THE NEGOTIABLE INSTRUMENT ACT.

1881

S. 138. Dishonour of cheque for insufficiency, etc. of funds in the account.-

Where any cheque drawn by a person in an account maintained by him with a
banker for payment of any amount of money to another person from out of that
account for the discharge. In whole or in part, of any debt or liability is returned
by the bank unpaid, either because of 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 the bank, such
person shall be deemed to have committed an offence and shall, without
prejudice to any other provision of this act, be punished with imprisonment for
[a term which may be extended to two years], or with fine which may extend to
twice the amount of the cheque, or with both: Provided that nothing contained in
this section shall apply
unless -
a) the cheque has been presented to the bank with in a period of six months
from the date on which it is drawn or within the period of its validity,
whichever is earlier;
b) the payee or the holder in due course of the cheque, as the case may be,
makes a demand for the payment of the said amount of money by giving a
notice; in writing, to the drawer of the cheque, [ within thirty days ] of the
receipt of information by him from the bank regarding the return of the
cheque as unpaid; and
c) the drawer of such cheque fails to make the payment of the said amount of
money to the payee or as the case maybe, to the holder in due course of the
cheque within fifteen days of the receipt of the said notice.

Explanation - For the purpose of this section, “debt of other liability"

means a legally enforceable debt or other liability.

S- 139. Presumption in favour of holder

It shall be presumed, unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in section 138, for the discharge, in
whole or in part, of any debt or other liability

S. 143 (A) (1) Notwithstanding anything contained in the code of Criminal

Procedure, 1973, the court trying an offence under Sec. 138 may order the
drawer of the cheque to pay interim compensation to the complainant
a) in a summary trial or a summons case, where he pleads not guilt to the
accusations made in the complaint; and
b) in any other case, upon framing of charge.

(2) The interim compensation under sub - section (1) shall not
exceed twenty per cent of the amount of the cheque.
(3) The interim compensation shall be paid within sixty days from the date of
the order under sub-section (1), or within such further period not exceeding
thirty days as may be directed by the court on sufficient cause being shown by
the drawer of the cheque.

(4)If the drawer of the cheque is acquitted, the court shall direct the
complainant to repay to the drawer the amount of interim compensation,
with interest at the bank rate as published by the Reserve Bank o India,
prevalent at the beginning of the relevant financial year, within sixty days
from the date of the order, on within such further period not exceeding thirty
days as may be directed by the Court on sufficient cause being shown by the
complainant.

(5) The interim compensation payable under this section may be recovered as
if it were a fine under section 421 of the code of criminal
Procedure, 1973.
(6) The amount of fine imposed U/S 138 or the amount of compensation
awarded U/s 357 of Code of Criminal Procedure, 1973, shall be reduced
by the amount paid or recovered as interim compensation under this
section."