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Does 'Payment Stopped by Drawer' Attract Section 138 of NI Act?
Cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) are among the most common criminal complaints in India. A frequent defense raised by accused is that the cheque was dishonoured due to 'payment stopped by drawer', claiming no offence is made out. But does this hold water legally? This post examines key Supreme Court judgments to answer: Whether Payment Stopped by Drawer attracts Section 138 of Negotiable Instruments Act.
We'll break down the law, statutory presumptions, and judicial interpretations. Note: This is general information based on case law. Consult a lawyer for advice specific to your situation, as outcomes depend on facts.
Understanding Section 138 NI Act
Section 138 punishes dishonour of cheques due to insufficiency of funds or exceeding arrangement with the bank. The drawer must be given a chance to pay via statutory notice within 15 days. Non-payment leads to criminal liability.
Key ingredients:
- Cheque issued for discharge of debt or liability.
- Presented within validity period.
- Dishonoured by bank.
- Demand notice sent; no payment within 15 days.
Proviso (b) deems dishonour if funds are insufficient or exceed arrangement. But courts have expanded this. ([
Search Results for "Payment Stopped by Drawer: Attracts Section 138 NI Act?"
2010 4 Supreme 169 • India - Supreme Court
K. G. BALAKRISHNAN, P. SATHASIVAM, J. M. PANCHAL
Negotiable Instruments Act,1881- Sections 138,139- Complaint alleging dishonour of cheque filed by respondent-complainant against ... that cheque was with complainant- The very fact that accused had failed to reply to statutory notice under Section 138 of the Act ... The very fact that accused had failed to reply to statutory notice under Section 138 of the Act led to the inferen....
2017 0 Supreme(SC) 772 • India - Supreme Court
JAGDISH SINGH KHEHAR, J. CHELAMESWAR, S. A. BOBDE, R. K. AGRAWAL, ROHINTON FALI NARIMAN, A. M. SAPRE, D. Y. CHANDRACHUD, SANJAY KISHAN KAUL, S. ABDUL NAZEER
whether privacy is a constitutionally protected value. ... >, 2005 and other Acts – Section 5, Indian Telegraph Act of 1885 – Section ... Our cheques are not merely negotiable instruments but yet the world can learn a vast amount about us by knowing how and with whom ... checks and deposit slips, since the checks are not confidential communications, but negotiable instruments to be used in commercial ... (Regulat....
2001 8 Supreme 227 • India - Supreme Court
K.T.THOMAS, S.N.VARIAVA
Instruments Act, 1881-Section 138-Dishonour of cheque on ground "payment stopped by drawer"-When ... Co. on ground "payment stopped by drawer"-Notice of demand not complied-Complaint filed in the name of Co. and on its behalf by Senior ... cheques issued -Dishonoured on ground "payment stopped#HL_EN....
2017 5 Supreme 577 • India - Supreme Court
JAGDISH SINGH KHEHAR, KURIAN JOSEPH, ROHINTON FALI NARIMAN, UDAY UMESH LALIT, S. ABDUL NAZEER
Question that needs to be answered in this case is only whether triple talaq has any legal sanctity. ... in section 2 – While talaq is governed by Shariat, specific grounds and procedure for talaq have not been codified in 1937 Act. ... or non-fundamentalist – It is not for a court to determine whether religious practices were prudent or progressive or regressive ... Then there are the Negotiable Instruments Acts: and I can cite innumerable enactments which would prov....
1998 2 Supreme 471 • India - Supreme Court
K.T.THOMAS, M.K.MUKHERJEE, S.P.KURDUKAR
dishonoured because payment was stopped-Whether correct? ... cheque when offence-Cheque issued to meet a liability - Payment stopped after issue-Cheque dishonoured-Whether an offence? ... payment it will not preclude an action under Section 138 of the Act by the drawee, (Payee) or the holder of a cheque in due course ... stopped#HL....
