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INTRODUCTION: The Negotiable Instruments Act, 1881 is an Act to define the la relating to !

romissor" notes, bills of e#change and che$ues% This Act has been amended se&eral times commencing from 188' till ())(% The most im!ortant amendment is b" Act ** of 1+88 and b" &irtue of cha!ter ,-II as introduced b" the .an/ing, 0ublic 1inancial Institutions and Negotiable Instruments la s 2amendment3 Act, hich came into force from )14)541+8+% The introduction of Cha!ter ,-II i%e%, sections 168 to 15( of the Negotiable Instruments Act, for the !rosecutions relating to the offences of dishonour of che$ues% The dishonour of che$ues became !o!ular and fre$uent in courts of la and the la relating to the same de&elo!ed in such a ra!id !ace co&ering almost se&eral as!ects hich ma" arise in the da" to da" dis!osal of such cases b" the courts% Cha!ter ,-II of Negotiable Instruments Act has been lastl" amended b" Negotiable Instruments 2Amendment and 7iscellaneous !ro&isions3 Act '' of ())( and the same has been came into force %e%f%, )*4)(4())6% As !er the latest amendments the im!risonment has been e#tended to ( "ears% The issuing of notice ithin 6) da"s after the recei!t from the ban/ regarding return of che$ue as un!aid and further after amendment to 8ec%15( of N%I% Act, the cogni9ance of com!laint ma" be ta/en b" the court after the !rescribed !eriod i%e%, be"ond 6) da"s after recei!t of notice b" dra er, that the com!lainants to satisf" the court that he had sufficient cause for not ma/ing a com!laint ithin such !eriod% 8ec%168 to 15( of N%I% Act deals ith :

i3 8ec%168 deals ith the offence of dishonour of che$ue and the !unishment there for% ii3 2a3 8ec%16+, deals ith !resum!tion that the holder of a che$ue in discharge in hole or in !art of an" debt or liabilit": 2b3 8ec% 15), the defence hich ma" not be allo ed in an" !rosecution under 8ec%168% The dra er that he had no reason to belie&e hen he issued the che$ue that it ma" be dishonoured on its !resentation: 2c3 8ec%151, deals ith offence b" a com!an" !rescribing different burden and onus of !roof bet een !ersons in4charge of and res!onsible to the com!an" for the conduct of its business and !ersons, ith hose consent or conni&ance or due to neglect on his !art, the offence had been committed, ma" be stated to fall under ;e&idence as!ect<% iii3 8ec%15(, deals ith the cogni9ance of an offence !rescribing the method or mode of !referring a com!laint and the forum before hich the com!laint has to be !referred, besides !rescribing the !eriod, ith in hich the com!laint is to be !referred from the time of accrual of the cause of action, not ithstanding an"thing contained in the code ma" be stated to fall under ;!rocedural< and ;limitation< as!ects% The amendments made to N%I% Act in ())( also includes the insertion of ne sections 156 to 15=% The ne sections deals ith !o er of court to tr" cases summaril", mode of ser&ice of summons, e&idence of affida&it, ban/ sli! as !rima4facie e&idence and offences to be com!oundable under N%I% Act%

I% C>?@U?: Under the N%I% Act, a che$ue is an instrument hich is negotiable b" deli&er"% The dra er is discharged hen !a"ment is made in due course% In sim!le terms, this means that hen che$ue is tendered there is a !resum!tion that !a"ment ould be realised in due course, and hence the date of !a"ment is considered to be the date on hich the che$ue is deli&ered, regardless of hen the che$ue is actuall" !resented for !a"ment% The origin of che$ues can be traced e&en from 1=th centur" on ards in ?ngland% In the case of 8tedman -s% Aooch, it is obser&ed that !a"ment b" negotiable instrument is a conditional !a"ment, hich means that if the negotiable instrument is dishonoured on !resentation the creditor ma" consider it as aste!a!er and resort to its original demand% It has been obser&ed in B.enCamen on 8aleD, 8th edition, it as stated that !a"ment ta/es effect from the deli&er" of the bill, but might get defeated b" the ha!!ening of the condition of non !a"ment at maturit"% In B."les on .illsD, ()th edition the !osition as summerised as ;A che$ue, unless dishonoured is !a"ment<% Under the Common Ea of ?ngland, the rule is to the effect that the sending of a che$ue in !a"ment of debt is subCect to the condition subse$uent that the che$ue must be met on !resentation% In the >igh Authorit" of Ro"al .an/ of 8cotland -s% Tottenham, 18+5 E,,I Ea Times Re!ort 1*8, it as held that a che$ue is contract bet een the !arties, and it is for a Cudge at the trial to construe that contract b" reading hat is ritten u!on it%

