434.

2. Jurisdictional Issues

• Offence has 5 components: drawing, presentation, dishonour, notice, non-payment. Any location's court has jurisdiction Vinod S/o Shri Laxman Das Kinger VS SBI Global Factors Ltd. - 2011 Supreme(Bom) 360, Ruchi Soya Industries Ltd. , Mumbai VS State of Maharashtra.


• But foreign cheques drawn/payable abroad? No Indian jurisdiction Pale Horse Designs VS Natarajan Rathnam.


• Drawee chooses, but can't forum-shop malafidely Rajchand Tea Industries and Ors. VS Judicial Magistrate Chhatttisgarh and Anr..

In a Delhi case, jurisdiction upheld as cheque handed, presented, dishonoured there, despite Jaipur transaction Ruchi Soya Industries Ltd. , Mumbai VS State of Maharashtra.

3. Dishonour Reasons and Defenses

• 'Account Closed' = valid dishonour; presumption under Section 139 applies Jatan Kumar Singh VS State of U. P. - 2024 Supreme(All) 250, Vijay Kumar VS State of Uttar Pradesh - 2024 Supreme(All) 848.


• Material alteration? Voluntary corrections by drawer don't void cheque; trial needed S.DEEPALAKSHMI vs ARUMUGAM - 2024 Supreme(Online)(Mad) 62045.


• Cheque as security? Presumption of liability; accused must prove via evidence, not mere denial Santan Financers and Real Eastate Pvt. Ltd. VS Devapa A. Sarvi - 2004 Supreme(Bom) 1555.


• Only drawer liable – not joint holders unless signatories Shalu Arora VS Tanu Bathla - 2023 Supreme(P&H) 906.

'Contact Drawer/Bank' may imply technical issues (e.g., signature mismatch), potentially dismissing if not 'insufficient funds'. But per Jatan Kumar Singh VS State of U. P. - 2024 Supreme(All) 250, it fits if drawer failed to honour.

4. Delay and Condonation

• Complaint within 1 month of notice expiry; explanation in complaint suffices for delay Lakshmi Industries VS Subir Dass - 2022 Supreme(P&H) 2003.

Case Studies: Dismissals and Upholdings

• Dismissed for Procedure: In a construction firm case, no clear notice service date or 1-month filing compliance – application allowed, proceedings quashed Vijay Kumar Mishra VS State of U. P. - 2020 Supreme(All) 67.


• Upholding 'Account Closed': Quashing denied; defence like 'stolen cheque' for trial Vijay Kumar VS State of Uttar Pradesh - 2024 Supreme(All) 848.


• Jurisdiction Win: Mumbai court OK as notice from there Ruchi Soya Industries Ltd. , Mumbai VS State of Maharashtra.


• No Quashing for Disputes: Factual issues (e.g., prior injunction) for trial, not Section 482 Chlorophyl VS Cotton County Retail Limited - 2023 Supreme(P&H) 2638.

Partnership Firms: Unregistered firms can still file; Section 69 Indian Partnership Act doesn't bar criminal complaints Dabasree Das Baishnab VS FI Multimedia Consultants - 2009 Supreme(Gau) 746.

Presumptions and Burden of Proof

• Section 139: Cheque presumed for discharge of liability; rebut by evidence, not cross-exam suggestions Santan Financers and Real Eastate Pvt. Ltd. VS Devapa A. Sarvi - 2004 Supreme(Bom) 1555.


• Notice service: Deemed if refused/'intimated' Santan Financers and Real Eastate Pvt. Ltd. VS Devapa A. Sarvi - 2004 Supreme(Bom) 1555.


• At cognizance, Magistrate checks prima facie compliance; no full enquiry needed Vinod S/o Shri Laxman Das Kinger VS SBI Global Factors Ltd. - 2011 Supreme(Bom) 360.

Key Takeaways for Drawer and Payee

For Payees/Complainants:

• Send notice promptly (day of bank info excluded) Dr. Premish Verma v. Lokesh Sharma - 2008 Supreme(Online)(Chh) 35.


• Detail notice mode in complaint.


• Choose jurisdiction wisely from 5 offence locales.

For Drawers/Accused:

• Ensure funds; avoid post-dated risks.


• Rebut presumptions with proof at trial.


• Challenge procedure early (e.g., no notice) via Section 482.

| Common Endorsement | Section 138 Applicable? | Notes |
|--------------------|-------------------------|-------|
| Insufficient Funds | Yes | Core case Vinod S/o Shri Laxman Das Kinger VS SBI Global Factors Ltd. - 2011 Supreme(Bom) 360. |
| Account Closed | Yes | Presumption applies Jatan Kumar Singh VS State of U. P. - 2024 Supreme(All) 250. |
| Contact Drawer/Bank | Likely Yes | If implies no funds; case-specific Jatan Kumar Singh VS State of U. P. - 2024 Supreme(All) 250. |
| Stop Payment | Yes, if no valid defence. | Trial decides. |

Conclusion: Navigate 138 Complaints Carefully

A Section 138 complaint for 'Kindly contact Drawer/Drawee Bank' isn't automatically dismissed but hinges on notice, timelines, and jurisdiction. Courts prioritize procedure while allowing trial for disputes, upholding NI Act's goal of cheque credibility. Recent rulings show leniency for compliances but strictness on basics.

Remember: Each case turns on facts. This overview draws from judgments like Vijay Kumar Mishra VS State of U. P. - 2020 Supreme(All) 67, Jatan Kumar Singh VS State of U. P. - 2024 Supreme(All) 250, Santan Financers and Real Eastate Pvt. Ltd. VS Devapa A. Sarvi - 2004 Supreme(Bom) 1555. For your '138 complaint regarding bank drawer contact dismissed' scenario, professional advice is essential – outcomes aren't guaranteed.

Stay informed, honour cheques, and consult experts to avoid pitfalls.