On account of great demand from our visitors, we have created this special page on sec. 138 NI Act dealing with dishonour of cheques. Summary of important judgments are given below. The details of the judgments may be found in standard legal digests.

Our Weekly Mails are DRT Guide and gold mine of practical information for the borrowers and guarantors :- The visitors of this web site particularly Borrowers and Guarantors will be immensely benefited by our weekly mails, all previous issues from 1st one till the last one may be viewed by clicking Drt Solutions Weekly Mail for Borrowers & Guarantors  Separate web pages have been created to contain these mails in batches of 10 so that pages open up fast. These mails are DRT Guide and gold mine of information on current topics giving lot of practical suggestions and comments. Any new comer to this site must go through all the weekly mails right from the issue no 1 to the latest. If possible please spread the reference of this web site and the weekly mail among the persons, borrowers and guarantors who are the bank victims. If anyone desires to get these mails regularly, he may write to us for inclusion of his e-mail ID in the regular mailing list. The weekly mail is issued on every Friday morning 6 AM. The particular issue of the weekly mail is first published on the web site and then mails are sent. These weekly mails have become quite popular among the borrowers and guarantors in the country as we are getting huge no of mails appreciating the same. We welcome suggestions for improvements as well as the topics on which more information is required.

Important Announcement - Video Arguments presented in Indian Court for the First Time :- We are pleased to announce that on 10th October 2007, proposed 'Computer Presentation' was held for the first time in the country by Mr. Ram Kishan before Hon'ble District Judge, Indore and the 'Video Arguments' were submitted and shown to the said Judge on 15.10.07. Thus a history has been made in the Judicial Management in our country. We have prepared two DVDs, one showing the method and system for such presentation, its advantages with a practical application. Another DVD showing the actual presentation before the District Judge, Indore on 10th October 2007. we have prepared an article titled 'Computer Presentation & Video Arguments' vide click here Court Technologies IT Presentation Video Arguments

DVDs containing Video Record of DRT Conference at Indore and Chennai:- All the proceedings were video recorded and the DVDs containing the same are available. Any one desiring to have the DVDs may send through e-mail their postal address, name of the company, and if possible details of the pending DRT case or Securitisation case and the amount involved, name of concerned person and his contact details including phone nos etc. to us. During these conferences, eminent DRT experts using PowerPoint Presentation dealt with all the aspects of Bank Litigations and Borrowers Defence. The participants from all over the country were highly impressed and benefited from the knowledge thus gained.

Counter-claim is the only defence for the borrowers against Notice under Securitisation Act and or Original Application under the DRT Act:- Under the present provisions of law, the only legal defence for the borrowers is Counter-claim giving quantum of loss and damages suffered due to wrong doings of the lenders. The pleadings must be prepared by a person having mastery of facts and mastery of law. The documents such as project report, application for financial assistance, loan sanction letters, correspondence, balance sheets, annual reports need to be referred to properly keeping in view the law of pleadings, law of torts, law of damages, principles of natural justice, equity and good conscience. If you are unable to get such pleadings prepared, our professional services may be utilized. With our drafting of pleadings, you get additional advantage of expert advice during course of litigation from beginning to end. Since our clients are from all parts of the country and due to our focussed attention, you get complete and exhaustive guidance. All our clients are having upper hand over the lenders. In many cases the lenders have come forward to waive total interest and settle at fraction of the principal amount. In one of the case the proposal of the lender is waive the total claim provided the borrower withdraws the damage claim, which the borrower has declined.

Our approach of counter-claim or damage suit against the lenders fully endorsed by authorities:- Two leading authorities in law and banking both having more than 40 years of experience in law and banking have fully endorsed our approach to counter-claim in DRTs or damage suit against the lenders in civil courts. You may click the pages  Video Interview - BS Malik, Sr. Supreme Court Advocate and Video Interview - GC Garg, Ex-Senior Bank Official which give the contents of the video clips of interview with them. You may take out the print and study the same. Listening to the video interview will be further useful. You may select the clips for replay for discussions with your colleagues as well as the advocates. You may obtain the VCDs from us to listen to their views which will be quite useful to all the borrowers and guarantors as well as to their advocates. The counter-claim or damage suit against the lenders are the only legal defence and we specialize in framing such defence. We have handled several such cases throughout the country. You may contact us on phone to know further details.