II% 0O8T4DAT?D C>?@U? : The !ost4dated che$ue becomes a che$ue under the Act on the date ritten on it and the si# months !eriod has to be rec/oned for the !ur!ose of sec%168 of N%I% Act from the said date% A !ost4 dated che$ue cannot be !resented before the ban/ and as such the $uestion of its return could not arise% It is onl" hen the !ost4dated che$ue become a che$ue ith effect from date sho n on the date of che$ue% A !ost4dated che$ue carries ith it an im!lied notice to the effect that for the !resent there are no de!osits, but at the same time assuring that the funds ill be a&ailable b" the date it becomes due 21+'* 213 7adras Ea Fournal 5=13% 0ost4dating of bills of e#change is allo ed both in ?nglish and American Ea % There is no !rohibition in the Indian Acts against !ost4dating and !romissor" not hich is !ost4dated is thus an effecti&e negotiable instrument through it cannot be sued u!on till after that date !asses% III% 8TO0 0AG7?NT O1 A C>?@U? : In s!ite of the ci&il remed", 8ec%168 is !rimaril" meant to !re&ent dishonest" on the !art of a dra er% 8ec%168 dra s !resum!tion that one commits the offence if he issues the che$ue dishonestl" and che$ue has been dra n and issued to the !a"ee and the !a"ee as the !resenter of che$ue and thereafter , if an" instructions are issued to the ban/ for non4!a"ment and the che$ue is return to !a"ee ith an endorsement ;!a"ment sto!!ed b" dra er<, it amounts to dishonor of che$ue 21++* 2(3 8CC =6+3 HAIR 1++* 8C (66+% ?&en if a che$ue is dishonored because of ;sto! !a"ment< instruction to the ban/, 8ec% 168 ould get attracted 21++8 263 8CC (5+3% The lu#ur" of Bsto! !a"mentD instructions b" the dra er to co&er4u! real insufficienc" funds ould no longer be a&ailable to dra er as !er the la of the land%

I-% R?4-AEIDATION O1 A C>?@U? : There is no !ro&ision in the Negotiable Instruments Act or in an" other la , hich sti!ulates that a dra er of a negotiable instrument cannot re4&alidate it% It is al a"s o!en to a dra er to &oluntaril" re4&alidate a negotiable Instrument, including a che$ue 2AIR ())( 8C 683% -% E?AAEEG ?N1ORC?A.E? D?.T: It is clear from the e#!lanation to 8ec%168 of the Act, that the che$ue co&ered b" the said section must be relatable to enforceable or debt hich must be e#isting as on the date of issuing of the che$ue% 1or the !ur!oses of this section, Bdebt or other liabilit"D means a legall" enforceable debt or other liabilit"% In 1++= Crl% Ea Fournal 1+5( A%0%, it as held that on the date of issuing of che$ue material as not su!!lied b" com!lainant and the goods as found not of agreed $ualit"% The che$ue as !resented third time after accused intimated about reCection of material% It as held that there as no infirmit" in the reasoning of trial court that on the date of che$ue there as no e#isting debt or liabilit" and as such no offence as constituted uIs% 168 of N%I Act% Jhere che$ues issued as securit", on dishonour of such che$ue, not offence under 8ec%168 of the Act 2())1 2(3 RCR 2Crl%3 =' 703 also see ())( 263 Crimes 15' 2 RaC3%

CONDITION8 TO INITIAT? CRI7INAE% ACTION UI8%168 O1 N%I% ACT : a3 A che$ue must ha&e been dra n b" a !erson on an account maintained b" him for !a"ment of an" sum of mone" to another !erson from out of the account: b3 The che$ue must ha&e been issued for the discharge, either in hole or in !art, of an" debt or other liabilit", though, in the absence of !roof to the contrar", it shall be !resumed that it as issued for the same: c3 The che$ue shall be returned b" the ban/ un!aid K i3 either because of the reason insufficient funds to honour the che$ue: or ii3 because it e#ceeds the amount arranged to be !aid from the account b" an agreement ban/% ith that

