Landmark Cases on Section 138 — Dashrath Rupsingh, Indian Bank Association, etc.

The Section 138 jurisprudence has been built case by case, sometimes by Constitution Benches and sometimes by two-judge division benches, with Parliament intervening twice — in 2015 and 2018 — to overrule, codify, or supplement the case-law. This chapter is a synthesis chapter rather than a doctrinal one. It maps the leading authorities in capsule form, two or three lines on facts, the holding, and the present status. Each capsule cross-links to the chapter where the doctrine is drilled in full. Aspirants should treat this chapter as a navigation map for revision: read it after the substantive chapters and use it to refresh the doctrinal arc the night before the paper. The doctrines treated here run across the Negotiable Instruments Act cluster, anchored to Section 138 and the procedural sections that ride alongside it.

The capsules are grouped by the issue they decide, not by chronological order. A doctrinal map is more useful than a chronological one for revision purposes. The groups are: jurisdiction, presumption and rebuttal, cause of action and successive presentations, sentencing and compensation, compounding, the 2015 and 2018 amendments, post-dated cheques and stop-payment, and procedural directions for trial conduct. The group headings double as exam-answer headings; aspirants who organise their thinking along these lines will find that any Section 138 fact-pattern resolves into one or two of the capsules below.

Jurisdiction — Dashrath Rupsingh and the 2015 override

Dashrath Rupsingh Rathod v. State of Maharashtra (2014) 9 SCC 129. Facts. The accused had drawn a cheque on a bank in one State; the payee deposited it for collection in his bank in another State; the cheque was returned unpaid. The complaint was filed at the place of presentation. Holding. A three-judge bench held that jurisdiction lay only at the place where the cheque was dishonoured by the drawer's bank — that is, the situs of the offence. The wide reading in K. Bhaskaran (1999) 7 SCC 510, which had allowed jurisdiction at any of five places connected to the offence, was substantially narrowed. Present status. Overruled by Parliament. The Negotiable Instruments (Amendment) Act, 2015 inserted Section 142(2), which restored jurisdiction to the place where the payee or holder maintains the account in which the cheque was deposited for collection. The position is now governed by the statute, not by Dashrath Rupsingh. The doctrine is drilled in the Sections 139 to 142 chapter.

Bridgestone India Pvt. Ltd. v. Inderpal Singh (2016) 2 SCC 75. Facts. The 2015 amendment had come into force during the pendency of cheque cases that had been filed under the old (pre-amendment) jurisdictional regime. The question was whether the new jurisdictional rule would apply to pending cases. Holding. The 2015 amendment is procedural and applies retrospectively. Pending cases must be transferred to the court having jurisdiction under Section 142(2) as inserted by the 2015 amendment. Present status. Followed. The decision settled the practical disposition of thousands of cheque cases that had been moved between courts after Dashrath Rupsingh.

Smt. Shamshad Begum v. B. Mohammed (2008) 13 SCALE 669. Facts. The pre-2015 regime; the question was whether multiple courts with connections to different acts in the cheque-dishonour cycle could simultaneously have jurisdiction. Holding. Following K. Bhaskaran, any of the five courts where the five constituent acts — drawing, presentation, return, notice, and failure to pay — were committed had jurisdiction. Present status. Limited application after Dashrath Rupsingh and the 2015 amendment, but instructive on the pre-2015 doctrinal position.

Presumption and rebuttal — Rangappa

Rangappa v. Sri Mohan (2010) 11 SCC 441. Facts. The accused contended that the cheque had been issued for security purposes only, and not for a legally enforceable debt. He led no direct evidence to rebut the Section 139 presumption. Holding. The Section 139 presumption extends not only to the drawing of the cheque but also to the existence of a legally enforceable debt or other liability; the presumption is rebuttable on the standard of preponderance of probabilities, not beyond reasonable doubt; and the accused may rebut it by relying on circumstantial evidence and the inherent probabilities of the case. Present status. The leading authority on rebuttal. Repeatedly affirmed. Drilled in the chapter on presumptions, cognizance and jurisdiction.

Kumar Exports v. Sharma Carpets (2009) 2 SCC 513. Facts. The accused contended that the cheque had not been issued in discharge of an enforceable debt. Holding. The presumption under Section 139 is a presumption of law, but it is rebuttable; the accused has to raise a probable defence, and the standard for rebuttal is preponderance of probabilities. Present status. Reaffirmed by Rangappa and remains good law on the structure of the rebuttal.

