CHAPTER VI
OF PAYMENT AND INTEREST
78. To whom payment should be made
Subject to the provisions of section 82, clause (c), payment of the amount due on a promissory note, bill of exchange or cheque must, in order to discharge the maker or acceptor, be made to the holder of the instrument.
79. Interest when rate specified
When interest at a specified rate is expressly made payable on a promissory note or bill of exchange, interest shall be calculated at the rate specified, on the amount of the principal money due thereon, from the date of the instrument, until tender or realisation of such amount, or until such date after the institution of a suit to recover such amount as the court directs.
80. Interest when no rate specified
When no rate of interest is specified in the instrument, interest on the amount due thereon shall, 23[notwithstanding any agreement relating to interest between any parties to the instrument], be calculated at the rate of 24[eighteen per centum] per annum, from the date at which the same ought to have been paid by the party charged, until tender or realisation of the amount due thereon, or until such date after the institution of a suit to recover such amount as the court directs.
Explanation: When the party charged is the indorser of an instrument dishonoured by non-payment, he is liable to pay interest only from the time that he receives notice of the dishonour.
81. Delivery of instrument on payment or indemnity in case of loss
Any person liable to pay, and called upon by the holder thereof to pay, the amount due on a promissory note, bill of exchange or cheque is before payment entitled to have it shown, and is on payment entitled to have it delivered up, to him, or, if the instrument is lost or cannot be produced, to be indemnified against any further claim thereon against him.
CHAPTER VII
OF DISCHARGE FROM LIABILITY ON NOTES, BILLS AND CHEQUES
82. Discharge from liability
The maker, acceptor or endorser respectively of a negotiable instrument is discharged from liability thereon-
(a) By cancellation-to a holder thereof who cancels such acceptor's or endorser's name with intent to discharge him, and to all parties claiming under such holder,
(b) By release- to a holder thereof who otherwise discharges such maker, acceptor or endorser, and to all parties deriving title under such holder after notice of such discharge;
(c) By payment-to all parties thereto, if the instrument is payable to bearer, or has been endorsed in blank, and such maker, acceptor or endorser makes payment in due course of the amount due thereon.
83. Discharge by allowing drawee more than forty-eight hours to accept
If the holder of a bill of exchange allows the drawee more than 19[forty eight] hours, exclusive of public holidays, to consider whether he will accept the same, all previous parties not consenting to such allowance are thereby discharged from liability to such holder.
84. When cheque not duly presented and drawer damaged thereby
25[(1) Where a cheque is not presented for payment within a reasonable time of its issue, and the drawer or person on whose account it is drawn had the right, at the time when presentment ought to have been made, as between himself and the banker, to have the cheque paid and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of the banker to a large amount than he would have been if such cheque had been paid.
(2) In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade and of bankers, and the facts of the particular case.
(3) The holder of the cheques as to which such drawer or person is so discharged shall be a creditor, in lieu of such drawer or person, of such banker to the extent of such discharge and entitled to recover the amount from him.
Illustrations
(a) A draws a cheque for Rs. 1,000, and, when the cheque ought to be presented, has funds at the bank to meet it. The bank fails before the cheque is presented. The drawer is discharged, but the holder can prove against the bank for the amount of the cheque.
(b) A draws a cheque at Umballa on a bank in Calcutta. The bank fails before the cheque could be presented in ordinary course. A is not discharged, for he has not suffered actual damage through any delay in presenting the cheque.
85. Cheque payable to order
26[(1) Where a cheque payable to order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course.
(2) Where a cheque is originally expressed to be payable to bearer, the drawee is discharged by payment in due course to the bearer thereof, notwithstanding any endorsement whether in full or in blank appearing thereon, and notwithstanding that any such endorsement purports to restrict or exclude further negotiation.]
21[85A. Drafts drawn by one branch of a bank on another payable to order
Where any draft, that is an order to pay money, drawn by one office of a bank upon another office of the same bank for a sum of money payable to order on demand, purports to be endorsed by or on behalf of the payee, the bank is discharged by payment in due course.]
86. Parties not consenting discharged by qualified or limited acceptance
If the holder of a bill of exchange acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawees, all previous parties whose consent is not obtained to such acceptance are discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance.
Explanation: An acceptance is qualified,-
(a) where it is conditional, declaring the payment to be dependent on the happening of an event therein stated;
(b) where it undertakes the payment of part only of the sum ordered to be paid;
(c) where, no place of payment being specified on the order it undertakes the payment at a specified place, and not otherwise or elsewhere; or where, a place of payment being specified in the order, it undertakes the payment at some other place and not otherwise or elsewhere;
(d) where it undertakes the payment at a time other than that at which under the order it would be legally due.