2024 0 Supreme(Ker) 952 • India - Kerala
M. B. SNEHALATHA
Shri.Kuchil Kumar Nandi [(1998) 3 SCC 249] a question arose before the Apex Court as to whether dishonour of a cheque on the ground that the drawer had stopped payment was a dishonour punishable under Section 138 of N.I. Act. ... If the argument that dishonour of the cheque for the reason ‘payment stopped by the drawer’ could not constitute an offence under Section 138 N.#HL_STAR....
2024 0 Supreme(All) 848 • India - Allahabad
ARUN KUMAR SINGH DESHWAL
The net effect is that dishonour on the ground that the payment has been stopped, regardless whether such stoppage is with or without notice to the drawer, and regardless whether the stoppage of payment is on the ground that the amount lying in the account was not sufficient to meet the requirement of ... as required under Section 138 of N.I. ... Act, therefore, it would be sufficient for issuing process under Section 138#....
2023 0 Supreme(P&H) 398 • India - Punjab and Haryana
DEEPAK GUPTA
Medchl Chemicals and Pharma (P) Ltd. and another, (2002) 1 SCC 234, by holding that any such instructions to stop payment issued by the accused, will attract Section 138 of the NI Act. ... It is, thus, clear from the authoritative pronouncements of Hon'ble Supreme Court that Section 138 of the NI Act will be applicable even if the cheque has been dishonored either for the reason that account was closed or that drawer had #HL_START....
2023 0 Supreme(All) 2688 • India - Allahabad
VIVEK VARMA
The issue as to whether the dishonour of a cheque on the ground that the 'account is closed' would attract section 138 of the Negotiable Instruments Act has been considered by the Hon'ble Supreme Court in the case of NEPC Micon Ltd. and others v. Magma Leasing Ltd. reported in (1999) 4 SCC 253. ... Magma Leasing Ltd., (1999) 4 SCC 253 that the expression "amount of money .... is insufficient" appearing in Section 138 of the Act is a genus and dishonour for reasons suc....
2023 0 Supreme(Cal) 435 • India - Calcutta
SHAMPA DUTT (PAUL)
The question was whether a dishonor on that ground for that reason was culpable under Section 138 of the Negotiable Instruments Act. ... of the Negotiable Instruments Act will attract when the cheque has bounced due to “drawer's signature differs”. ... The question was whether dishonor of a cheque on the ground that the drawer had stopped payment was a dishonor punishable under Section 1....
• India - Dishonour Of Cheque
S.B.SINHA, CYRIAC JOSEPH
jurisdiction of a court to try an offence under Section 138 of the Negotiable Instruments Act, 1881. ... completion of the offence under Section 138 of the Act. ... JURISDICTION - Territorial Jurisdiction - Negotiable Instruments Act, 1881 - Section 138 - [138] - The court discussed the territorial ... The Pu....
2002 7 Supreme 598 • India - Supreme Court
of cheque on ground of "payment stopped by drawer"-Appellant stopped payment because blank cheque given to another was used by respondent-Respondent ... Negotiable Instruments Act, 1881 -Section 138-Offence of dishonour ... Court reversed the acquittal on a different view-Appeal against-Whether High Court was right? ... when p....
2013 6 Supreme 705 • India - Supreme Court
P. SATHASIVAM, RANJANA PRAKASH DESAI, RANJAN GOGOI
his witness upon oath for taking the decision whether or not to issue process on the complaint under Section 138 of the N.I. ... and to examine him upon oath for taking decision whether or not to issue process on the complaint under Section 138 of the N.I. ... complaint under Section 138 of the N.I#....
2012 8 Supreme 274 • India - Supreme Court
T.S.THAKUR, GYAN SUDHA MISRA
question whether non-matching of signature attracts section 138 of the N.I. ... a genus and dishonour for reasons such "as account closed", "payment stopped", "referred to the drawer" are only species of that ... ; Non-matching of signature attracts section 138 of the N.#HL....
2014 3 Supreme 8 • India - Supreme Court
R.M.LODHA, SHIVA KIRTI SINGH
138 of the N.I. ... 138 of the N.I. ... supply not made – Drawee stopping payment of cheque – Cheque not drawn for an existing debt or liability – Purchaser or drawee of ... Act held that to attract Section 138 of the N.I. ... The purpose....
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