DASHRATHBHAI TRIKAMBHAI PATEL versus HITESH MAHENDRABHAI PATEL & ANR

DASHRATHBHAI TRIKAMBHAI PATEL versus HITESH MAHENDRABHAI PATEL & ANR

A cheque dishonoured will attract Section 138 only if, at the date of maturity/presentation, it represents a legally enforceable debt; part or full payments made by the drawer between drawing and presentation reduce the legally enforceable debt and must be endorsed on the cheque under Section 56 to permit negotiation of the balance, and absent such enforceable debt at presentation the drawer is not guilty under Section 138. On the facts, part-payments reduced the legally enforceable debt below the cheque amount and the accused was rightly acquitted.

Parties
Appellant: Dashrathbhai Trikambhai Patel; First Respondent: Hitesh Mahendrabhai Patel
Jurisdiction
India
Judgment Date
11 October 2022
Procedural Posture
Criminal Appeal / Appeal to the Supreme Court Against Judgment of the High Court of Gujarat Dated 12 January 2022
Legal Topics
Section 138 NI Act, Post Dated Cheques, Endorsement Under Section 56, Statutory Notice Under Section 138
Negotiable Instruments Act, 1881 Criminal Law Section 138 NI Act Post Dated Cheques Endorsement Under Section 56 Statutory Notice Under Section 138

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Parties

Dashrathbhai Trikambhai Patel

Appellant

Hitesh Mahendrabhai Patel

First Respondent

Procedural Posture

Criminal Appeal / Appeal to the Supreme Court Against Judgment of the High Court of Gujarat Dated 12 January 2022

Legal Issues

  1. 1 Whether an offence under Section 138 NI Act is made out when the cheque dishonoured does not represent a legally enforceable debt at the time of encashment
  2. 2 Whether part-payments made after a cheque is drawn but before presentation affect the applicability of Section 138
  3. 3 Whether part-payments must be endorsed on the cheque under Section 56 to permit prosecution under Section 138

Ratio Decidendi

A cheque dishonoured will attract Section 138 only if, at the date of maturity/presentation, it represents a legally enforceable debt; part or full payments made by the drawer between drawing and presentation reduce the legally enforceable debt and must be endorsed on the cheque under Section 56 to permit negotiation of the balance, and absent such enforceable debt at presentation the drawer is not guilty under Section 138. On the facts, part-payments reduced the legally enforceable debt below the cheque amount and the accused was rightly acquitted.