Prosecution for Dishonour of Cheque – A Critical Analysis

Abstract

The backlog of dishonor of check cases in India is examined in this study, with a focus on Section 143(3) of the Negotiable Instruments Act of 1881 addresses complaints pertaining to incidents of check dishonor. They must be resolved within sixty days of the petition being filed, per Section 138. They rarely become finalized before three or four years, though, and this has an impact on new investments, business ease, etc. To learn how courts handling Section 138 can imitate the goals and operations of an effective exchange system, the market transaction system is used. Almost every transaction, including repaying loans, salary payments, bill payments, fee payments, etc., uses checks. Every day, banks process and clear the great majority of checks. The determination of checks is to provide evidence of payment. However, despite the current digital migration, checks continue to be a dependable form of settlement for many people. Despite having a swelling demand for digital transactions, cheques are considered as the most reliable method of payment and the default and dishonor is increasing on a greater scale. It has thus become crucial to know the practical challenges and the matters relating to cheque and the related legal provisions. This paper deals in detail with the dishonour of cheque, reasons, essential ingredients, dishonour of cheques by companies, presumptions, cognizance of the offence, jurisdiction, limitation and punishment for dishonour of cheque.