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        Case ID :

        2003 (3) TMI 771 - HC - Indian Laws

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        Section 138 liability survives partial cheque repayment when the drawer cannot prove full discharge within the statutory time. Part-payment of a cheque liability before presentation does not, by itself, defeat prosecution under Section 138 of the Negotiable Instruments Act where ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                          Section 138 liability survives partial cheque repayment when the drawer cannot prove full discharge within the statutory time.

                          Part-payment of a cheque liability before presentation does not, by itself, defeat prosecution under Section 138 of the Negotiable Instruments Act where the cheque was issued towards a legally enforceable debt and the balance remained unpaid. The court construed the phrase "the said amount of money" purposively to mean the cheque amount after deducting proved prior payments, but held that criminal liability is avoided only if the drawer establishes full discharge of the amount due within the statutory time. On the facts, only partial payments were proved and the acquittal was found unsustainable, so conviction was held to be justified.




                          Issues: Whether a cheque issued towards a legally enforceable liability remains actionable under Section 138 of the Negotiable Instruments Act when part-payments are made before presentation, and whether such part-payments by themselves discharge the drawer from criminal liability.

                          Analysis: The cheque was issued for discharge of a legally enforceable debt. The accused established only partial payments through acknowledged receipts, while the larger alleged repayments were not satisfactorily proved. A drawer seeking to avoid liability under Section 138 must show that the entire amount due under the cheque stood discharged within the statutory time. The expression "the said amount of money" in the proviso was construed purposively to refer to the cheque amount reduced by any proved prior payments, but such partial discharge does not by itself wipe out liability where the balance remains unpaid. On that basis, the ingredients of the offence were held to be satisfied and the acquittal was found unsustainable.

                          Conclusion: Partial payment before presentation did not absolve the accused of liability under Section 138, and the conviction was held to be justified.

                          Ratio Decidendi: For an offence under Section 138 of the Negotiable Instruments Act, proved part-payment of the cheque liability before presentation does not by itself defeat prosecution unless the drawer establishes payment of the entire amount due within the statutory period.


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                          ActsIncome Tax
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