Priyanka Agarwal, B.B.A. LL.B., Chaudhary Charan Singh University
ABSTRACT
Negotiable Instruments like Promissory notes, Bills of Exchange, Cheques, etc. are used to help ease the business transactions. The Negotiable Instruments Act, 1881 covers these instruments and provides for rules and procedure for dealing with such instruments. The Act was enacted with the objective of legalizing the system for these instruments so that they could pass from one person to the other by way of negotiation just like any other goods.
According to Section 13 of The Negotiable Instruments Act, 1881 (hereinafter referred as ‘The Act’), negotiable instrument means, ‘a promissory note, bills of exchange or cheques payable either to order or to bearer’. A cheque is a negotiable instrument drawn on a specified banker and not expressed to be payable on demand. Payment through cheques is the most used method and post-date cheque are almost always used in daily business life. They in a sense provide for a certain accommodation to the drawer of the cheque.
With the increase in use of cheques as a way of payment, cases of dishonour of cheques also increased. Therefore, it becomes essential that whenever there is such abuse of process of law, the victim must be compensated satisfactorily. This is keeping in line with the principle of ‘ubi jus ibi remedium’, where there is a right there is a remedy and it is also helpful in bringing coherence in the society. Article 19(1)(g) of the Constitution of India, 1950 encompasses within itself, the fundamental right of the citizens to practice any profession or to carry on any occupation, trade or business; and whenever such freedom is tampered with, various laws and statutes come to its rescue. Hence, to prevent the drawer of the cheque from abusing the accommodation given to him, to restore the trustworthiness of cheques to be used in a commercial transaction and to protect faith of the creditor, Chapter XVII containing Section 138 to Section 142 was introduced in 1988.
Various Amendments and Judgments of the Hon’ble Supreme Court and other High Courts have it some more polishing through and structure. The changes are made as per the need of the society in order to ease the process of transaction through cheques.
These changes are important as they fill some unanswered questions as to Territorial Jurisdiction, or the Nature of the Offence, or when does the debt actually becomes enforceable, or is every offence compoundable, and many more.
In this project work, we will study the trend of various such aspects, their evolution through amendments and important judgments of the Courts.
Keywords: Section 138, The Act, Jurisdiction
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