Judicial Evolution of Section 138 Jurisprudence

The Supreme Court of India has played a pivotal role in shaping the interpretation and application of Section 138 of the Negotiable Instruments Act through numerous landmark judgments. These decisions have clarified ambiguities, filled legislative gaps, and established principles that guide courts across the country. Understanding these judgments is essential for anyone involved in cheque bounce litigation.

Key Landmark Judgments

Dashrath Rupsingh Rathod v. State of Maharashtra (2014): This landmark judgment held that the complaint under Section 138 must be filed at the place where the cheque was dishonoured (returned by the bank), not where the cheque was issued or presented. This was later modified by the 2015 Amendment which allowed filing at the place where the cheque was delivered for collection through an account or where the payee maintains the account.

Meters and Instruments Pvt. Ltd. v. Kanchan Mehta (2018): The Supreme Court laid down guidelines for expeditious disposal of Section 138 cases, including the use of technology, recording of evidence on affidavit, and imposition of exemplary costs for adjournments. The Court emphasized that summary trials should be the norm in these cases.

Bir Singh v. Mukesh Kumar (2019): This judgment established that it is not necessary for the complainant to prove the consideration for which the cheque was issued, as Section 118(a) of the NI Act raises a presumption that every negotiable instrument was made for consideration. The burden shifts to the accused to prove otherwise.

Surinder Singh Deswal v. Virender Gandhi (2019): The Supreme Court upheld the constitutional validity of Section 143A (interim compensation) and clarified that the power to grant interim compensation is discretionary but should be exercised keeping in mind the legislative intent of providing timely relief to complainants.

Laxmi Dyechem v. State of Gujarat (2012): This judgment clarified the scope of Section 141 regarding the liability of directors, holding that a specific averment is required in the complaint that the director was in charge of and responsible for the conduct of the business of the company.

Practical Takeaways

These judgments collectively establish that Section 138 carries a strong presumption in favour of the complainant, that technical defenses (while available) are viewed strictly, that courts should dispose of cases expeditiously, and that the provision serves a dual purpose of punishment and compensation. Business owners and legal practitioners must stay updated with evolving jurisprudence to effectively manage cheque bounce disputes.