Thus, the dishonour of the che$ue b" the ban/ under the abo&e mentioned circumstances shall constitute an offence and the offender is liable to be !unished uIs%168 of N%I% Act ith im!risonment, hich ma" e#tend to ( "ears or ith fine, hich ma" e#tend to t ice the amount of che$ue, or ith both% CA8? EAJ ON DI8>ONOUR O1 C>?@U?8 1% Account closed : Account closed as held to be the offence uIs%168 of N%I% Act 2AIR 1+++ 8C 1+'(3% The che$ue returned on the ground of close of account is an offence 21++8 2(3 Ea 8ummar" 5*13% Jhere the che$ue as dishonoured on ground of account closed, the accused cannot esca!e from liabilit" of the offence 21++8 2(3 AED 2Crl%3 (8* Lar3% (% Issuance of post-dated cheque and closing account : Jhere the accused issued the !ost4dated

che$ue and had also closed his account in the ban/, in such a case he is liable to be !rosecuted under 8ec%168 21++8 2(3 AED 2Crl%3 1== .om3% 6% Incomplete Signature : Dishnour of che$ue because of incom!lete signature on che$ue of dra er% >eld: did not attract sec% 168 4 2())( 2=3 8CC '613% 5% Cheque issued by partner : Com!laint uIs%168 of N%I% Act against firm and its !artners% No allegation in the com!laint that the !artner as in4charge of and as res!onsible to the affairs of the firm K held: not maintainable against the !artner 2())( 2 =3 8CC *''3% '% Offences committed by a company : Jhere an offence is committed b" a com!an", either com!an" can be !rosecuted or the !erson4in4charge of the com!an" can be !rosecuted or both of them can be !rosecuted 21++8 2(3 Crimes 5)+3% *% Discharge of fathers debt: 1ather of the accused, but not the accused o es debt to com!lainant% Com!lainant obtained che$ue from the accused b" force% Che$ue as not issued in discharge of father<s debt% Accused cannot be !rosecuted 2())6 2*3 AED 2NOC3 *53% =% Cause of Action: Once notice is issued under 8ec%168, failure to initiate !rosecution forfeit the right to !rosecute 2 1++8 2=3 8u!reme ()3% ould

8% Object of issuing notice: The obCect and !ur!ose of issuing notice to the dra er is to gi&e information to the !erson ho had issued the che$ue that it as dishonored and gi&e him an o!!ortunit" to ma/e good the amount ithin 1' da"s of the recei!t of the information 21++= 2883 Com!an" cases 5663% +% Notice once issued, Ch$% cannot be !resented for collection: It is settled that the !a"ee is free to !resent the che$ue re!eatedl" ithin its !eriod of &alidit" an" number of times, but once notice has been issued the dra ee to a&ail the cause of action arising thereu!on and file the com!laint ithin the sti!ulated !eriod 2())( 213 AED 2Crl%3 6+= 2A03 21++8 8CC 2Crl%3 15=1 follo ed3% 1)% Notice by fa and !egd" post : Notice can be sent b" fa# and mode of sending notice not to be restricted to !ost or messenger 2AIR 1+++ 8C 1*)+3% 11% Omission of Chq" No" in notice : The number on the che$ue has no rele&ance in a !roceeding uIs%168 of N%I% Act% 8ec%' and 8ec%* of the Act does not s!ecif" that, the che$ue or bill of e#change should bear a number% There is also nothing in 8ec%168 of the Act to sho that the number of the dishonoured che$ue also should be mentioned in statutor" notice or in com!laint 2())5 Cr% EF =1( A03% 1(% Ad#ocate did not sign notice: The mere fact that the ad&ocate for com!lainant did not sign the notice, ma" not ma/e it in&alid 1++* Crl% EF ((*5 Lar3% 16% Issue of second notice$ Che$ue issued b" the res!ondent as dishonored K !resented again K again dishonored% The notice issued b" the com!lainant at the time of first dishonor as not ser&ed on res!ondentIaccused, but the fact remains that the notice has been issued for second time% Therefore, cause of action stood terminated 2())6 211=3 Com!an" Cases 27adras3% 15% Accused refused to recei#e notice : Jhere accused ha&e refused to recei&e notice, e&en then com!laint to be filed after e#!ir" of 1' da"s from the date of recei!t of notice 21++= 263 crimes 55'3% In case of refusal to recei&e the notice, it amounts to acce!tance of notice and date of refusal to recei&e such notice shall be treated as the date of recei!t of such notice% In such case

the !eriod of fifteen da"s has to be com!uted from the date of refusal 2AIR 1++* 8C 66): AIR 1+8+ 8C *6)3 1'% %#ading notice : Jhere accused had e&aded ser&ice of notice relating to dishonour, it amount to constructi&e notice 2())1 2(3 AED 2Crl%3 27ad3 16=3% ill

