Whether farmers can be convicted in cheque bounce cases for non-payment of loans entered in “bahi khata.?

In a significant judgment expected to prevent exploitation of farmers by commission agents, the Punjab and Haryana High Court has made it clear that entries in the “bahi khata” are not enough to prove that loan has been sanctioned to cultivators. The court has also said that farmers cannot be convicted in cheque bounce cases for non-payment of loans entered in the “bahi khata.”

The loaner, in fact, is debarred from filing a complaint for bounced cheque under Section 138 of the Negotiable Instruments Act on basis of such entries as these are not negotiable instruments or documents for advancing loan.

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