Barar's Digest on Dishonour of Cheques

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1. Introduction to Cheque Dishonour Laws

• Definition and Nature of a Cheque
• Essentials of a Valid Cheque
• Difference Between a Cheque, Bill of Exchange, and Promissory Note
• Importance of Cheques in Business Transactions

2. Legal Framework on Dishonour of Cheques

• Negotiable Instruments Act, 1881 – Overview
• Sections 138-147 – Provisions Related to Dishonour of Cheques
• Amendments to the Act – Including the Negotiable Instruments (Amendment) Act, 2018
• Relationship Between Negotiable Instruments Act and Other Laws (e.g., IPC, CrPC, Banking Regulations)

3. Dishonour of Cheques (Section 138 of NI Act)

• Meaning of Dishonour
• Reasons for Cheque Dishonour (Insufficient Funds, Signature Mismatch, etc.)
• Legal Consequences of Cheque Dishonour
• Conditions for Applicability of Section 138
  • Presentation of Cheque Within Validity Period
  • Dishonour Due to Insufficiency of Funds or Other Reasons
  • Issuance of Demand Notice Within 30 Days
  • Failure to Make Payment Within 15 Days

4. Legal Presumption and Burden of Proof (Section 139 of NI Act)

• Presumption in Favor of Holder
• Rebuttal of Presumption by Accused
• Role of Evidence in Rebutting Presumption

5. Notice of Demand (Section 138 and Section 146 of NI Act)

• Essentials of a Valid Demand Notice
• Time Limits for Sending Notice
• Modes of Service (Registered Post, Email, Courier, etc.)
• Consequences of Non-Compliance with Notice Requirements

6. Procedure for Filing a Complaint

• Jurisdiction of Courts in Cheque Dishonour Cases
• Who Can File a Complaint?
• Limitation Period for Filing Complaint
• Format and Sample Complaint for Dishonour of Cheque
• Court Fees and Other Procedural Aspects

7. Defenses Available to Drawer (Accused)

• Post-Dated Cheques and Security Cheques
• Fraudulent or Forged Cheques
• Material Alteration in the Cheque
• Absence of Legal Liability or Consideration
• Stolen or Lost Cheques

8. Trial Procedure in Cheque Dishonour Cases

• Stages of Trial
  • Filing of Complaint
  • Summoning the Accused
  • Recording of Evidence
  • Arguments and Judgment
• Compounding of Offense Under Section 147
• Appeals and Revision

9. Punishment and Penalties for Dishonour of Cheques

• Criminal Liability – Imprisonment up to 2 Years or Fine Up to Double the Cheque Amount
• Civil Liability – Recovery of Amount Through Civil Suit
• Attachment of Property for Non-Payment
• Compensation to the Payee

10. Role of Banks in Cheque Dishonour Cases

• Bank’s Duty to Honor Cheques
• When Can Banks Refuse to Honor a Cheque?
• Reporting Dishonoured Cheques to Credit Bureaus
• RBI Guidelines on Dishonour of Cheques

11. Landmark Supreme Court and High Court Judgments

• Important Cases Interpreting Section 138
• Cases on Jurisdiction, Limitation, and Presumption of Cheque Dishonour
• Recent Trends in Judicial Interpretation

12. Comparative Analysis with International Laws

• Dishonour of Cheques in the USA, UK, Canada, and Other Countries
• Comparative Study of Punishments and Remedies

13. Recent Amendments and Legal Trends

• Negotiable Instruments (Amendment) Act, 2018 – Introduction of Interim Compensation
• Digital Transactions and Dishonour of E-Cheques
• Impact of FinTech and Online Banking on Cheque Transactions

14. Practical Guidelines and Model Drafts

• Sample Legal Notice for Cheque Dishonour
• Sample Complaint Format Under Section 138
• Draft of Compromise Agreement for Settlement
• Checklist for Filing a Successful Cheque Dishonour Case