PROPOSITION ON DISHONOUR OF CHEQUE: (138 CRPC)

I. section 148 of NI Act, shall be applicable in respect of appeals against the order of conviction
& sentence for offences U/S 138 of NI Act prior to 0.1.09.2013.[Retrospective effect of sec 148]

i.Surinder Singh Deswal @ COL. S.S. 2019 SCC 739

v. Virender Gandhi paras:8; 9; 10; 14

II. The complainant is bound to explain his financial capacity when questioned by the accused and
if he fails to prove his financial capacity of lending money is perverse, cannot be supported by the
law.

i. Basalingappa 2019 (5) SCC 418

v. Mudibasappa paras:30; 32; 33

III. The presumption is drawn of the existence of legally enforceable debt as per S.139 of NI Act,
factors like source of funds are not relevant if the accused has not been able to rebut the
presumption.

i. Rohitbhai Jivanlal Patel 2019 SCC 389

v.State Of Gujarat & Anr paras:17; 18; 29; 30-32; 36; 37

IV. It is to be presumed that a cheque that is signed and given to the receiver (blank or not) is given
to discharge whole or part of the debt or liability under section 138 of NI. The existence of a
fiduciary relationship between the payee and drawer of the cheque would not disentitle the payee
from the presumption under section 139 of NI. The subsequent filing of an unfilled signed cheque
is not an alteration.

i. Bir Singh 2019(4)SCC 197

v. Mukesh Kumar paras:11; 12; 18; 19; 22; 23; 24; 29;
32-34; 36; 37; 38

V. The complaint U/S 138 NI Act ,is maintainable when there is dishonour of cheques issued under
& in pursuance of the agreement to sell . Through an agreement to sell does not create any interest
in immovable property & it constitutes a legally enforceable contract B/W the parties.

i. Ripudaman Singh 2019 (4) SCC 767

v. Balakrishna paras: 9; 10; 12

VI. The criminal complaint based on second notice by the holder of cheque is maintainable U/S
138 of NI Act.
i. Sicagen Indian Limited 2019 (4) SCC 271
v. Mahindra Vadineni & Onr paras: 6-8; 10

VII .Section 139 of the Act mandates that it shall be presumed, unless the contrary is proved, that
the holder of a cheque received it, in discharge, in whole or in part, of a debt, or liability. The
expression "unless the contrary is proved" indicates that the presumption under Section 139 of the
Act is rebuttable. For determining whether the presumption has been rebutted, the test of
proportionality must guide the determination. The standard of proof for rebuttal of the presumption
under Section 139 of the Act is guided by a preponderance of probabilities.

i. ANSS Rajashekar 2019 SCC 185

v. Augustus Jeba Ananth paras:10; 14; 15; 16

VIII. The complaint U/S 138 & 142 of NI Act is not maintainable without lapse of the 15 days
notice period stipulated.
i. Yogendra Pratap Singh 2014 (14)SCC 812
v. Savitri Pandey & Anr paras:1;4;7;8;9; 12;16;17

IX. Offence U/S 138 & 142 is person specific and disclosure of the name of the person drawing the
cheque is one of the factual allegations which a complaint is required to contain & a person signing on
behalf of the company does not become the drawer of the cheque.
i. N. Harihara Krishna 2018 (13)SCC 663
v. J. Thomas paras: 22; 27

X. Reminder notice to the drawer of the cheque for the first notice that was not received or
delivered to the drawer due to any reason cannot be construed as an admission of non- service of
first notice under the NI Act.
i. N.Parameswaran Unni 2017(5)SCC 737
v. G. Kannan paras: 15; 16

XI.Compensation for dishonour of cheque is recoverable from the accused even if 'default
sentence' has been suffered U/S/P of Cr.P.C & I.P.C.
i. Kumaran 2017 (7) SCC 471
v. State of Kerala & Ors paras: 2;6;8;10;17;18;21; 24; 25;26; 27

XII. Offences U/S 138 & 141 of NI Act, the law requires that the complaint must contain a specific
averment that the director was in charge of & responsible for, the conduct of the company business
at the time when the offence was committed.
i. A.R.Radha Krishna 2019 SCC 357
v. Dasari Deepthi & Onr paras: 9;10 ;15;16

XIII. A fee amount claim by a lawyer based on percentage of subject matter in litigation cannot be
basis of a complaint U/S 138 of NI Act.
i. B . Sunitha 2018 SCC 638
v. State of Telangana paras:7; 12; 16

XIV. Here denial of the cheque being issued by the accused does not shift the burden of proof. The
presumption U/S 138 of NI Act stands valid for the accused.
i. Krishna Rao 2018(8)SCC 165
v. Shankar Gouda paras: 19; 20; 22