1*% &ostal endorsement 'not found : Notice as dul" gi&en but the same as returned unser&ed ith !ostal endorsement ;not found<% If a registered letter addressed to a !erson at his residential address does not get ser&ed in the normal course and is returned it can onl" be attributed to the addressee<s o n conduct 21++8 213 CCR 1113% Once the letter is deli&ered to the !ost office he has no control o&er it% It is then !resumed to ha&e been deli&ered to the addressee under 8ec%(= of the Aeneral Clauses Act 2AIR 1+8+ 8C *6)3% 1=% Ci#il Suit ( Criminal Complaint : 1iling of ci&il suit and filing of criminal com!laint are not alternati&e remedies and the" are different t"!es of rights 2 1++5 Criminal Ea Fournal 88=3% The mere !endenc" of a ci&il dis!ute ill not oust the Curisdiction of a Criminal Court from ta/ing cogni9ance of an offence on a com!laint under 8ec%168 of N%I% Act 21++8 Crl% EF ''+ H 1++8 2(3 AED 2Crl%3 6)) AuC3% 18% Stay of suits : 0ending of criminal matters ould not be an im!ediment to !roceed ith the ci&il suits% On the other hand, the courts are rarel" sta" the criminal cases on onl" hen the com!elling circumstances re$uire the e#ercise of !o er 21++* 8CC 2Crl%3 5**3 H 1++* 263 8CC 8=3% 1+% Sec" )*+ of N"I" Act ( Sec" ,-. of I"&"C %: Jhen the che$ue as dishonored for insufficient funds, such !erson issuing a che$ue is liable for offence of 8ec% 168 of N%I% Act but not uIs% 5() of I0C 21+8+ Cuttac/ Ea Times =1+3% ()% /ime barred debt$ Jhere che$ue itself as issued for a time barred debt, there cannot be con&iction under !ro&isions 2 1++= 2(3 Crimes *'83% Jhere the loan as ta/en in 1+8' and che$ue as issued in 1++) and the loan is barred b" limitation, dra er of che$ue cannot be !rosecuted 21++= 213 AET 2Cri%3 ')+ (1% &ayment after receipt of notice: Jhere accused made tender of amount after recei&ing notice, cannot be &isited ith an" conse$uences for non4!a"ment 21++5 Crl% Ea Fournal (=*83% ((% !efer to dra0er : The ban/ endorsement Brefer to dra erD also ma" fall ithin the ambit of the !ro&isions of 8ec% 168 of N%I% Act % 4 1++5 Crl% EF (8=5: 1++' Crl% EF 68(8: 1++5 213 Crimes *)*: 1++' Crl% EF 6)+8% (6% !equest not to present the cheque : Jhen after issuance of a che$ue and before !resentation for encashment, a re$uest as made b" the husband of the accused not to !resent the che$ue% In s!ite of the same it as !resented and a return% Com!laint is not maintainable 2 1++= 213 Crimes ''3: 1++* 263 Crimes 68' 27ad3 H 1++* 253 CCR +( 27ad3% (5% Dismissal of complaint for default: Dismissal of com!laint not !ro!er 2())( 2=3 8CC =(*3% ('% Dismissal of complaint for default and restoration$ Jhere the com!laint is dismissed for default, in restoration a!!lication, the com!lainant must assign a &alid reason as to hat !re&ented him from coming to the court b" the time hen the case as called 21++8 .C *6 2A03% 1or securing the ends of Custice, the 7agistrate is em!o ered to restore the com!laint filed under 8ec%168 of the Act 2())1 Crl% EF (8(1 Lant3% >o e&er, contrar" &ie !re&ail% The order of dismissal

of a com!laint b" a criminal court due to the absence of the com!lainant is a !ro!er order 2AIR 1+8* 8C 155)3% A second com!laint is !ermissible in la if it could be brought ithin the limitation im!osed b" the 8u!reme Court in the case re!orted in AIR 1+*( 8C 8=*% (*% Dismissal of complaint and appeal thereof : Dismissing com!laint due to non4a!!earance of com!lainant resulting in ac$uittal of accused% Re&ison is not maintainable and onl" a!!eal lies to >igh Court uIs%6=8 253 of Cr% 0%C% 2 II ())6 CCR 68= >03% (=% Default of fine u1s")*+ of N"I" Act % : 8entence of im!risonment in default of !a"ment of fine K Im!osition of im!risonment and challenge thereof% 8ec%168 does not !ro&ide for such sentence% >ence, sentence in default of fine set aside 2 ())* 2+3 8CC =85%

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