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Jasvinder   29 April 2025

Positive pay for cheque

Sir a person gave me cheque of rs 10 lakh for goods purchase and I deposited it for encashment in my bank but it was returned with the memo" Advise not Received"

When i asked the bank they told the customer failed to initiate positive pay for cheque so it is returned.

Sir will this act comes in purview of 138 n. I Act. Any case law. Thanks 



 2 Replies

T. Kalaiselvan, Advocate (Advocate)     29 April 2025

"Advice not received" typically indicates that the bank hasn't received instructions to pay the cheque, possibly due to errors in communication or delays. This is not a situation of insufficient funds, which is the key requirement for attracting Section 138. 

Therefore a cheque bounce under Section 138 of the Negotiable Instruments Act (NI Act) generally does not attract the provision if the reason for bounce is "advice not received".

P. Venu (Advocate)     29 April 2025

The provsions of Section 138 NI Act could be invoked when the cheque is returned unpaid either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank. 

In my understanding, return of the cheque unpaid because "Advice is not received' falls in the latter situation i.e  that it exceeds the amount arranged to be paid from that account by an agreement made with that bank.

As such, in my considered view, you can initiate action under NI 138 by issuing Notice as provided under proviso (b).


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