87. Affect of material alteration
Any material alteration of a negotiable instrument renders the same void as against anyone who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties;
Alteration by endorsee:
and any such alteration, if made by an endorsee, discharges his endorser from all liability to him in respect of the consideration thereof.
The provisions of this section are subject to those of sections 20, 49, 86 and 125.
88. Acceptor or endorser bound notwithstanding previous alteration
An acceptor or endorser of a negotiable instrument is bound by this acceptance or indorsement notwithstanding any previous alteration of the instrument.
89. Payment of instrument on which alteration is not apparent
Where a promissory note, bill of exchange or cheque has been materially altered but does not appear to have been so altered,
or where a cheque is presented for payment which does not at the time of presentation appear to be crossed or to have had a crossing which has been obliterated,
payment thereof by a person or banker liable to pay, and paying the same according to the apparent tenor thereof at the time of payment and otherwise in due course, shall discharge such a person or banker from all liability thereon, and such payment shall not be questioned by reason of the instrument having been altered, or the cheque crossed.
90. Extinguishment of rights of action on bill in acceptor's hands
If a bill of exchange which has been negotiated is, at or after maturity, held by the acceptor in his own right, all rights of action thereon are extinguished.
CHAPTER VIII
OF NOTICE OF DISHONOUR
91. Dishonour by non-acceptance
A bill of exchange is said to be dishonoured by non-acceptance when the drawees, or one of several drawees not being partners, makes default in acceptance upon being duly required to accept the bill, or where presentment is excused and the bill is not accepted.
Where the drawee is incompetent to contract, or the acceptance is qualified the bill may be treated as dishonoured.
92. Dishonour by non-payment
A promissory note, bill of exchange or cheque is said to be dishonoured by non-payment when the maker of the note, acceptor of the bill or drawee of the cheque makes default in payment upon being duly required to pay the same.
93. By and to whom notice should be given
When a promissory note, bill of exchange or cheque is dishonoured by non-acceptance or non-payment, the holder thereof, or some party thereto who remains liable thereon, must give notice that the instrument has been so dishonoured to all other parties whom the holder seeks to make severally liable thereon, and to some one of several parties whom he seeks to make jointly liable thereon.
Nothing in this section renders it necessary to give notice to the maker of the dishonoured promissory note, or the drawee or acceptor of the dishonoured bill of exchange or cheque.
94. Mode in which notice may be given
Notice of dishonour may be given to a duly authorised agent of the person to whom it is required to be given, or, where he has died, to his legal representative, or, where he has been declared an insolvent, to his assignee; may be oral or written; may, if written, be sent by post; and may be in any form; but it must inform the party to whom it is given, either in express terms or by reasonable intendment, that the instrument has been dishonoured, and in what way, and that he will be held liable thereon; and it must be given within a reasonable time after dishonour, at the place of business or (in case such party has no place of business) at the residence of the party for whom it is intended.
If the notice is duly directed and sent by post and miscarries, such miscarriage does not render the notice invalid.
95. Party receiving must transmit notice of dishonour
Any party receiving notice of dishonour must, in order to render any prior party liable to himself, give notice of dishonour to such party within a reasonable time, unless such party otherwise receives due notice as provided by section 93.
96. Agent for presentment
When the instrument is deposited with an agent for presentment, the agent is entitled to the same time to give notice to his principal as if he were the holder giving notice of dishonour, and the principal is entitled to a further like period to give notice of dishonour.
97. When party to whom notice given is dead
When the party to whom notice of dishonour is despatched is dead, but the party despatching the notice is ignorant of his death, the notice is sufficient.
98. When, notice of dishonour is unnecessary
No notice of dishonour is necessary,-
(a) when it is dispensed with by the party entitled thereto;
(b) in order to charge the drawer, when he has countermanded payment;
(c) when the party charged could not suffer damages for want of notice;
(d) when the party entitled to notice cannot after due search be found; or the party bound to give notice is, for any other reason, unable without any fault of his own to give it;
(e) to charge the drawers, when the acceptor is also a drawer;
(f) in the case of a promissory note which is not negotiable;
(g) when the party entitled to notice, knowing the facts, promises unconditionally to pay the amount due on the instrument.
