Dishonour of Cheques in India: A Guide along with Model Drafts of Notices and Complaint

Negotiable instruments were devised by the mercantile community as a safe and very dependable method of discharging pecuniary liabilities and as a substitute for cash payment, which would always involve an element of simple risk due to either the magnitude of the amount sought to be paid, or, the geographical distance between the payer and the payee. Such instruments could also be cleverly and conveniently used by several persons to discharge their financial liabilities. However, a smooth working of the system of negotiable instruments primarily depended on the honestly and integrity of the parties thereto. A practice, it is said, has already crept into the several metropolitan markets in Indian to give cheques merely as a divide to stall for the time being the undesirable contingency of being prevented upon to make the payment on the spot, thus substantially eroding the credibility of cheques as trustworthy substitute for cash payment. A cheque that is dishonoured may cause incalculable loss, injury or inconvenience to the payee of endorsee thereof, in view of the fat that due to latter's unexpected disappointment; he has also to lick the dust while meeting his own future commitments to the persons.
Negotiable Instruments Act 1881 (said act for short), is a special law. The provisions contained in Chapter XVII, of the said act make certain deviation relatable to the mode of method of preferring the complaint, the forum before which, the complaint has to be made, the period, within which the compliant has to be preferred from the time of accrual of cause of action for the commission of an offence under section 138 of the said act, etc. The dishonour of a cheque by the drawer shall constitute an offence and the offender is liable to punished under section 138 of the N.I act, which can extend upto two years in prison, or with fine which may extend to twice the amount of cheque, or with both.
The Negotiable Instruments Act 1881, is a fairly complex and a technical act, which requires its thorough study, for litigating a case governed by it effectively. The draftsman of a complaint under the said act, has to especially take care and see that all the necessary requirements for filing a complaint under the said act are properly met, for otherwise the complaint runs the risk of being defeated on technical grounds. This book is an earnest attempt to understand the technicalities and intricacies of the said act, thereby making the draftsman of the cheque dishonour complaint aware and abreast of the things that he or she has to take care of, while drafting or litigating a case under the said Act.

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