Dishonour of Cheque
Introduction
Advent of cheques in the market have given a new dimension to the
commercial and corporate world, its time when people have
preferred to carry and execute a small piece of paper called Cheque
than carrying the currency worth the value of cheque. Dealings in
cheques are vital and important not only for banking purposes but
also for the commerce and industry and the economy of the country.
But pursuant to the rise in dealings with cheques also rises the
practice of giving cheques without any intention of honoring them.
Before 1988 there being no effective legal provision to restrain
people from issuing cheques without having sufficient funds in their
account or any stringent provision ot punish them in the vent of such
cheque not being honoured by their bankers and returned unpaid. Of
course on dishonour of cheques there is a civil liability accrued.
However in reality the processes to seek civil justice becomes
notoriously dilatory and recover by way of a civil suit takes an
inordinately long time. To ensure promptitude and remedy against
defaulters and to ensure credibility of the holders of the negotiable
instrument a criminal remedy of penalty was inserted in Negotiable
Instruments Act, 1881 in form of the Banking, Public Financial
Institutions and Negotiable Instruments Laws (Amendment) Act,
1988! which were further modified by the Negotiable Instruments
(Amendment and Miscellaneous Provisions) Act, 2002
Of the ten sections comprising the chapter of the Act, section 138
creates statutory offence in the matter of dishonour of cheques on
the ground of insufficiency of funds in the account maintained by a
person with the banker. Section 138 of the Act can be said to be
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