CHAPTER IX
OF NOTING AND PROTEST
99. Noting
When a promissory note or bill of exchange has been dishonoured by non-acceptance or non-payment, the holder may cause such dishonour to be noted by a notary public upon the instrument, or upon a paper attached thereto, or partly upon each, such note must be made within a reasonable time after dishonour, and must specify the date of dishonour, the reason, if any assigned for such dishonour, or if the instrument has not been expressly dishonoured, the reason why the holder treats it as dishonoured, and the notary's charges.
100. Protest
When a promissory note or bill of exchange has been dishonoured by non-acceptance or non-payment, the holder may, within a reasonable time, cause such dishonour to be noted and certified by a notary public. Such certificate is called a protest.
Protest for better security : When the acceptor of a bill of exchange has become insolvent, or his credit has been publicly impeached, before the maturity of the bill, the holder may, within a reasonable time, cause a notary public to demand better security of the acceptor, and on its being refused may, with a reasonable time, cause such facts to be noted and certified as aforesaid. Such certificate is called a protest for better security.
101. Contents of protest
A protest under section 100 must contain,-
(a) either the instrument itself, or a literal transcript of the instrument and of everything written or printed thereupon;
(b) the nature of the person for whom and against whom the instrument has been protested;
(c) a statement that payment or acceptance, or better security, as the case may be, has been demanded of such person by the notary public; the terms of his answer, if any, or a statement that he gave no answer, or that he could not be found;
(d) when the note or bill has been dishonoured, the place and time of dishonour, and, when better security has been refused, the place and time of refusal;
(e) the subscription of the notary public making the protest;
(f) in the event of an acceptance for honour or of a payment for honour, the name of the person by whom, of the person for whom, and the manner in which, such acceptance or payment was offered and effected.
17[A notary public may make the demand mentioned in clause (c) of this section either in person or by his clerk or, where authorised by agreement or usage, by registered letter.]
102. Notice of protest
When a promissory note or bill of exchange is required by law to be protested, notice of such protest must be given instead of notice of dishonour, in the same manner and subject to the same conditions; but the notice may be given by the notary public who makes the protest.
103. Protest for non-payment after dishonour by non-acceptance
All bills of exchange drawn payable at some other place than the place mentioned as the residence of the drawee, and which are dishonoured by non-acceptance, may, without further presentment to the drawee, be protested for non-payment, in the place specified for payment, unless paid before or at maturity.
104. Protest of foreign bills
Foreign bills of exchange must be protested for dishonour when such protest is required by the law of the place where they are drawn.
17[104A. When noting equivalent to protest
For the purposes of this Act, where a bill or note is required to be protested within a specified time or before some further proceeding is taken, it is sufficient that the bill has been noted for protest before the expiration of the specified time or the taking of the proceeding; and the formal protest may be extended at any time thereafter as of the date of the noting.]
CHAPTER X
OF REASONABLE TIME
105. Reasonable time
In determining what is a reasonable time for presentment for acceptance or payment, for giving notice of dishonour and for noting, regard shall be had to the nature of the instrument and the usual course of dealing with respect to similar instruments; and, in calculating such time, public holidays shall be excluded.
106. Reasonable time of giving notice of dishonour
If the holder and the party to whom notice of dishonour is given carry on business or live (as the case may be) in different places, such notice is given within a reasonable time if it is despatched by the next post or on the day next after the day of dishonour.
If the said parties carry on business or live in the same place, such notice is given within a reasonable time if it is despatched in time to reach its destination on the date next after the day of dishonour.
107. Reasonable time for transmitting such notice
A party receiving notice of dishonour, who seeks to enforce his right against a prior party, transmits the notice within a reasonable time if he transmits it within the same time after its receipt as he would have had to give notice if he had been the holder.
CHAPTER XI
OF ACCEPTANCE AND PAYMENT FOR HONOUR AND REFERENCE IN CASE OF NEED
108. Acceptance for honour
When a bill of exchange has been noted or protested for non-acceptance or for better security, any person not being a party already liable thereon may, with the consent of the holder, by writing on the bill accept the same for the honour of any party thereto 27[***].
109. How acceptance for honour must be made
A person desiring to accept for honour must, 28[by writing on the bill under his hand], declare that he accepts under protest the protested bill for the honour of the drawer or of a particular endorser whom he names, or generally for honour 29[***].
110. Acceptance not specifying for whose honour it is made
Where the acceptance does not express for whose honour it is made it shall be deemed to be made for the honour of the drawer.
