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Common Defences Under Section 138 — The Legal Position

The notes below summarise, for general information only, how some recurring defences in cheque-dishonour matters are treated under settled law. They do not describe any particular case, party or outcome, are not legal advice, and do not represent that any similar result will follow in any matter.

Delay as a Defence

The question whether delay by the drawer in paying, or the mere passage of time, weakens a complaint that is itself filed within the statutory periods.

Principle: Delay by the drawer does not cure dishonour or defeat a timely complaint.
The statutory timeline binds the complainant — not the drawer's delay in paying.

The "Security Cheque" Argument

The question whether a cheque described as having been given only as "security" is, for that reason, outside Section 138.

Principle: A "security" label gives no immunity where an enforceable debt exists.
Following Sripati Singh v. State of Jharkhand (2021), an unpaid security cheque is enforceable.

The "Stolen Cheque" Claim

The question whether a bare assertion that the cheque was stolen or misused, unsupported by proof, displaces the presumption under Section 139.

Principle: A bare denial, without affirmative proof, does not rebut the Section 139 presumption.
The presumption under Section 139 operates until displaced by cogent evidence.

The Post-Dated Cheque

A common question is whether a cheque bearing a future date can attract Section 138 at all.

Principle: A post-dated cheque is a valid instrument; Section 138 is attracted once it is presented on or after its date and is dishonoured.
The liability under a post-dated cheque crystallises when it becomes payable and is returned unpaid.

Signature Admitted

Where the drawer admits that the signature on the cheque is genuine, the effect on the burden of proof is often misunderstood.

Principle: Once execution (signature) is admitted or proved, the presumption under Sections 118 and 139 arises, and the burden shifts to the accused to raise a probable defence.
The presumption is rebuttable, but the accused must do more than merely deny liability.

The Blank or Incomplete Cheque

A drawer sometimes argues that the cheque was handed over blank or only partly filled in.

Principle: Under Section 20, a person who signs and delivers an incomplete instrument authorises the holder to complete it; that fact alone is not a defence.
Voluntary delivery of a signed cheque carries consequences, whatever blanks it may have contained.
30 Days
To issue the statutory notice from receipt of the return memo
15 Days
For the drawer to pay after the notice is received
S. 139
Statutory presumption in favour of the holder (rebuttable)
S. 143A
Interim compensation — discretionary, up to 20%

Disclaimer: The notes above are general and simplified, for educational purposes only. They do not constitute legal advice, do not refer to any identifiable party or matter, and are not a representation or guarantee of any particular outcome. Every matter turns on its own facts.

Adv. Suryanarayan M. Nadar Advocate · Negotiable Instruments Act, Section 138 · Malad West, Mumbai.
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