Cheque bouncing

I take he liberty of posting the following for the benefit of lawyer friends. It is a Delhi High Court judgement.

20. The Court held that Section 3(2) related to the transaction “and,

therefore, Special Court was competent to decide”. In the present case, we

are not concerned with the provisions of any such enactment. Here is a

complaint under Section 138 of the Negotiable Instrument Act filed before

an ordinary Criminal Court/Magistrate. Therefore, the governing section

would be Section 138 of the Negotiable Instrument Act which deals with

“offence” and not “transaction” . It is held in number of cases that the cause

of action for filing of the complaint arise only after the notice of dishonour

of the cheque is given and payment is not made within 15 days of the receipt

of the said notice. Therefore, date on which cheques were handed over

would have no bearing and it is only when the cheque is presented for

payment and is dishonoured and even after notice of dishonour is given and

payment is not made by the drawer of the cheque within 15 days of the

receipt of this notice, cause of action for filing of complaint would arise. In

the instant case when the cheque was presented and the notice of dishonour was given the company had already been wound up.