Section 138 NI Act: Cheque Not Valid If Amount Written Is Uncertain, Holds Delhi Court [Read Order]

A Delhi Court has recently held that an instrument cannot be termed as a cheque, if it does not specify a "certain amount" of money to be paid to a certain person. "There could have been no dispute about this instrument being a cheque within the definition of section 6 of the NI Act but for its failure to meet condition of certainty of the amount to be paid," the Court remarked. However, the Court held that this argument does not hold much water as "for a notice u/s 138 NI Act to fulfill the requirements of that section, the primary condition that has to be satisfied is that the dishonoured instrument was a valid negotiable instrument, which could be considered to be a cheque within the definition under section 6 of NI Act." The Court held, "In the present case, as instrument presented was not a cheque with the definition of section 6 of NI Act, a notice for subsequent dishonour of such instrument will not impose any liability upon the drawee either for non compliance or for non issuance of a fresh cheque." SC's verdict in Laxmi Dyechem case not applicable As mentioned above, the Respondent had relied on the judgment in Laxmi Dyechem where the Supreme Court had expanded the scope of the expression "amount of money…is insufficient" as appearing in Section 138 of the Act to include dishonour of cheques due to mismatch of signature.