DRT, drtsolutions, Debt Recovery Tribunal, DRT matters, DRT WS, DRT Legal Opinions, DRT Arguments, DRT Documents, Appellate DRT, Bank litigations, Securitisation, Counter-claims, NPAs Settlements, checking of bank accounts and documents etc., expertize in all these matters past 14 years being a Leading Law Firm. Legal BPO and offshore BPO is our new activity for which we have launched new web site www.usindolegal.com

Highlights:- All problems of Debt Recovery Tribunals i.e. DRT and Securitisation Act are tackled by us. People from all over the country are phoning us, then visiting and getting their problems solved. Please visit Home Page and other Pages also

Our Client files damage suit of Rs. 1825 Crores against a bank and a financial institution in Chandigarh:- Our Client, an eminent Supreme Court Advocate (practice more than 25 years in Supreme Court) has filed a damage suit of Rs. 1825 Crores in Chandigarh on 13.01.05 against a bank and a financial institution. The said damage suit was drafted by us and it runs in 118 pages having documents of 537 pages. In a video interview lasting more than 30 minutes on 23.01.05, the said Mr. Malik appreciated our legal concepts, our drafting and our knowledge and experience about application of law of torts to banking, industrial sickness, drt, counter-claim, securitisation act and calculations of damages.

Our Computer Cell for checking of Accounts has started functioning:- Our Accounts Cell headed by an ex-Bank auditor (experience 38 years) has started functioning. You get your entire account checked up and certified by him. Invariably in all cases, the accounts filed by the banks are defective and illegal and thus the very debt due for the purpose of DRT and Securitisation becomes questionable requiring rework and refiling, a difficult task for the banks and financial institutions. Please contact us for the details and charges through e-mail ramkishan@drtsolutions.com  

On account of great demand from our visitors, we have created this special page on sec. 138 NI Act dealing with dishonour of cheques. Summary of important judgments are given below. Details of the judgments may be found in standard legal digests

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.200, Evidence Act, 1872, S.3 - 138 NI Act - Preliminary evidence - Statement of a complainant is evidence - Any statement which Court permits or requires to be made before it by witnesses, whether such statement be tested by a cross examination or not, will certainly be evidence for the purpose of S.3 of Evidence Act. (Vasudevan Vs State of Kerala) 2005(1) (Kerala)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.200, 2(g) - 138 NI Act - Preliminary evidence - Proceedings before Magistrate u/s 200 Cr.P.C. is an inquiry u/s 2(g) of the Code. (Vasudevan Vs State of Kerala) 2005(1) (Kerala)

Negotiable Instruments Act, 1881, S.138 - 138 NI Act - Account closed - Offence will be committed only if account is closed after issuance of cheque and not when cheque is issued after closure of account. (Urban Co-op. Credit Society, Borsad Vs State of Gujarat & Anr.) 2004(1) (Gujarat)

Negotiable Instruments Act, 1881, S.138, Indian Penal Code, 1860, S.420 - 138 NI Act - Complaint barred by limitation - Magistrate cannot take cognizance of same by treating complaint as one under Indian Penal Code regarding offence of hearing where complaint does not make out case of offence under Indian Penal Code. (Srikanth P.Hutagee Vs Gangadhar S.Hutagekar) 2004(3) (Karnataka)

Negotiable Instruments Act, 1881, S.138, Proviso (a) - 138 NI Act - Presentation of cheque means cheque to be presented to the Bank on which the cheque is drawn. (Ajay Gupta Vs State of Maharashtra & Anr.) 2004(3) (Bombay)

Negotiable Instruments Act, 1881, S.138 Proviso (b) - “138 NI Act - Within thirty days” - Means information received from the bank where cheque is presented for collection and not from information sent by drawer's bank to payee's bank. (Ajay Gupta Vs State of Maharashtra & Anr.) 2004(3) (Bombay)

Negotiable Instruments Act, 1881, S.138 Proviso (b) - '138 NI Act - Receipt of information' means receipt of information from bank in writing - Oral information is not sufficient. (Immanuel Vs Rajappan) 2004(1) (Kerala)

