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Dishonour of a cheque returned with the endorsement...

Dishonour of cheque after bank merger raises factual issues on insufficiency and validity; trial required, quashing denied

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Indian Laws February 14, 2026 Case Laws HC
Dishonour of a cheque returned with the endorsement "Insufficient Funds" attracts the statutory presumptions and shifts the onus to the drawer to rebut that insufficiency; where return reasons allege invalidity or presentation after validity period due to merger/acquisition of the drawee bank, court may examine compliance with the proviso to Section 138 and attendant facts before quashing. Blank signed cheque filled by payee still draws the presumption of genuineness. When return remarks show only insufficiency, factual adjudication at trial is required; accordingly the applications to quash the Section 138 complaints were dismissed.

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Acts Income Tax