Bharat Barrel and Drum Mfg. Co. v. Amin Chand Pyarelal (1999) 3 SCC 35. Facts. The Section 118(a) presumption of consideration was the issue, in the context of a promissory note rather than a cheque, but the doctrinal logic carried across. Holding. The presumption of consideration under Section 118(a) is a presumption of law and shifts the burden to the defendant to displace; the standard for displacement is preponderance of probabilities. Present status. Foundational on the consideration presumption; extended into Section 138 cases through Rangappa.

Cause of action and successive presentations — MSR Leathers and Harihara Krishnan

MSR Leathers v. S. Palaniappan (2013) 1 SCC 177. Facts. The cheque was presented twice; on the first dishonour the payee did not issue a statutory notice; on the second dishonour the payee did issue a notice and filed the complaint within the statutory period running from the second notice. The drawer contended that, on the first dishonour, the cause of action had crystallised and could not be revived. Holding. A three-judge bench overruled Sadanandan Bhadran v. Madhavan Sunil Kumar (1998) 6 SCC 514 and held that the payee may present the cheque any number of times within its validity, and that on each presentation followed by a fresh notice within thirty days and a fresh fifteen-day failure-to-pay window, a fresh cause of action accrues; what the payee cannot do is issue more than one notice on the same dishonour. Present status. Settled law. Drilled in the three-clocks chapter on notice and limitation.

N. Harihara Krishnan v. J. Thomas (2018) 13 SCC 663. Facts. A complaint was filed in the name of a partnership firm; the cause-of-action analysis turned on when the offence was complete. Holding. The cause of action under Section 138 accrues only on the day immediately following the expiry of fifteen days from the receipt of the statutory notice by the drawer; until that day no offence has been committed; the one-month complaint clock under Section 142(b) starts running from that day. Present status. The current authority on cause-of-action accrual. The composite computation it endorses is now standard.

K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510. Facts. The case raised the question of when the cause of action accrued and which court had jurisdiction. Holding. The offence is complete on the concatenation of five acts: drawing, presentation, return, notice, and failure to pay; jurisdiction lay at any of the five places where the acts occurred. Present status. The five-act framework continues to be the structural map of the offence, though the jurisdictional limb was overruled by Dashrath Rupsingh and then reversed by the 2015 amendment.

Sentencing and compensation — Suganthi Suresh Kumar and R. Vijayan

Suganthi Suresh Kumar v. Jagdeeshan (2002) 2 SCC 420. Facts. The cheque amount was four lakh fifty thousand rupees. The magistrate convicted the accused but imposed only imprisonment till rising of the court and a fine of five thousand rupees. Holding. The sentence was a fleabite sentence that defeated the legislative purpose of Section 138; magistrates must make liberal use of Section 357(3) CrPC to compensate the complainant; no drawer should be allowed to take dishonour lightly. Present status. The foundational authority on the sentencing pattern in cheque cases. The case was remitted for fresh sentencing.

R. Vijayan v. Baby (2012) 1 SCC 260. Facts. The Supreme Court took up the standard practice of awarding compensation under Section 357(3) and the appropriate quantum. Holding. Compensation should ordinarily be the cheque amount with reasonable interest from the date of the cheque, or twice the cheque amount as a benchmark; departures must be reasoned. Present status. The leading authority on compensation quantum. The case was the foundation of the compensation-quantum framework now applied across cheque cases.

Compounding — Damodar Prabhu, K.M. Ibrahim and J.I.K. Industries

Damodar S. Prabhu v. Sayed Babalal H. (2010) 5 SCC 663. Facts. The Supreme Court was confronted with a docket pattern in which accused persons were stalling settlement until the appellate stage, treating the graduated court hierarchy as a set of bargaining venues. Holding. Compounding under Section 147 is freely available, but courts should apply a graded-cost framework: no costs at the first or second hearing, ten per cent of the cheque amount at the trial-court stage thereafter, fifteen per cent before sessions or revision, twenty per cent before the High Court, and twenty-five per cent before the Supreme Court, payable to the Legal Services Authority. Present status. The working manual on compounding costs. The graded-cost framework remains the working manual for compounding NI Act cases at every level.

K.M. Ibrahim v. K.P. Mohammed (2010) 1 SCC 798. Facts. A composition was tendered before the Supreme Court at the appellate stage, after conviction. Holding. The non-obstante clause of Section 147 NI Act overrides the Section 320 CrPC scheme on the question of stage; compounding is permissible at any stage including post-conviction in revision and appeal. Present status. Settled law. The temporal openness of Section 147 is now conventional.

