Negotiable Instruments Act, 1881
Section 138—Dishonour of cheque—Legally enforceable debt—For the commission of an offence under Section 138 of the Negotiable Instruments Act, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation.
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Section 138—Dishonour of cheque—Legally enforceable debt—If the drawer of the cheque pays a part or whole of the sum between and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque.
[Para 30]
Section 138—Dishonour of cheque—When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Negotiable Instruments Act—Cheque endorsed with the payment made may be used to negotiable the balance, if any—If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 of the Act will stand attracted.
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Section 138—Dishonour of cheque—Acquittal—First respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity—Sum of rupees twenty lakhs represented on the cheque was not the “legally enforceable debt” on the date of maturity—First respondent cannot be deemed to have committed an offence under Section 138 of the Negotiable Instruments Act when the cheque was dishonoured for insufficient—Acquittal upheld.
[Para 30]
Section 138—Dishonour of cheque—Validity of notice—Notice demanding the payment of the ‘said amount of money’ has been interpreted by the judgments of the Apex Court to mean the cheque amount—Conditions stipulated in the provisos to Section 138 of the Negotiable Instruments Act need to be fulfilled in addition to the ingredients in the substantive part of Section 138 of the Act—Since the first respondent has not committed an offence under Section 138 of the Act, the validity of the form of the notice need not be decided—Appeal dismissed.
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