#Negotiable Instruments Act

The Uttarakhand High Court ruled that the 20% deposit under Section 148 NI Act is a statutory floor that appellate courts cannot reduce, holding that a Sessions Judge's reduction to 10% and subsequent bail cancellation for non-compliance with the unlawful condition was impermissible. This safeguards appellants from arbitrary deposit reductions and ensures bail conditions adhere strictly to the statutory mandate.

The J&K High Court held that a single composite demand notice covering multiple dishonoured cheques satisfies Section 138 NI Act requirements, and that taking cognizance after the 15-day statutory payment window expires cures any premature filing defect. The ruling clarifies procedural compliance for cheque bounce complainants and limits technical grounds for quashing proceedings.

The court held that a guarantor's security cheque is not automatically exempt from Section 138 prosecution merely because it was given as collateral; the existence of an enforceable debt must be tested at trial. This clarifies that guarantors cannot escape cheque bounce proceedings at the threshold without a full evidentiary inquiry into the underlying liability.

The J&K High Court held that inherent powers under Section 528 BNSS cannot override the statutory bar on second revisions under Section 438(3), dismissing a petition challenging the denial of 19 defence witnesses in a Section 138 NI Act case where the defence was provable through sale deeds. The court also cited an unexplained 11-month delay in filing the revision.

The Gujarat High Court held that conditions for suspending sentence in Section 138 NI Act appeals cannot be imposed mechanically, quashing a Sessions Court order mandating 100% cheque amount deposit. The Court substituted this with a 20% deposit and an undertaking to attend hearings, aligning with Section 148 NI Act's framework. This ruling protects appellants from oppressive pre-conditions while ensuring the complainant's interim relief.

The Himachal Pradesh High Court upheld the acquittal under Section 138 of the NI Act, holding that a notice must specify the exact cheque amount to be valid. It further clarified that any alteration in the cheque initialled by the accused does not void the instrument, refining the evidentiary requirements for dishonoured cheque cases.

The Gujarat HC held that a Section 138 NI Act complainant is a victim with a right to appeal acquittal under the proviso to Section 372 CrPC, without needing leave under Section 378(4). Following the Supreme Court’s Celestium Financial ruling, this lets complainants challenge acquittals directly before the Sessions Court.

The Supreme Court held that a statutory demand notice delivered to the correct address raises a presumption of service under Section 138 of the Negotiable Instruments Act, and that receipt of such notice by a family member residing at the same address does not rebut that presumption. The ruling restores the conviction of the accused for cheque dishonour and clarifies service requirements for NI Act prosecutions.

The Delhi High Court held that counsel’s settlement statements bind the client, barring Equitas Small Finance Bank from reviving a dismissed NI Act complaint and upholding advocate-client ties and Lok Adalat finality.

The Calcutta High Court quashed NI Act proceedings against whole-time directors who were not signatories to the dishonoured cheques, ruling that vicarious liability under Section 141 requires specific averments linking the director to the transaction. The decision clarifies that a mere corporate role is insufficient to attract liability, affecting directors in cheque bounce disputes.

The Himachal Pradesh High Court set aside a cheque bounce conviction because the complaint was filed before the statutory 15-day notice period expired, ruling that a premature complaint is jurisdictionally defective and legally non-existent. The decision reinforces that strict compliance with Section 138's procedural timeline is a jurisdictional prerequisite, not a mere formality.

Uttarakhand HC held that the 20% fine-deposit under Section 148 NI Act may be lowered to Rs 10,000 for appellants facing extreme financial hardship. The reduced deposit is conditioned on the appeal being heard on its merits, creating discretionary relief for indigent defendants.

The Punjab & Haryana High Court ruled that when parties settle a Section 138 NI Act complaint, the related proclamation and FIR under Section 290 BNS must be dismissed, resulting in the FIR's quash. This prevents further criminal prosecution once the principal dispute is resolved, safeguarding litigants who reach settlement.

The Calcutta High Court set aside the criminal complaint, holding that without a specific allegation that a director was ‘in charge of and responsible for the company’s business’ at the time of the offence, Section 141 cannot be invoked. This narrows vicarious liability for directors in cheque-dishonour cases, limiting prosecution to those expressly shown to control the business.

Gujarat HC ruled that the complainant in a cheque-bounce matter is the victim and may file an appeal against an acquittal under the proviso to Section 372 CrPC, directing the case be transferred to the Sessions Court. This expands the victim’s procedural rights in NI Act prosecutions.