111. Liability of acceptor for honour
An acceptor for honour binds himself to all parties subsequent to the party for whose honour he accepts to pay the amount of the bill if the drawee does not; and such party and all prior parties are liable in their respective capacities to compensate the acceptor for honour for all loss or damage sustained by him in consequence of such acceptance.
But an acceptor for honour is not liable to the holder of the bill unless it is presented, or (in case the address given by such acceptor on the bills is a place other than the place where the bill is made payable) forwarded for presentment, not later than the day next after the day of its maturity.
112. When acceptor for honour may be charged
An acceptor for honour cannot be charged unless the bill has at its maturity been presented to the drawee for payment, and has been dishonoured by him, and noted or protested for such dishonour.
113. Payment for honour
When a bill of exchange has been noted or protested for non-payment, any person may pay the same for the honour of any party liable to pay the same; provided that the person so paying 17[or his agent in that behalf] has previously declared before a notary public the party for whose honour he pays, and that such declaration has been recorded by such notary public.
114. Right of payer for honour
Any person so paying is entitled to all the rights in respect of the bill, of the holder at the time of such payment, and may recover from the party for whose honour he pays all sums so paid, with interest thereon and with all expenses properly incurred in making such payment.
115. Drawee in case of need
Where a drawee in case of need is named in a bill of exchange, or in any endorsement thereon, the bill is not dishonoured until it has been dishonoured by such drawee.
116. Acceptance and payment without protest
A drawee in case of need may accept and pay the bill of exchange without previous protest
CHAPTER XII
OF COMPENSATION
117. Rules as to compensation
The compensation payable in case of dishonour of promissory note, bill of exchange or cheque, by any party liable to the holder or any endorsee, shall 30[***] be determined by the following rules:
(a) the holder is entitled to the amount due upon the instrument together with the expense properly incurred in presenting, noting and protesting it;
(b) when the person charged resides at a place different from that at which the instrument was payable, the holder is entitled to receive such sum at the current rate of exchange between the two places;
(c) an endorser who, being liable, has paid the amount due on the same is entitled to the amount so paid with interest at 31[eighteen per centum] per annum from the date of payment until tender or realisation thereof, together with all expenses caused by the dishonour and payment;
(d) when the person charged and such endorser reside at different places, the endorser is entitled to receive such sum at the current rate of exchange between the two places;
(e) the party entitled to compensation may draw a bill upon the party liable to compensate him, payable at sight or on demand, for the amount due to him, together with all expenses properly incurred by him. Such bill must be accompanied by the instrument dishonoured and the protest thereof (if any). If such bill is dishonoured, the party dishonouring the same is liable to make compensation thereof in the same manner as in the case of the original bill.
CHAPTER XIII
SPECIAL RULES OF EVIDENCE
118. Presumptions as to negotiable instruments
Until the contrary is proved, the following presumption shall be made:-
(a) of consideration-that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;
(b) as to date-that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance-that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer-that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsements-that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps-that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course-that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been contained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
119. Presumption on proof of protest
In a suit upon an instrument which has been dishonoured, the court shall, on proof of the protest, presume the fact of dishonour, unless and until such fact is disproved.
120. Estoppel against denying original validity of instrument
No maker of a promissory note, and no drawer of a bill of exchange or cheque, and no acceptor of a bill of exchange for the honour of the drawer shall, on proof of the protest, presume the fact of dishonour, unless and until validity of the instrument as originally made or drawn.
121. Estoppel against denying capacity of payee to endorse
No maker of a promissory note, and no acceptor of a bill of exchange 32[payable to order] shall, in suit thereon by a holder in due course, be permitted to deny the payee's capacity, at the rate of the note or bill, to endorse the same.
122. Estoppel against denying signature or capacity of prior party
No endorser of a negotiable instrument shall, in a suit thereon by a subsequent holder, be permitted to deny the signature or capacity to contract of any prior party to the instruments.
NEGOTIABLE INSTRUMENTS ACT, 1881
CHAPTER XIV
OF CROSSED CHEQUES
123. Cheque crossed generally
Where a cheque bears across its face an addition of the words "and company" or any abbreviation thereof, between two parallel transverse lines or of two parallel transverse lines simply, either with or without the word "not negotiable", that addition shall be deemed a crossing, and the cheque shall be deemed to be crossed generally.
124. Cheque crossed specially
Where a cheque bears across its face an addition of the name of a banker, either with or without the words "not negotiable", that addition shall be deemed a crossing and the cheque shall be deemed to be crossed specially, and to be crossed to that banker.
