#Section 138

The Allahabad High Court ruled that a Section 138 complaint filed before the 15-day notice period expires is a nullity, quashing the summoning order. Following Yogendra Pratap Singh, the court held the complainant may file a fresh complaint within two months with condonation of delay, balancing procedural rigour with the right to prosecute.

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 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.

An FIR is not maintainable for a Section 138 NI Act offence; a complaint under Section 142A is required to take cognizance. This bars police from initiating cheque bounce proceedings without a complaint, affecting complainants and the accused.

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.

Patna High Court quashed a Section 138 complaint because the firm that issued the cheque was not listed as an accused, emphasizing that corporate vicarious liability cannot be imposed without prosecuting the entity itself. This clarifies that Section 482’s inherent powers can be invoked only when the corporate party is properly charged, affecting future cheque-dishonour prosecutions.

Chhattisgarh HC ruled that an unauthorised company secretary cannot testify in a Section 138 case and a complaint filed via power of attorney is void if the authorised representative fails to appear. The judgment stresses that firms must secure proper corporate authorisation before filing cheque-bounce suits, affecting companies and their legal officers.

The Punjab & Haryana HC quashed a Section 138 complaint against a non-signatory to the cheque, affirming that only the drawer can be prosecuted. The complainant conceded the accused was not a signatory, resulting in the summoning order being set aside qua the petitioner.

The Gujarat High Court ruled that a co-owner of a joint account cannot be charged under Section 138 NI Act unless their signature appears on the cheque, limiting liability to the actual drawer. This safeguards joint account holders from criminal prosecution for cheques they did not sign.

Gujarat HC ruled that the Section 138 NI Act’s presumption of debt does not create personal liability for a trustee unless the debt is proven enforceable against him. Claims against a trust must be pursued against the trust itself, shielding trustees from direct prosecution.

The Delhi High Court lifted a stay on a Section 138 complaint, ruling that the Insolvency and Bankruptcy Code’s moratorium does not extinguish criminal liability for cheque bounce. This ensures borrowers cannot evade prosecution by invoking insolvency protection, affecting all parties in pending IBC cases.

The Delhi High Court ruled that a director’s resignation is a disputed factual question that must be examined during trial, not through interlocutory revision. Resignation alone cannot shield a director from Section 138 NI Act prosecution.

Bombay HC grants leave to appeal against acquittal in a Section 138 NI Act case, ruling that the accused's defence of a tripartite agreement lacked sufficient proof. The judgment underscores the accused's burden to substantiate such defences beyond mere assertion.