J.I.K. Industries Ltd. v. Amarlal V. Jumani (2012) 3 SCC 255. Facts. A composition was tendered by some, but not all, of the co-accused. Holding. Section 147 confers an individual right to compound; the case may proceed to compounding for the consenting accused while continuing for the others. Present status. Settled law. The departure from the Section 320 CrPC unanimity requirement is now established.

The 2015 amendment — jurisdiction restored

The Negotiable Instruments (Amendment) Act, 2015 inserted Section 142(2), restoring jurisdiction to the place where the payee or holder maintains the account in which the cheque was deposited for collection. The amendment was Parliament's response to Dashrath Rupsingh. The post-amendment position is therefore that jurisdiction follows the payee's banker, not the drawer's banker. Bridgestone India v. Inderpal Singh (above) settled the retrospective application of the amendment to pending cases. The doctrinal arc on jurisdiction now runs from K. Bhaskaran (broad jurisdiction) through Dashrath Rupsingh (narrow jurisdiction) to the 2015 amendment (statutory restoration of broad jurisdiction).

The 2018 amendment — interim compensation and appellate deposit

The Negotiable Instruments (Amendment) Act, 2018 inserted Sections 143A and 148. Section 143A authorises the magistrate to direct interim compensation up to twenty per cent of the cheque amount during the pendency of the trial; Section 148 directs the appellate court to require the convicted appellant to deposit at least twenty per cent of the fine or compensation before the appeal is entertained. The 2018 amendment was a legislative response to the persistence of the cheque-bounce docket and the need for some restitution to the complainant during the long delay of trial and appeal.

G.J. Raja v. Tejraj Surana (2019) 19 SCC 469. Facts. The accused contended that Section 143A could not be invoked because the offence was committed before 1 September 2018, the date the amendment came into force. Holding. Section 143A is prospective only; it cannot be applied to offences committed before its commencement. The reasoning was that Section 143A creates a substantive obligation on the accused which did not exist before the amendment, and substantive provisions are presumed to be prospective. Present status. Settled law. The reasoning is now standard for every Section 143A retrospectivity argument.

Surinder Singh Deswal v. Virender Gandhi (2019) 11 SCC 341. Facts. The corresponding question for Section 148: did the appellate-deposit requirement apply to offences committed before the 2018 amendment came into force? Holding. Section 148 applies retrospectively; it is procedural and does not create a new substantive obligation; the appellate court may direct the deposit even for pre-amendment offences. Present status. Settled law. The asymmetry — Section 143A prospective, Section 148 retrospective — turns on the substantive-versus-procedural distinction.

Procedural directions — Indian Bank Association and Mandvi Co-operative Bank

Indian Bank Association v. Union of India (2014) 5 SCC 590. Facts. The Supreme Court took up the chronic delays in cheque-bounce cases on its own motion and laid down a working manual. Holding. Five directions: (i) magistrates shall scrutinise complaints and issue summons by speed post on the same day; (ii) Section 200 verification is treated as discharged by the Section 145 affidavit; (iii) trials shall ordinarily be summary and convertibility to summons trial must be reasoned; (iv) affidavit evidence may be read at trial subject to the right to cross-examine; (v) trials shall be concluded within six months of cognizance. Present status. The working manual every magistrate now follows. Drilled in the service-of-summons and affidavit-evidence chapter.

Mandvi Co-operative Bank Ltd. v. Nimesh B. Thakore (2010) 3 SCC 83. Facts. The question was whether the accused could also lead defence evidence on affidavit under Section 145, and whether the magistrate could refuse cross-examination. Holding. Section 145 is mandatory on the complainant who wants the benefit of fast-track procedure; the witnesses called by the complainant may also lead chief on affidavit; the accused has no parallel right to lead defence evidence on affidavit; cross-examination on the affidavit is an absolute right and the magistrate has no discretion to refuse. Present status. Settled law on the asymmetric design of Section 145.

Post-dated cheques and stop-payment doctrine

Anil Kumar Sawhney v. Gulshan Rai (1993) 4 SCC 424. Facts. Whether a post-dated cheque, before the date it bears, is a cheque or merely a bill of exchange. Holding. A post-dated cheque becomes a cheque only on the date it bears; before that date, it is a bill of exchange. The six-month limitation clock under proviso (a) to Section 138 starts from the date the cheque bears, not from the date of issue. Present status. The structural authority on the timeline of post-dated cheques.

