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        Case ID :

        2026 (7) TMI 989 - HC - Indian Laws

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        Cheque dishonour prosecution requires timely presentation and valid service of an accurate demand notice; defective compliance sustains acquittal. Proceedings for cheque dishonour require presentation within the cheque's validity period, presentation of a post-dated cheque only on or after its date, ...
                        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.

                            Cheque dishonour prosecution requires timely presentation and valid service of an accurate demand notice; defective compliance sustains acquittal.

                            Proceedings for cheque dishonour require presentation within the cheque's validity period, presentation of a post-dated cheque only on or after its date, and valid service of an accurate demand notice. A cheque presented after expiry of validity or before its stated date cannot support prosecution. Where the demand notice aggregated amounts from such invalidly presented cheques with other cheques and was returned marked "not known" without further efforts to serve it, the statutory requirements for prosecution under the Negotiable Instruments Act were not fulfilled. The article notes that the appellate acquittal was therefore sustainable.




                            Issues: Whether the appellate acquittal for the alleged offence of dishonour of cheques was sustainable where one cheque was presented after expiry of its validity, another was presented before its date, and the demand notice claimed the aggregate amount of all seven cheques without valid service.

                            Analysis: A cheque presented after its validity period cannot found proceedings for dishonour, and a post-dated cheque presented before its date cannot support such proceedings. The demand notice included amounts under both the expired and prematurely presented cheques along with the remaining cheques. Further, the notice was returned with the endorsement "not known", which was not valid service; no further steps were taken to effect service. A demand notice in a penal proceeding must accurately and validly demand the dishonoured cheque amount.

                            Conclusion: The acquittal was sustainable; the requirements for prosecution under Section 138 of the Negotiable Instruments Act were not fulfilled.


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                            ActsIncome Tax
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