#Section 138 NI Act

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 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.

A cheque dishonoured due to an account block after a partner's death lacks the 'insufficiency of funds' needed under Section 138 NI Act, so the Karnataka HC quashed proceedings, meaning blocks attract no criminal liability for partners and firms.

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.

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.

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.

The Bombay High Court ruled that the interim moratorium under Section 96 of the IBC applies only to corporate debtors and does not halt criminal proceedings under Section 138 of the NI Act against company directors. This limits the moratorium’s protective reach, leaving directors exposed to prosecution during insolvency.

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.

Bombay HC sets aside appellate court's order dismissing a Section 138 NI Act appeal as time-barred, restoring the appeal and clarifying the computation of limitation for cheque dishonour appeals. The ruling ensures procedural fairness in NI Act appeals by preventing unjust dismissal on technical grounds.

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.

Kerala High Court set aside an acquittal in a Section 138 NI Act case for failing to draw statutory presumptions under Sections 118 and 139. The ruling clarifies the burden of proof and twin presumptions in cheque dishonour disputes, impacting complainants in similar cases.

Rajasthan High Court rules that imposing a 20% fine deposit as a precondition for suspending sentence under Section 138 NI Act is unjustified without recorded reasons. The decision reinforces judicial discretion in bail matters, impacting accused facing financial penalties in cheque bounce cases.