Reported Judgments on Section 138, Negotiable Instruments Act, 1881

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Supreme Court Insights

Landmark Judgments That Shape Cheque Bounce Law

General summaries of some reported judgments on Section 138 of the Negotiable Instruments Act, provided for information only. These are brief, simplified notes, may not reflect the full ratio of each decision, and must not be relied upon as legal advice or as a statement of the current law. Readers should consult the authentic reports and take independent legal advice.

Supreme Court of India

Once a Cheque Is Signed, the Drawer Cannot Escape Liability

P Rasiya v. Abdul Nazer & Anr • 12 Aug 2022 • 2022 LawSuit(SC) 1026

The Supreme Court held that once a cheque bearing the signature of the drawer is issued, the drawer cannot escape liability under Section 138 NI Act merely by claiming the cheque was stolen, misused, or issued without intent. The statutory presumption under Section 139 operates in full force.

Supreme Court of India

Stop Payment Instruction Proves Accused Had Knowledge of the Cheque

T Vasanthakumar v. Vijayakumari • 28 Apr 2015 • 2015 LawSuit(SC) 402

The Supreme Court ruled that when an accused issues a "stop payment" instruction to the bank, it constitutes evidence that the accused was aware of the cheque and its presentation.

Supreme Court of India

Non-Compliance with Section 141: Acquittal of Company Directors

Siby Thomas v. M/s Somany Ceramics Ltd • 10 Oct 2023 • 2023 LawSuit(SC) 1006

The Court held that for a complaint against a company under Section 138, strict compliance with Section 141 is mandatory. The complaint must specifically allege that the accused person was in charge of and responsible for the conduct of the business.

Supreme Court of India

Public Notice of Retirement Necessary to Escape Section 141 Liability

Riya Bawri v. Mark Alexander Davidson & Ors • 23 Aug 2023 • 2023 LawSuit(SC) 822

A partner who retires from a firm cannot escape liability under Section 141 merely by claiming retirement. Public notice of retirement must be given.

Supreme Court of India

Frozen Bank Account — Conviction Upheld Despite Insufficient Funds Defence

Harpal Singh v. State of Haryana & Anr • 04 Dec 2023 • 2023 LawSuit(SC) 1179

The Supreme Court held that when a cheque bounces because the bank account is frozen, the offence under Section 138 is still made out. A frozen account is no defence.

Supreme Court of India

Complaint Quashed When Complainant Suppressed Reply to Demand Notice

Rekha Sharad Ushir v. Saptashrungi Mahila Nagari Sahkari Patsansta Ltd • 26 Mar 2025 • 2025 LawSuit(SC) 419

In a 2025 decision, the Supreme Court quashed a Section 138 complaint where the complainant had deliberately suppressed the accused's reply to the demand notice.

Supreme Court of India

Cheque Not Issued from Accused's Account — Appeal Allowed

Ganga Prasad Ratnakar v. Fanindra Kumar Chandra • 11 Jul 2023 • 2023 LawSuit(SC) 759

The Supreme Court acquitted the accused where the cheque was not issued from the accused's own bank account and was not signed by the accused.

Supreme Court of India

Production of Account Books Not Necessary for Complainant

D K Chandel v. M/s Wockhardt Ltd & Anr • 20 Jan 2020 • 2020 LawSuit(SC) 154

The complainant in a Section 138 case is not required to produce account books or detailed financial records to prove the underlying debt.

Supreme Court of India

Complainant Entitled to Benefit of Every Reasonable Doubt

Uttam Ram v. Devinder Singh Hudan & Anr • 17 Oct 2019 • 2019 LawSuit(SC) 1766

The complainant is entitled to the benefit of the statutory presumption and every reasonable doubt must be resolved in favour of the cheque holder.

Supreme Court of India

"Security Cheques" — No Blanket Immunity Under Section 138

Sripati Singh v. State of Jharkhand & Anr • 2021

A cheque issued as "security" is not immune to Section 138. If the underlying loan or debt is not repaid, the "security" becomes an enforceable debt.

Supreme Court of India

Speeding Up Trial with Section 143A — Interim Compensation Is a Right

Rajesh Soni v. Mukesh Verma • 2021

Under Section 143A a court may, in its discretion, direct interim compensation of up to 20% of the cheque amount during the trial; the power is discretionary, not automatic.

Citations on this page are provided for reference and should be verified against the authentic reports before being relied upon in any matter.