The cheque should have been drawn by

the drawer on an account maintained by

him. The cheque should have been
returned or dishonoured because of
insufficient funds in the drawer's account.
The cheque is issued towards discharge
of a debt or legal liability..

1. Meter and Instruments Private

Limited v. Kanchan Mehta
Sc laid down and iterated the principles
and guidelines that are usually followed
in cases pertaining to Section 138 of the
Negotiable Instruments Act, 1881.The
object of introducing Section 138 and
other such provisions, is to enhance the acceptability of cheques in the settlement of liabilities. The offence
punishable under Section 138 of the Act of 1881 is primarily related to a civil wrong and the Amendment [The
Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002] of 2002 specifically made it
compoundable.

2. Bhaskaran Nair v. Abdul Kareem [2006 (4) KLT 48]

The Kerala High Court held that the defence that a signed blank cheque was handed over by an account
holder is intrinsically suspicious one and must be appreciated with great care and caution. No account holder
is expected to deal with a cheque in such a casual, careless, irresponsible and indifferent manner and such a
defence is impossible.

3. Moideen v. Johny [2006 (3) KLT SN 62]

The Kerala High Court held that by issuing a signed blank cheque the drawer conveys an implied authority to
fill up the cheque and present the same for encashment.

4. Lillykutty v. Lawrance [2003 (3) KLT 721]

The Kerala High Court held that the mere fact that the payee’s name and amount shown are not in the hand
writing of the drawer does not invalidate the cheque. No law provides that body of the cheque has to be
written by drawer only in his own handwriting. What is material is the signature of the drawer only and not the
body of the instrument.

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5. I.C.D.S. Ltd. v. Beena Shabeer [2002 (3) KLT 218 (SC)]

The Apex Court held that a cheque given as security for the liability of the accused or for the liability of any
person would also fall under the mischief of offence punishable under Section 138 of the N.I. Act.

6. Kaushalya Devi Massand v. Roopkishore [AIR 2011 SC 2566]

The Supreme Court held that the offence under Section 138 of the N.I. Act is almost in the nature of civil
wrong which has been given criminal overtone, and imposition of fine payable as compensation is sufficient
to meet the ends of justice.

7. M/S. Mandvi Co-Op Bank Ltd vs Nimesh B.Thakore on 11 January, 2010

Apex court took notice of the fact that cases under section 138 of the Act have been coming in such great
multitude that even the introduction of such radical measures to make the trial procedure simplified and
speedy has been of little help and cases of dishonoured cheques continue to pile up giving rise to an
unbearable burden on the criminal court system.

8. Pawan Kumar Ralli vs. Maninder Singh Narula [(2014) 15 SCC 245]
The High Court was not right in quashing the complaint merely on the ground that complaint is barred by
limitation, that too a plea which was taken for the first time before the High Court. On the other hand, the
High Court ought to have remanded the matter to the Trial Court for deciding the issue of limitation.

9. Vijayan v. Baby [2011(4) KLT 355]

The Supreme Court held that the direction to pay the compensation by way of restitution in regard to the loss
on account of the dishonor of the cheque should be practical and realistic. So, in a prosecution under Section
138 of the N.I. Act, the compensatory aspect of remedy should be given much priority over punitive aspect.

10. Smt.P. Vijaya Laxmi vs Smt. S.P. Sravana And Another on 27 October, 2017
As regards the remedy of appeal available to complainants against orders of acquittal in cases pertaining to
any other offense, it may be noted that the right of appeal given to victims under the proviso to Section 372 of
the Code is a general remedy provided to all such victims.