[NI Act] If Interest Is Claimed On Cheque Which Doesn't Include Interest Component, It Does Not Remain Legally Enforceable Debt: Punjab & Haryana HC

The Punjab & Haryana High Court has made it clear that if interest is claimed on a cheque which does not include an interest component either by adjustments or by filling in the amount, the said cheque does not remain a legally enforceable debt or other liability under Section 138 of Negotiable Instrument Act.The Court quashed the complaint lodged under Section 138 NI Act,. The Punjab & Haryana High Court has made it clear that if interest is claimed on a cheque which does not include an interest component either by adjustments or by filling in the amount, the said cheque does not remain a legally enforceable debt or other liability under Section 138 of Negotiable Instrument Act. The Court said, "Given the statutory mandate of S. 82 of NI Act, before filing of the complaint in terms of S. 138 NIA, the moment the complainant receives the amount equal to the cheque amount, accepts it and admits receipt of the entire cheque amount, S. 82 switches on and triggers the discharge of the entire liability mentioned in such a cheque." A reading of Section 82 of the NI Act makes it crystal clear that given the statutory mandate, the moment the holder of the cheque accepts and admits the receipt of the entire cheque amount, the Negotiable Instruments Act, 1881 stops applying because the dishonour of a cheque is punishable under S. 138 of NI Act only on the existence of a legally enforceable debt or liability, the Court said.