Stop payment will come under NI 138 offence
It is well settled that an offence of dishonour of cheque under Negotiable instruments Act 1882 will be attracted even if the cheque was dishonoured for the reason “payment stopped” by the drawer, says the Kerala High Court of Kerala in para 21 of the judgement in Minerals India Private limited v P K Raju [ 2024:KER:71854].
SC says stop payment would not obviate NI 138 offence
Dishonour on the ground that the payment has been stopped, regardless whether such stoppage is with or without notice to the drawer, and regardless whether the stoppage of payment is on the ground that the amount lying in the account was not sufficient to meet the requirement of the cheque, would attract the provisions of Section 138, says the SC in M/s Laxmi Dyechem v State of Gujarat & Others.
The SC relied on a three-Judge Bench decision of this Court in Modi Cements Ltd. v Kuchil Kumar Nandi [(1998) 3 SCC 249] in arriving at this decision.
Stop payment will fall under dishonour of cheque
Not only the cases of dishonour of cheques on account of insufficiency of funds or on account of exceeding of arrangement but the cases involving dishonour of cheques on account of “stop payment“, “account closed” and “Signature Mismatch” also fall within the ambit of offence under the Section 138 of the Negotiable Instruments Act (NI Act), states the Jammu and Kashmir and Ladakh High Court Mohammad Shafi Wani v Noor Mohammad Khan..
The High Court adds that the Section 138 of the Negotiable Instruments Act (NI Act) must be interpreted in a liberal manner so as to achieve the object for which the said provision has been enacted.