Goaplast (P) Ltd. v. Chico Ursula D'Souza (2003) 3 SCC 232. Facts. The drawer of a post-dated cheque had instructed his bank to stop payment before the date the cheque bore. Holding. Section 138 is attracted even where stop-payment instructions are issued before the post-dated cheque becomes due; the contrary view would render the section a dead letter; the drawer cannot defeat Section 138 by issuing a pre-emptive stop-payment instruction. Present status. Settled law. The post-dated cheque is fully within Section 138 once it has been dishonoured for stop-payment.

Electronics Trade & Technology Development Corporation v. Indian Technologists & Engineers (Electronics) (P) Ltd. (1996) 2 SCC 739. Facts. The drawer instructed his bank to stop payment after issuing the cheque; the question was whether the consequent dishonour fell within Section 138. Holding. Stop-payment dishonour is within Section 138; the section is not confined to insufficiency of funds. The decision is the early authority on the stop-payment doctrine. Present status. Substantially affirmed by the later case-law on stop-payment, with the narrow exception in para 6 of Electronics Trade (relating to pre-presentation notice to the payee) having been overruled in subsequent cases. The stop-payment doctrine is drilled in the bouncing of cheques chapter.

Service of notice — the Section 27 line

C.C. Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555. Facts. The statutory notice under proviso (b) was returned with the endorsement that the addressee was out of station; the question was whether service was deemed to have been effected. Holding. A three-judge bench held that, where the notice has been correctly addressed and posted by registered post, Section 27 of the General Clauses Act, 1897 raises a rebuttable presumption of service; postal endorsements such as “refused”, “unclaimed”, “house locked”, and “addressee not in station” are equivalent to service for this presumption; the drawer may rebut at trial by showing he had no knowledge of the notice. Present status. The leading authority on deemed service of the proviso (b) notice. The decision sets the working line on deemed service.

D. Vinod Shivappa v. Nanda Belliappa (2006) 6 SCC 456. Facts. The proviso (b) notice was returned undelivered; the question was the effect on the cause of action. Holding. The cause of action accrues on the expiry of the fifteen-day window from the deemed receipt of the notice; the drawer who deliberately avoids service cannot defeat the prosecution; refusal and avoidance are equivalent for the purpose of triggering the cause of action. Present status. Followed and refined in C.C. Alavi Haji.

Companies and directors — Section 141 line

S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89. Facts. A complaint was filed against the company and its directors under Section 141; the directors were not described as being in charge of the day-to-day affairs of the company. Holding. A three-judge bench held that a complaint under Section 141 must specifically aver that the director was, at the time of the offence, in charge of and responsible for the conduct of the business of the company; mere directorship is not enough. Present status. The leading authority on Section 141 vicarious liability.

K.K. Ahuja v. V.K. Vora (2009) 10 SCC 48. Facts. The application of S.M.S. Pharmaceuticals to managing directors and signatories. Holding. Managing directors and signatories of cheques are deemed to be in charge of and responsible for the affairs of the company; specific averments are not strictly necessary for them; for other directors the S.M.S. Pharmaceuticals averment requirement applies in full. Present status. Refines S.M.S. Pharmaceuticals; both are routinely cited together.

How to use the capsules in an answer

An exam answer in a Section 138 question rarely needs more than three or four of the capsules. The trick is to pick the right ones for the issue. A jurisdictional question is answered by K. Bhaskaran, Dashrath Rupsingh, and the 2015 amendment, with Bridgestone India for retrospectivity. A presumption-rebuttal question is answered by Rangappa, with Kumar Exports for the structural logic and Bharat Barrel for the consideration-presumption foundation. A successive-presentation question is answered by MSR Leathers, with Sadanandan Bhadran noted as overruled. A cause-of-action question is answered by N. Harihara Krishnan and K. Bhaskaran. A sentencing question is answered by Suganthi Suresh Kumar and R. Vijayan, with the Section 357(3) compensation framework. A compounding question is answered by Damodar Prabhu, K.M. Ibrahim, and J.I.K. Industries. A 2018-amendment question is answered by G.J. Raja and Surinder Singh Deswal. A procedural-trial-conduct question is answered by Indian Bank Association and Mandvi Co-operative Bank. A stop-payment or post-dated-cheque question is answered by Goaplast, Anil Kumar Sawhney, and Electronics Trade & Technology. A Section 141 director-liability question is answered by S.M.S. Pharmaceuticals and K.K. Ahuja.

