Enlargement of Scope & Changed Judicial Contours of Section 138 NI Act Before SC's Ruling in M/s Laxmi Dyechem v. State of Gujarat

Prolegomenon to the Financial Transactions in Cheques: The law apropos negotiable instruments is the law of the commercial world legislated to facilitate the activities & transactions in trade and commerce and further, to bolster the efficacy of banking operations as well as to foster remittances through cheques to discharge debt obligations & liabilities eventually, not only inspiring confidence in creditors or payees but also dispelling their apprehensions qua the cheque being dishonoured upon presentment at drawer's bank on account of insufficiency of funds standing to the credit of drawer's account or the amount on the cheque being in excess of the amount arranged to be paid from the account by an agreement made with the bank. Hence, it may be indubitably averred that the offence of dishonor of cheques can best be described as a regulatory offence that has been encapsulated on the statute books so as to sub-serve the public interest in ensuring the credibility of negotiable instruments along with providing adequate safeguards for accused to issue a cheque de novo to discharge his obligations within 15 days from the receipt of the statutory notice of demand given by the payee or holder in due course, failing which the complainant is accrued with a cause of action to lodge a complaint under Section 138 of the NI Act as well also to discredit the presumption drawn by the court under Section 139 against him in the trial by adducing cogent evidence. Therefore, it would be fallacious to employ a strict construction of Section 138, especially giving due regard to the object of the Negotiable Instruments Laws Act 1988 as also, the deeming fiction created in the aforesaid section, which is generally employed by the drafters of a statute to give it an expansive meaning as warranted by the exigencies of the facts and circumstances of a case accords leeway to circumscribe not only those contingencies inscribed in Section 138 upon which a cheque would be dishonored but also such indorsements returned unpaid by the bank that may not otherwise amount to dishonor, unless coupled with an oblique motive to protract payments so that such may lapse upon presentment to the bank and of course, the deficiency of funds to the credit of the drawer's account to honor the cheque. Henceforth, as a sequitur to the foregoing disquisition on case laws, it may indubitably be adumbrated that there has been an enlargement of umbrage of Section 138, posterior to the SC's pronouncement in Laxmi Dyechem which now stands not only confined to the contingencies engrafted in Section 138 but perhaps also encompasses the exigencies, of cheque being returned unpaid by the bank bearing indorsements 'account closed', 'payment stopped by drawer', 'mismatch of signatures' or like pedantic grounds, that may augment the predicaments of the complainant/payee who are induced to present a cheque at the bank for payment of his debt obligations or liability, upon a belief that there would be sufficient funds standing to the credit of the drawer to honor the cheque, it is thus, due to this solemn belief/faith or promise that legislature sought to stifle the mischief of the dishonesty on the part of the drawers of cheques of despite being apprised of deficiency of funds in their bank accounts and yet issuing a cheque, by incorporating penal as well as strict liability of such defaulters under Section 138. Furthermore, upon harmoniously construing Sections 138 & 139 it would indefatigably lead credence to an inference that the rights of complainant as well as the accused are vindicated in an even manner by the Negotiable Instruments laws Act, 1988, whereby on one hand it has interpolated Section 138 in the NI Act to bring dishonest drawers to strict liability as well as penal consequences so that it may deter such drawers to be highly diligent while issuing cheques in lieu of existing legally enforceable debt or liability, despite apprised of paucity of funds to honor the same, and in the same vein also appended a proviso with Section 138 which accentuates adequate safeguards for honest drawers who may be falsely implicated under Section 138 on account of dishonor of cheque for reasons other than arising out of dishonest intentions to establish their bona fides by virtue of the said proviso, which envisages a mandatory service of notice by the payee/complainant upon the drawer within 30 days of receiving information of dishonor of cheque from the bank, thereby according an opportunity to a bonafide drawer to honor his commitment as well as discharge his liability by issuing a cheque de novo within 15 days of receipt of such notice served by the payee/complainant, only upon failing which the penal ramifications under Section 138 may ensue upon him.