125. Crossing after issue
Where a cheque is uncrossed, the holder may cross it generally or specially.
Where a cheque is crossed generally, the holder may cross it specially.
Where a cheque is crossed generally or specially, the holder may add the words "not negotiable".
Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker, his agent, for collection.
126. Payment of cheque crossed generally
Where a cheque is crossed generally, the banker on whom it is drawn shall not pay it otherwise than to a banker.
Payment of cheque crossed specially: Where a cheque is crossed specially, the banker on whom it is drawn shall not pay it otherwise than to the banker to whom it is crossed, or his agent for collection.
127. Payment of cheque crossed specially more than once
Where a cheque is crossed specially to more than one banker, except when crossed to an agent for the purpose of collection, the banker on whom it is drawn shall refuse payment thereof.
128. Payment in due course of crossed cheque
Where the banker on whom a crossed cheque is drawn has paid the same in due course, the banker paying the cheque, and (in case such cheque has come to the hands of the payee) the drawer thereof, shall respectively be entitled to the same rights, and be placed in the same position in all respects, as they would respectively be entitled to and placed in if the amount of the cheque had been paid to and received by the true owner thereof.
129. Payment of crossed cheque out of due course
Any banker paying a cheque crossed generally otherwise than to a banker, or a cheque crossed specially otherwise than to the banker to whom the same is crossed, or his agent for collection, being a banker, shall be liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid.
130. Cheque bearing "not negotiable"
A person taking a cheque crossed generally or specially, bearing in either case the words "not negotiable", shall not have and shall not be capable of giving, a better title to the cheque than that which the person from whom he took it had.
131. Non-liability of banker receiving payment of cheque
A banker who has in good faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment.
33[Explanation: A banker receives payment of a crossed cheque for a customer within the meaning of this section notwithstanding that he credits his customer's account with the amount of the cheque before receiving payment thereof.]
34[131A. Application of chapter to drafts
The provisions of this chapter shall apply to any draft, as defined in section 85A, as if the draft were a cheque.
CHAPTER XV
OF BILLS IN SETS
132. Set of bills
Bills of exchange may be drawn in parts, each part being numbered and containing a provision that it shall continue payable only so long as the others remain unpaid. All the parts together make a set; but the whole set constitutes only one bill, and is extinguished when one of the parts of a separates bill, would be extinguished.
Exception: When a person accepts or endorses different parts of the bill in favour of different person, he and the subsequent endorsers of each part are liable on such part as if it were a separate bill.
133. Holder of first acquired part entitled to all
As between holders in due course of different parts of the same set, he who first acquired title to his part is entitled to the other parts and the money represented by the bill.
CHAPTER XVI
OF INTERNATIONAL LAW
134. Law governing liability of maker, acceptor or endorser of foreign instrument
In the absence of a contract to the contrary, the liability of the maker or drawer of a foreign promissory note, bill of exchange or cheque is regulated in all essential matters by the law of the place where he made the instrument, and the respective liabilities of the acceptor and endorser by the law of the place where the instrument is made payable.
Illustration
A bill of exchange was drawn by A in California where the rate of interest is 25 per cent, and accepted by B, payable in Washington where the rate of interest is 6 per cent. The bill is endorsed in 35[India], and is dishonoured. An action on the bill is brought against B in 14[India]. He is liable to pay interest at the rate of 6 per cent, only; but if A is charged as drawer, A is liable to pay interest at the rate of 25 per cent.
135. Law of place of payment governs dishonour
Where a promissory note, bill of exchange or cheque is made payable in a different place from that in which it is made or endorsed, the law of the place, where it is made payable determines what constitutes dishonour and what notice of dishonour is sufficient.
Illustration
A bill of exchange drawn and endorsed in 14[India], but accepted payable in France, is dishonoured. The endorsee causes it to be protested for such dishonour, and gives notice thereof in accordance with the law of France, though not in accordance with the rules herein contained in respect of bills which are not foreign. The notice is sufficient.
136. Instrument made, etc. out of India, but in accordance with the law of India
If a negotiable instrument is made, drawn, accepted or endorsed 35[outside India], but in accordance with the 35[law of India], the circumstance that any agreement evidenced by such instrument is invalid according to the law of the country wherein it was entered into does not invalidate any subsequent acceptance or endorsement made thereon 35[within India].
137. Presumption as to foreign law
The law of any foreign country 36[***] regarding promissory note, bills of exchange and cheques shall be presumed to be the same as that of 37[India], unless and until the contrary is proved.