Each capsule's holding has been compressed to its operative core; the doctrinal explanation lives in the linked chapter. Aspirants should treat the capsule as a one-line trigger to a longer answer rather than as the answer itself. The chapters in the NI Act series drill the doctrines in full.

Closing — the doctrinal arc

The Section 138 jurisprudence has now reached a settled state. Jurisdiction is governed by the 2015 statute; the presumption-and-rebuttal framework is governed by Rangappa; the cause-of-action timeline is governed by Harihara Krishnan and K. Bhaskaran; sentencing is governed by Suganthi and R. Vijayan; compounding is governed by Damodar Prabhu; the procedural manual is governed by Indian Bank Association; the 2018 amendment is governed by G.J. Raja and Surinder Singh Deswal. Each of the eight is a settled doctrinal port. Future case-law will likely refine within these ports rather than displace them. For the next examination cycle, this map of sixteen capsules covers the entire judicial output that an aspirant needs to know. Read it alongside the substantive chapters in the summary-trial cluster and the doctrinal arc will be intact.

Frequently asked questions

Is Dashrath Rupsingh Rathod still good law on jurisdiction?

No. The Three-Judge Bench in Dashrath Rupsingh Rathod v. State of Maharashtra (2014) 9 SCC 129 held that jurisdiction lay only at the place where the cheque was dishonoured by the drawer's bank. Parliament responded with the Negotiable Instruments (Amendment) Act, 2015, inserting Section 142(2), which restored jurisdiction to the place where the payee or holder maintains the account in which the cheque was deposited for collection. The amendment is retrospective, applying to pending cases (Bridgestone India v. Inderpal Singh, 2016).

What is the standard of rebuttal under Section 139 after Rangappa?

The presumption under Section 139 extends to the existence of a legally enforceable debt or other liability, and the standard for rebuttal is preponderance of probabilities, not beyond reasonable doubt. The accused may rely on circumstantial evidence and the inherent probabilities of the case. He need not lead direct evidence to displace the presumption. Rangappa v. Sri Mohan (2010) 11 SCC 441 is the leading authority and remains undisturbed.

Can the payee present the cheque more than once and issue successive notices?

Yes, but with a limit. The Three-Judge Bench in MSR Leathers v. S. Palaniappan (2013) 1 SCC 177 overruled Sadanandan Bhadran (1998) and held that the payee may present the cheque any number of times within its validity. On each presentation followed by a fresh notice within thirty days and a fresh fifteen-day failure-to-pay window, a fresh cause of action accrues. What the payee cannot do is issue more than one notice on the same dishonour.

Why is Section 143A prospective but Section 148 retrospective?

The Supreme Court drew the line on the substantive-versus-procedural distinction. In G.J. Raja v. Tejraj Surana (2019) 19 SCC 469, Section 143A was held prospective because it creates a substantive obligation — twenty per cent interim compensation during trial — that did not exist before the 2018 amendment. In Surinder Singh Deswal v. Virender Gandhi (2019) 11 SCC 341, Section 148 was held retrospective because it is purely procedural — a security deposit at the appellate stage — and does not create a new substantive liability.

What did Indian Bank Association v. Union of India (2014) actually direct?

Five working directions for cheque-bounce trials: (i) the magistrate shall scrutinise the complaint and issue summons by speed post on the same day; (ii) Section 200 CrPC verification is treated as discharged by the complainant's Section 145 affidavit; (iii) the trial shall ordinarily be summary, with reasons recorded for any conversion to summons trial under the Section 143 proviso; (iv) affidavit evidence is read at trial subject to the right to cross-examine; (v) the trial shall be concluded within six months of cognizance.

Are Suganthi Suresh Kumar and R. Vijayan still followed on sentencing quantum?

Yes. Suganthi Suresh Kumar v. Jagdeeshan (2002) 2 SCC 420 remains the foundational authority deprecating fleabite sentences and calling for liberal use of Section 357(3) CrPC. R. Vijayan v. Baby (2012) 1 SCC 260 supplied the quantum guideline — twice the cheque amount as the standard benchmark for compensation. The two are routinely cited together; the case-law that follows them — K.A. Abbas, K. Bhaskaran on the sentencing point — is consistent with the same direction.