Landmark Case Laws

K. Bhaskaran vs. Sankaran Vaidhyan Balan (1999) Key Takeaway: This case clarified the territorial jurisdiction for filing a complaint under Section 138. The Supreme Court held that a complaint can be filed at any of the following places:

• Where the cheque was drawn.

• Where the cheque was presented for encashment.

• Where the cheque was dishonored.

• Where the notice was sent.

• Where the notice was received.

1. Dalmia Cement (Bharat) Ltd. vs. Galaxy Traders & Agencies Ltd. (2001) Key Takeaway: This case emphasized that the dishonor of a cheque due to ‘stop payment’ instructions issued by the drawer still falls under the purview of Section 138, provided it can be shown that the instructions were given to defeat the legitimate rights of the payee.

   
   

2. M.S. Narayana Menon vs. State of Kerala (2006) Key Takeaway: The Supreme Court clarified the presumption of liability under Section 139, stating that once the issuance of the cheque and its dishonor is proved, it is presumed that the cheque was issued for the discharge of debt or liability. However, the accused can rebut this presumption by bringing in sufficient evidence to the contrary.

   
   

3. C.C. Alavi Haji vs. Palapetty Muhammed & Anr (2007) Key Takeaway: The Supreme Court ruled that a person who claims that he did not receive the notice required under Section 138 cannot avoid prosecution if he fails to pay the cheque amount within 15 days of receipt of a summons from the court. The court noted that the drawer can make the payment before the complaint is filed to avoid prosecution.

   
   

4. Dashrath Rupsingh Rathod vs. State of Maharashtra (2014) Key Takeaway: This case revisited the issue of territorial jurisdiction and overruled the decision in K. Bhaskaran. The Supreme Court held that the offence under Section 138 is committed only when the cheque is dishonored, and thus, the complaint should be filed at the place where the cheque was dishonored.

   
   

5. Vinita S. Rao vs. M/s. Essen Corporate Services Pvt. Ltd. (2014) Key Takeaway: The Supreme Court held that the payee or holder in due course must prove that the cheque was issued in discharge of a legally enforceable debt or liability. This case underscored the importance of the complainant’s responsibility to establish the existence of debt or liability.

   
   

6. Kumar Exports vs. Sharma Carpets (2009) Key Takeaway: This case elaborated on the rebuttal of the presumption under Section 139. The Supreme Court stated that while the initial burden lies on the complainant to prove that the cheque was issued in discharge of a debt, the accused can rebut the presumption by demonstrating that the cheque was not issued for a legally enforceable debt or liability.

   
   

7. Triyambak S. Hegde vs. Sripad (2021) Key Takeaway: The Supreme Court emphasized the summary trial process for cheque bounce cases to ensure swift resolution. The court also stated that delay tactics by the accused should not be entertained to ensure timely justice.

   
   

Conclusion

These landmark judgments have played a crucial role in interpreting and refining the provisions of Section 138, ensuring that the law serves its purpose of deterring cheque dishonor while balancing the rights and obligations of both parties involved in the transaction. Understanding these cases can provide valuable insights into the practical application of Section 138 in various scenarios.