Negotiable Instruments

The period of limitation for issuing legal notice under section 138 ( c ) of the Negotiable Instrument Act ( NI Act) and filing complaint under Section 142 (1) (b) of the NI Act is settled in M/S. Econ Antri Ltd v M/S. Rom Industries Ltd. & Anr [2013 (3) KHC 659].

A cheque which has been issued by a person but presented by the drawee after his death, cannot be paid by the bank. On the death of the drawer of a cheque, the cheque issued by him ceases to be a valid cheque. The reason is that on the moment of the death of the drawer of the cheque the balance amount available on his bank account will vests in his nominee or legal heir.

The appeal against the acquittal of the accused in a cheque bounce case can be filed only before the High Court, says the Calcutta High Court in Ms. Todi Investors v Ashis Kumar Dutta & Another.

An authorised signatory of a company or firm will not be liable for prosecution in a cheque case, under section 138 of the Negotiable Instrument Act (NI Act) without the companies arraigned as an accused. This is what the High Court of Kerala says in Velayudhan Pilla S v Chellath Franklin and Another (2021 (1) KLD 753).

The five elements of a cheque dishonor case are drawing the cheque by the accused on an account maintained by him, presentation of the cheque to the Bank by the payee, returning the cheque unpaid by the drawee bank, the payee issuing a demand notice to the drawer of the cheque, and the failure on the part of the drawer to make payment within 15 days of the receipt of notice. When the five elements exist then the payee has a valid ground for filing a cheque case. The Magistrate while taking cognizance has to look into whether the ingredients have been made out.

A set of guidelines have been issued by the Supreme Court (SC) in speeding up cheque cases, in a judgement delivered on 5th March 2020 in Makwana Mangaldas Tulsidas v…