K.S. Anto vs Union of India And Ors.

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Index > Banking Law-Dishonour of Cheques

K.S. Anto vs Union of India And Ors. (Ker HC)

1993 76 CompCas 105 Ker

Offence under Section 138 is made when there is dishonor of Cheque drawn in discharge of liability, followed by written demand and failure to make payment.

Section 138 was introduced with a laudable public policy behind it. It is intended to prevent or curtail a mischief which is likely to affect financial transactions and thereby trade and business and ultimately, the economy of the country. Even though the normal rule is that an act or illegal omission, in order to constitute an offence, must have the requisite mental condition in the form of intention, knowledge or reasonable belief, that prerequisite could be statutorily dispensed with in appropriate cases by creating strict liability offences in the interest of the nation, just like offences under the Prevention of Food Adulteration Act. Further, there is no point in contending that mens rea is not required for constituting an offence punishable under Section 138. What is made an offence is not the drawing of a cheque alone. It must have been drawn in discharge, in whole or in part, of a legally enforceable debt or other liability. It must have been duly presented in time and dishonoured for the reasons specified. Then there must be a written demand for the amount within a specified time, followed by failure to make payment within another specified time. It becomes an offence only on such failure which is an illegal omission, made with requisite mens rea. [Para 4]