Law of Dishonour of Cheques


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Since the publication of the Third Edition of this treatise the law in this arena has undergone radical changes. Last edition was published in the year 2004 when the concept of ‘electronic notices’ and ‘electronic cheques’ or ‘electronic payments’ was not in fashion. However, in the mean time, the law in this area has been developed in a manner that now the law is ‘computer friendly’. In this regard, the Legislature in its special endeavour has engrafted and put on statute book The Payment and Settlement Systems Act, 2007 making ‘dishonour of electronic payments’ also as an offence at par with ‘dishonour of cheques’ as under section 138 of the Act, besides pronouncement of some judgments by the Apex Court. Two chapters have been exclusively devoted to the law that revolves around ‘internet’ and ‘dishonour of cheques’. Since the publication of maiden edition, the law of dishonour of cheques has undergone metamorphosis in so far as territorial jurisdiction to file complaints under section 138 of the Act is concerned after pronouncement of larger Bench decision of the Apex Court in Dashrath Roopsingh Rathod case. The said decision invited lot of criticism in this regard. However, the Legislature in its bid also promulgated Amendment Ordinances to remedy the evil purportedly created by the said dictum. However, some experts are of the opinion that the said Ordinances have created even bigger evil than the one it sought to remedy! We have devoted a full chapter in this work making a thread-bare analysis of law and precedent in this regard. Some judgments, viz., Rangappa case, Laxmi Dychem Case, C. C. Alvi Haji Case, MSR Leathers etc., have also been pronounced in the mean-time by the Supreme Court that has succinctly laid down the basic theory of the subject afreash again and this development required necessary incorporation of the law in this treatise. For quick glance to such special dicta, reference may kindly be made to ‘Preface to the Fourth Edition”.

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