Karnataka HC judgment on Negotiable Instruments Act upheld

Karnataka HC judgment on Negotiable Instruments Act upheld



Whether a cheque bounces due to insufficiency of fund in the bank account of the drawer, or whether he issues a ‘stop payment’ order to the bank, the consequences under the Negotiable Instruments Act would be the same, the Supreme Court held last week in the appeal, Rangappa vs Sri Mohan. Upholding the conviction of the drawer of the cheque, passed by the Karnataka high court, the Supreme Court further explained that when a cheque is issued, there is a presumption that it is to clear a debt or liability. The drawer of the cheque can, however, rebut the presumption. “There can be no doubt that there is an initial presumption which favours the complaining person,” the judgment said.