Court: The Supreme Court of India
Case no.: Criminal Appeal No. 1497 of 2022
Case Title: Dashrathbhai Trikambhai Patel VS Hitesh Mahendrabhai Patel & Anr
Date of decision: 11, October 2022
Bench: Division bench (Justices DY Chandrachud and Hima Kohli)
In this article, we are going to deal with the case analysis of the important and latest Supreme Court Judgement pronounced in the area of Negotiable Instruments, that too in relation to matters involving no offence for the dishonour of cheques under Section 138 of the Negotiable Instruments Act, 1881.
In the important Judgement titled Dashrathbhai Trikambhai Patel VS Hitesh Mahendrabhai Patel & Anr pronounced on 11th October 2022, the Supreme Court has held that no offence for the dishonour of cheque under Section 138 of the Negotiable Instruments Act is made out if the cheque is presented for the full amount without endorsing the part payment made by the borrower after the issuance of the cheque.
Dashrathbhai Trikambhai Patel VS Hitesh Mahendrabhai Patel & Anr
1. Facts of the case
The accused had taken a loan of Rs. 20 lakhs and to repay the same he had issued a cheque of Rs. 20 lakhs to the complainant, when the complainant went to deposit it in the bank, in the meanwhile the accused paid him about 4 lakhs(part payment) but the complainant did not endorse on the cheque that the payment of four lakhs has been made and the cheque has been dishonoured.
The Lower Court acquitted the accused. The same was challenged before the High Court Gujarat. The High Court approved the acquittal. The Judgement of the High Court was challenged before the Hon’ble Supreme Court.
2. Observation
While disposing of this case, the hon’ble Supreme Court held that if the part payment has been made under Section 138 and it is not endorsed while presenting the cheque, then the amount written on the cheque will not be considered as “legally enforceable debt” under section 138.
The Court said that under section 56, there is a provision that if any part payment has been made then it must be endorsed on the cheque. If a such endorsement is made, the cheque can be presented for the balance amount.
3. Summary of Findings
The Hon’ble supreme court has summarised its findings into three points:
- It has to be shown that the amount written on the cheque is legally enforceable debt.
- If the drawer has written the amount on the cheque and after that, the complainant presents it for encashment then if before that if the drawer has made any part payment or full payment, then when that cheque is presented then, the amount written on the cheque will not be legally enforceable.
- When part payment or full payment has been done, that payment must be endorsed on the cheque under section 56 and after that the amount remained by reducing part payment, if that also happens to be dishonoured, then it will become an offence under section 138.
4. Decision
The Hon’ble Supreme Court affirmed the Judgement of the Gujarat High Court and upheld it.
Dashrathbhai Trikambhai Patel VS Hitesh Mahendrabhai Patel & Anr PDF Download
To read the Supreme Court Judgement, Click here.
Like This Post? Checkout More
