What is the main objective of section 138 of Negotiable Instrument Act?

The objective of sec 138 of NI Act is To promote the efficiency of banking operations and to ensure credibility in transacting business through cheques is mentioned in the case law Modi Cements Ltd.

What is Section 138 NI Act?

Section 138 of the NI Act is a penal provision that deals with the punishment of dishonour of cheque. Dishonour of cheque is not an offence in itself but to become an offence, the following ingredients should be there: The cheque returned by the bank unpaid on account of insufficient funds.

What are the conditions that must be fulfilled in order to initiate proceeding under s 138 of the Negotiable Instruments Act, 1881?

The ingredients required for complying with Section 138 are as follows:

• a person must have drawn a cheque for payment of money to another for the discharge of any debt or other liability;
• that cheque has been presented to the bank within a period of three months;

What are the provisions of section 138 of Negotiable Instrument Act regarding bouncing of cheque give example?

Section 138 in The Negotiable Instruments Act, 1881. (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Is Section 138 a bailable offence?

The offence under Section 138 of the Negotiable Instruments Act is a bailable one, since the same is punishable with imprisonment for a maximum period of two years.

Is Section 138 A criminal offence?

Section 138 NI Act A ‘Civil Sheep’ In A ‘Criminal Wolf’s Clothing’; Quasi-Criminal In Nature : Supreme Court. The Supreme Court has observed that criminal proceedings for the dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881, are “quasi-criminal” in nature.

How can I get bail in section 138?

Section 138 of Negotiable Instruments Act, 1881 provides that where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank …

Is 138 NI Act bailable?

Can I get bail in cheque bounce case?

Bail in cheque bounce is a matter of right of the accused as it’s a bailable offence. So you have to give an bail application through your advocate and have to give security as per the orders of the judicial magistrate.

What is the time limit for cheque bounce case?

As per Negotiable Instruments Act, legal notice must be sent within 30 days from the date of cheque bounce. Thereafter within 15+30=45 days from the date of sending the legal notice, case must be filed. In case the case is filed beyound that time then the same shall be time barred.

What is the new rule of cheque bounce?

With the new rule change, cheques can be cleared on a Sunday or a holiday too. The customers must keep in mind that they need to keep a minimum balance in their bank account at all times. If they fail to do so, the cheque may bounce and they will have to pay a fine or penalty.

How many times cheque can bounce?

If the cheque gets bounce at least once than you can send a notice. you are not required to bounce the cheque mutliple times. For filing case under section 138 Negotiable Instruments Act, your only option is filing a complaint in Court.

What are proceedings under Section 138 of Negotiable Instruments Act?

INTRODUCTION That proceedings under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as NI Act) have a special character. They arise from a civil dispute which is related to dishonouring of a cheque but may result in a criminal consequence.

What does section 138 of the NI Act mean?

If the drawer is an individual, the proceedings would happen under Section 138 of the NI Act.

Are there any changes in the NI Act?

The government should refrain from making any such change in NI Act which blows the trust/sanctity of cheques, the banking sector, the businesses and the common man who treat the cheques as a guaranteed payment.

Why was the Negotiable Instruments Act of 1881 created?

It is pertinent that Negotiable Instruments Act, 1881 provides for an early mode for redressal where a cheque, for discharge of debt or liability, is dishonored due to paucity of funds or where it exceeds arrangement.