38[CHAPTER XVII]
OF PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNTS
138. Dishonour of cheque for insufficiency, etc., of funds in the accounts
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both:
PROVIDED that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability.
139. Presumption in favour of holder
It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, or any debt or other liability.
140. Defence which may not be allowed in any prosecution under section 138
It shall not be a defence in a prosecution of an offence under section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that section.
141. Offences by companies
(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
PROVIDED that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act, has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation: For the purpose of this section
(a) "company" means any body corporate and includes a firm or other association of individuals; and
(b) "director", in relating to a firm, means a partner in the firm.
142. Cognisance of offences
Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),-
(a) no court shall take cognisance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause -of- action arises under clause (c) of the proviso to section 138;
(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.
SCHEDULE : ENACTMENT REPEALED
[Rep. by the Amending Act, 1891 (12) of 1891), sec. 2 and Sch. 1, Pt. I].
FOOT NOTES

1 The Act has been extended to Goa, Daman, and Diu by Regulation 12 of 1962, and to Dadra and Nagar Haveli w.e.f. 1st. July, 1965 by Regulation No. 6 of 1963.
2 Substituted by the AO 1950 for the words "all the Provinces of India".
3 The words "except the State of Jammu and Kashmir" omitted by Act No. 62 of 1956.
4 See now the Reserve Bank of India Act, 1934
5 Definition of "India" omitted by Act No. 62 of 1956.
6 Substituted by Act No. 37 of 1955, for the definition of word "banker" w.e.f. 1st. April, 1956.
7 Definition of "notary public" omitted by Act No. 53 of 1952 w.e.f. 14th. February, 1956.
8 Substituted by Act No. 2 of 1885, for the words "When acceptance is refused and the bill is protested for non-acceptance".
9 Substituted for the words "payable to, or to the order of, a payee" by Act No. 8 of 1919.
10 Substituted by Act No. 36 of 1957, for the words "a State".
11 Substituted by Act No. 8 of 1919.
12 Added by Act No. 5 of 1914.
13 Section 16 renumbered as sub-section (1) and sub-section (2) added by Act No. 5 of 1914.
14 Substituted by Act No. 3 of 1951 for the words "the States".
15 The Words "New-Year's day, Christmas day: if either of such days falls on a Sunday, the next following Monday; Good-Friday;" omitted by Act No. 37 of 1955 w.e.f. 1st. April, 1956.
16 Substituted by the AO 1937, for "LG".
17 Inserted by Act No. 2 of 1885.
18 Substituted for words "payable to the order of a specified person, or to a specified person on order" by Act No. 8 of 1919.
19 Substituted by Act No. 12 of 1921 for the words "twenty-four".
20 Inserted by Act No. 6 of 1897.
21 Inserted by Act No. 25 of 1920.
22 Inserted by Act No. 12 of 1921.
23 Substituted by Act No. 30 of 1926, for the words "except in cases provided for by the Code of Civil Procedure".
24 Substituted by Act No. 66 of 1988 for the words "six per centum", w.e.f. 30th. December, 1988.
25 Substituted by Act No. 6 of 1987.
26 Section 85 re-numbered as sub-section (1) and sub-section (2), added by Act No. 17 of 1934.
27 Second sentence omitted by Act No. 2 of 1885.
28 Substituted by Act No. 2 of 1885, for the words "in the presence of a notary public, subscribe the bill with his own hand, and".
29 The words "and such declaration must be recorded by the notary in his register" omitted by Act No. 2 of 1885.
30 The words, figure and brackets "(except in cases provided for by the Code of Civil Procedure, s. 532)" omitted by Act No. 30 of 1926.
31 Substituted by Act No. 66 of 1988 for "six per centum" w.e.f. 30th. December, 1988.
32 Substituted by Act No. 8 of 1919 for the words "payable to, or to the order of, a specified person".
33 Added by Act No. 18 of 1922.
34 Added by Act No. 33 of 1947.
35 Certain words were successively amended by the AO 1948, the AO 1950 and Act No. 3 of 1951.
36 The words "or the State of Jammu and Kashmir" omitted by Act No. 62 of 1956.
37 The words "British India" has been successively substituted by the AO 1948, AO 1950 and Act No. 3 of 1951 to read as above.
38 Inserted by Act No. 66 of 1988, w.e.f. 1-4-1989. Earlier Chapter XVII relating to "Notaries Public" Inserted by Act No. 2 of 1985 was replaced by the Notaries Act, 1952 (53 of 1952) w.e.f. 14th. February, 1956.