SC: Deposit of cheque with full amount even not mentioning part payment is not offence u/s 138

Last updated: 12 October 2022

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The Supreme Court has ruled that presenting a cheque for its full amount without endorsing any part payments made by the borrower does not constitute an offence under Section 138 of the Negotiable Instruments Act. The court found that if a portion of the debt has already been settled, the cheque no longer represents the legally enforceable debt at the time of encashment. Therefore, a statutory notice demanding the full amount, without acknowledging the part payment, is invalid.

Court :
Supreme Court of India

Brief :
No Offence for dishonor of cheque under provisions of Section 138 of the NI Act, 1881 is made out if the cheque is presented for full amount without endorsing the part payment made by the borrower after issuance of the cheque.

Citation :
Criminal Appeal No. 1497 of 2022; October 11, 2022

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