Negotiable Instruments Act, 1881, S.138, 139 - 138 NI Act - Dissolution of Partnership Firm (Abdul Hameed Vs State of Rajasthan & Anr.) 2004(Rajasthan)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.385 & 386 - 138 NI Act - Dishonour of cheque - Conviction - Appeal against - Dismissal in absence of counsel for appellant - Held,  criminal appeal cannot be dismissed for want of prosecution simplicitor without examining the merits thereof. (Raghubhai Surabhai Bharwad Vs Satishkumar Ranchhoddas Patel & Anr.) 2004(2) (Gujarat)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.204 - 138 NI Act - Summoning order - Can be recalled if complaint on the very face of it does not disclose any offence against the accused. (M/s.Prakash Industries Ltd. Vs State & Ors.) 2004(1) (Delhi)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.254(2) - 138 NI Act - Request to send the cheque to  handwriting expert for examination - It is for the trial Court to alertly consider the acceptability of such request and ensure that the cheque is forwarded to the expert only if satisfactory reasons are available. (Francis Vs Pradeep) 2004(3) (Kerala)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.258 - 138 NI Act - Court can acquit accused in middle of trial before recording evidence if on bare reading of  complaint no offence is made out and yet the process is issued. (Urban Co-op. Credit Society, Borsad Vs State of Gujarat & Anr.) 2004(1) (Gujarat)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482 - 138 NI Act - Payment already made - Plea to be proved at the trial - Not a ground for quashing proceedings. (Sri Krishna Bhupathi Vs Chandana Constructions) 2004(2) Civil Court Cases 86 (Karnataka) : 2004(2) (Karnataka)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.357 - 138 NI Act - Fine of Rs.20,000/- imposed  - Order not valid - Magistrate cannot impose fine exceeding Rs.5,000/- besides imprisonment - High Court also cannot impose a sentence or fine exceeding the said limit - Magistrate can alleviate the grievance of the complainant and can award any amount as compensation. (P.Mazher Vs State of A.P. rep by Public Prosecutor) 2004(1) (A.P.)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.204, 482 - 138 NI Act - Defective statutory notice - Remedy lies by filing a petition u/s 482 of the Code. (Subramanium Sethuraman Vs State of Maharashtra & Anr.) 2004 (S.C.)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.320 - 138 NI Act - Conviction - In appeal parties compromised - Conviction and sentence set aside - Offence u/s 138 is compoundable under S.147 of Negotiable Instruments Act. (Anil Kumar Haritwal Vs Alka Gupta) 2004(2) (S.C.) : 2004(3) (S.C.)

Negotiable Instruments Act, 1881, S.138, 142 - 138 NI Act - Bank purchased cheque and made payment to the person who presented the cheque - Cheque dishonoured - Bank can prosecute the drawer (Cheruku Enterprises Vs State Bank of Hyderabad) 2003 (Andhra) 

Negotiable Instruments Act, 1881, S.138, Civil Procedure Code, 1908, S.47 - 138 NI Act - Complaint u/s 138 of NI Act as well as civil suit for recovery - Two proceedings are independent of each other (Smt.Gayathri Vs Smt.Clement Mary) 2003 (Karnataka) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - 138 NI Act - Non appearance of complainant - Dismissal for default - Magistrate has no inherent power to restore the complaint. (Ram Bhaj Jain Vs M/s Brar Rice and General Mills) 2003 (Punjab & Haryana) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.256, 378(5), 401(4) & 482 - 138 NI Act - Dismissal for default - when the case was not fixed for evidence of complainant, Magistrate could dispense with the appearance of complainant u/s 256 Cr.P.C. and adjourn the case. (Punjab State Civil Supplies Corporation Ltd. Vs Mangat Rai) 2002(P&H) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.256, 482 - 138 NI Act - Dismissal for default - Setting aside order - Charge framed - Magistrate could adjourn the case and could dispense with personal attendance of complainant - Efforts of Magistrate should be to dispose off case on merits instead of dismissing it in default - Held, under the circumstances Magistrate was wholly unjustified in dismissing the complaint for want of prosecution. (Sant Lal Bhatia Vs City Credit and Leasing Company) 2002(3) (P&H) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.357, 431 - 138 NI Act - Conviction of accused - Sentence of 15 days and compensation of Rs.1.52 lacs imposed out of which Rs.3000/- to go to State for loss suffered by State in terms of judicial time and resources spent for resolving the controversy between the parties - Held, order to pay compensation to State is not valid - No loss could to be said to have been suffered by State for resolving the controversy between the parties. (N.E.Varghese Vs State of Kerala) 2002(3) (Kerala)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.391 & 309(1) - 138 NI Act - Additional evidence at appellate stage - Petitioner failed to adduced defence evidence despite several opportunities - Application rejected. (A.Hasan Bava Vs P.V.Upadhya) 2004(3) (Karnataka)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.470 & 473 r/w Limitation Act, 1963, S.14 - 138 NI Act - Return of complaint by Court having no territorial jurisdiction to be presented before proper Court - Period from return of complaint to representation of complaint cannot be condoned as there is no provision either in Cr.P.C. or Limitation Act. (Rayala Sima Agro Enterprises & Ors. Vs Gujarat Agro Industries Corpn. Ltd.) 2002(3) (A.P.) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, Ss.62,64 & 65 - 138 NI Act - Case dismissed for non payment of registered postal charges - If service of summons is not fruitful then Court can issue bailable or non-bailable warrant of arrest - (M/s Nav Maharashtra Chakan Oil Mill Ltd. Vs M/s Shivashakti Poultry Farm) 2003(2) (Karnataka)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.204(2) - 138 NI Act - In absence of list of witnesses summons against accused will not be issued - Provision of S.204(2) is mandatory in nature commanding absolute compliance. (Fakirappa Vs Shiddalingappa & Anr.) 2002(1) (Kant.)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.219 - 138 NI Act - Complaint filed for more than three cheques - Court may separate the trial to be in conformity with the provisions of S.219 Cr.P.C. (Punjab Tyre House & Ors. Vs State of Gujarat) 2003(3) (Gujarat)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - 138 NI Act - Dismissal in default - results into acquittal of accused - Remedy is that of appeal and not revision. (Krisan Kumar Gupta Vs Mohammed Jaros) 2003(1)(Delhi)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - 138 NI Act - Non appearance of complainant - Option lies with the Magistrate either to dismiss the complaint or to adjourn the case for some reason if the Magistrate thinks it proper to adjourn the hearing. (Krisan Kumar Gupta Vs Mohammed Jaros) 2003(1) (Delhi) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - 138 NI Act - Complaint - Dismissal in default - For absence on one occasion, the complaint should not be dismissed in the interest of substantial justice. (Ampolu Apparao Vs Public Prosecutor) 2003(3) (A.P.) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - 138 NI Act - Non appearance of complainant - dismissed in default - Order of dismissal set aside - Presence of complainant was not required on that day - Magistrate could dispense with appearance of complainant under S.256 Cr.P.C. (Bhagwant Singh Vs M/s Suresh Steel Industries) 2003(1) (P&H) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.256 - Preliminary evidence recorded and summons issued - Complaint dismissed in default on subsequent date - It has the effect of acquittal - Complainant has remedy of appeal - Revision not maintainable. (H.P.Financial Corporation Vs M/s Continental Spinners Ltd.) 2003(3) (H.P.) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.300, Indian Penal Code, 1860, S.420 - 138 NI Act - Accused summoned in offence u/s 138 only - dismissed for want of prosecution - Amounts to acquittal - Second complaint u/s 420 IPC not maintainable even if no summoning order was issued u/s 420 IPC. (Lekh Raj Vs Pardeep Sharma) 2003(3) (P&H)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.357 - 138 NI Act - Conviction - Compensation - Magistrate has power to impose fine by way of compensation for payment to complainant - (R.D.Bharti Vs The Home Secretary, Union Territory of Chandigarh & Ors.) 2004(4) (P&H)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.357(2) - 138 NI Act - Sentence & fine - Appeal against - Appellate Court suspended fine on furnishing bank guarantee - Held, order for furnishing bank guarantee is not valid and the same set aside. (Urvi Dutta Nautiyal  Vs State of Uttaranchal) 2002(3) (Uttaranchal) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482 - 138 NI Act - Alteration in date of cheque to revalidate it - Whether it was with consent of drawer or not?

