Supreme Court: Part-Payment Made After Cheque Is Drawn Must Be Endorsed On Cheque As Per Section 56 NI Act

In view of the discussion above, we summarise our findings below:

(i) For the commission of an offence Under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation;

(ii) If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn 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;

(iii) 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 Act. The cheque endorsed with the payment made may be used to negotiate 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 will stand attracted;

(iv) The first Respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the 'legally enforceable debt' on the date of maturity. Thus, the first Respondent cannot be deemed to have committed an offence Under Section 138 of the Act when the cheque was dishonoured for insufficient funds; and

(v) The notice demanding the payment of the 'said amount of money' has been interpreted by judgments of this Court to mean the cheque amount. The conditions stipulated in the provisos to Section 138 need to be fulfilled in addition to the ingredients in the substantive part of Section 138. Since in this case, the first Respondent has not committed an offence Under Section 138, the validity of the form of the notice need not be decided. {Para 30}

 IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 1497 of 2022

Decided On: 11.10.2022

Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel and Ors.

Hon'ble Judges/Coram:

Dr. D.Y. Chandrachud and Hima Kohli, JJ.

Author: Dr. D.Y. Chandrachud, J.

Citation: MANU/SC/1294/2022,(2023) 1 SCC 578.

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Whether offence of dishonour of cheque is made out against the accused if he has made part payment of cheque amount after dishonour of cheque?

In view of the discussion above, we summarise our findings below:

(i) For the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation;

(ii) If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn 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;

(iii) 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 Act. The cheque endorsed with the payment made may be used to negotiate 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 will stand attracted;

(iv) The first respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the ‘legally enforceable debt’ on the date of maturity. Thus, the first respondent cannot be deemed to have committed an offence under Section 138 of the Act when the cheque was dishonoured for insufficient funds; and

(v) The notice demanding the payment of the ‘said amount of money’ has been interpreted by judgments of this Court to mean the cheque amount. The conditions stipulated in the provisos to Section 138 need to be fulfilled in addition to the ingredients in the substantive part of Section 138. Since in this case, the first respondent has not committed an offence under Section 138, the validity of the form of the notice need not be decided. {Para 30}

Reportable

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

Criminal Appeal No. 1497 of 2022

Dashrathbhai Trikambhai Patel  Vs. Hitesh Mahendrabhai Patel & Anr. 

Author: Dr Dhananjaya Y Chandrachud, J

Citation: October 11, 2022

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Whether the court should set aside exparte decree on part payment of suit amount?

As pointed out earlier, the suit claim was for damages. The damages to the property if any, can be ascertained only after the parties adduce the oral and documentary evidence. We have no reason to believe that the Appellant would have benefited by deliberately not contesting the suit as they would in any event be saddled with interest if their conduct was to drag and prolong the suit. Considering the nature of the claim and other facts and circumstances and in the interest of justice, we are of a view that an opportunity has to be given to the Appellant to contest the suit subject to terms. The Appellant has also in that regard shown its bona fide by depositing Rs. 60,00,000/- in compliance of the order dated 18.02.2019. By the order dated 24.01.2020, we have also directed the Appellant to deposit further sum of Rs. 35,00,000/- for which the Appellant sought for some more time for compliance. Considering the request, two months further time is granted to the Appellant for deposit of the said amount.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 1890-1891 of 2020 

Decided On: 02.03.2020

 Aviation Travels Pvt. Ltd. Vs.  Bhavesha Suresh Goradia and Ors.

Hon'ble Judges/Coram:

R. Banumathi and A.S. Bopanna, JJ.

Author: R. Banumathi, J.

Citation: (2020) 4 SCC 680

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Whether the cause of action for the dishonour of cheque is defeated if accused makes part payment of cheque amount?

Regarding part payment he has relied upon a decision of the Bombay High Court in the case of Vishnu Bhat Vs/. Narayan R. Bandekar and Others, reported in MANU/MH/0936/2007 : 2008 (2) ICC 494 wherein the Single Bench of the Bombay High Court held that once the cheque is dishonoured, the offence is committed and any payment subsequent thereto will not absolve the accused of liability of criminal offence.

21. Regarding point No. 1: this Court is of the considered view that simply because Rs. 1 lakh was received by the complainant after issuance of statutory notice is enough to deviate from the cause of action. The decision of Kerala High Court as passed in Shiju K. (Supra) can have only persuasive value as it is a decision of the other High Courts. This Court is not unmindful of the other decisions on this point as reported in MANU/SC/8178/2006 : 2006 Cri LJ 3276 (Madras)(Synergy Credit Corporation Ltd. Vs. Midland Industries Ltd.) and 1999 (3) Crimes 504 (Andhra Engineering Corpn. Vs. TCI Finance Ltd.) that merely because the accused has paid some amount of the cheque but that will not absolve him from the legal enforceable liability. This Court has also relied upon the decision of the Bombay High as cited by the opposite party as passed in Vishnu Bhat (Supra). Thus this Court is satisfied that simply because of Rs. 1 lakh was paid by the accused/revisionist after issuance of the statutory notice that is not enough to take away the right of the holder of the cheque to enforce the cause of action regarding non-payment of the residue amount.

IN THE HIGH COURT OF CALCUTTA

C.R.R. 856 of 2013 and C.R.A.N. 1728 of 2016

Decided On: 06.12.2016

Jahangir Molla  Vs.  Md. Alim Mallick and Ors.

Hon'ble Judges/Coram:

Indrajit Chatterjee, J.

Citation: MANU/WB/1132/2016

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