What are the remedies in case of Payment of a cheque stopped by
drawer? How to file file Complaint in case of stop payment of
cheque? Options u/s Section 138 of Negotiable Instruments Act
It is common practice of some people who
intentionally cheat the debtor by issuing cheque and giving instruction to the
bank to stop payment against the cheque.
Payment of the cheque may be stopped due to many reasons
like misplace of cheque, issue of alternate cheque, discharge of liability by
paying in other modes etc. One of the most important point is sometimes the
drawer of a cheque may stop payment due to supply of inferior goods or poor
service which violates the agreements or terms agreed by the other party. In
such cases aggrieved party is the customer, Even though the other party have the
option to pressurize the drawer of the cheque to make payment.
But in many cases
stop payment is being used to escape from liability of payment and to avoid
proceedings under section 138 of Negotiable Instruments Act 1881.
Treatment for in case of stop payment of cheque is not clearly defined in the
Negotiable Instruments Act. But to file a case under Negotiable Instruments Act,
the following conditions should be satisfied.
The cheque is drawn on a bank for the discharge of a legally enforceable debt
or other liability.
The cheque has returned by the bank unpaid.
The cheque is returned unpaid because the amount available in that account is
insufficient for making the payment of the cheques.
The payee gives a notice to the drawer claiming the amount within 15 days of
the receipt of the information by the Bank and
The drawer fails to make payment within 15 days of the receipt of notice.
Form the above mentioned conditions point No. 3 clearly indicates that if the
amount is available in the bank account and stop payment is made due to some
other reasons, the case may not be registered under section 138 of the
Negotiable Instruments Act.
But point No. 5 remain constant and if the drawer fails to make payment within
15 days of receipt of notice the case will come under section 138 of Negotiable
instruments Act 1881.
According to a Supreme Court version even if the cheque is bounced because of
stop payment, if the bank account is having sufficient balance to meet the
cheque amount, and if the person who gives stop payment is having valid and
sufficient reasons for giving such instructions, the accused can be acquitted.
This means that the drawer have to establish during trial that there is no
legally enforceable liability for the cheque taken by them and because of that
reason only you have stopped the cheque from payment.
In nutshell whatever may be the reason or ground for dishonor of a cheque by
bank whether it may be payment stopped by drawer or any other reason, offence
under this section is made out and the drawee has the full right to initiate
proceedings. The court may also examine whether the payment has been made by the
drawer within 15 days of notice issued by the drawee after dishonor of the