 is a question of fact which has to be established on evidence during trial - No ground for quashing the complaint. (Veera Exports Vs T.Kalavathy) 2002(1) (S.C.)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482 - 138 NI Act - Sufficiency of service of notice - Question is to be decided on basis of evidence led during trial and not at initial stage - Proceedings cannot be quashed on ground of insufficiency of service of notice, when question is yet to be decided by trial Court. (Fakirappa Vs Shiddalingappa & Anr.) 2002(1) (Kant.)

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482 - 138 NI Act - Complaint sought to be quashed on the ground that no notice was issued - Petitioner to lead evidence in the trial Court to prove this fact - Petition dismissed. (Malhotra Handlooms & Anr. Vs Hari Om Yarns (P) Ltd.) 2003(3) (P&H) 

Negotiable Instruments Act, 1881, S.138, Criminal Procedure Code, 1973, S.482 - 138 NI Act - proceedings not to be quashed at initial stage if uncontroverted allegations in complaint and evidence recorded at the preliminary stage of enquiry prima facie bring out the case within the ambit of S.138 of the Act. (Shakti Bhakoo Vs Varun Khemka) 2003(2) Civil Court Cases 358 (P&H) : 2003(2) (P&H) 

Negotiable Instruments Act, 1881, S.138, Indian Penal Code, 1860, Ss.420, 468, Criminal Procedure Code, 1973, S.256 - 138 NI Act - Death of complainant - Death does not ipso facto terminate the criminal proceedings more so when the son of complainant has stepped in and wanted to continue with the case. (Ajay Kumar Agarwal & Anr. Vs State of Jharkhand & Anr.) 2003(2) (Jharkhand) 

Negotiable Instruments Act, 1881, S.138 - 138 NI Act - 30 cheques - One notice issued - 10 complaints limiting three cheques per each complaint filed - Cheques issued under various invoices - Held, each transaction under each invoice being separate, issue of cheque in discharge of the debt under the said invoice constitute a separate offence - nothing illegal in having filed ten different complaints. (City Automobiles & Anr. Vs J.K.Industries Limited & Anr.) 2002(1) (A.P.)