LAW FOR ALL : Where multiple cheques arising out of the same underlying transaction are distinct instruments, drawn on different accounts, presented on different dates, and dishonoured separately, each dishonour followed by independent statutory compliance gives rise to a separate cause of action under Section 138 of the Negotiable Instruments Act; and whether such cheques were issued as alternative, supplementary, or substitute instruments is a disputed and mixed question of fact requiring evidence, which cannot be adjudicated in exercise of inherent jurisdiction under Section 482 CrPC.

Saturday, January 10, 2026

Where multiple cheques arising out of the same underlying transaction are distinct instruments, drawn on different accounts, presented on different dates, and dishonoured separately, each dishonour followed by independent statutory compliance gives rise to a separate cause of action under Section 138 of the Negotiable Instruments Act; and whether such cheques were issued as alternative, supplementary, or substitute instruments is a disputed and mixed question of fact requiring evidence, which cannot be adjudicated in exercise of inherent jurisdiction under Section 482 CrPC.

Paras 33–35, 34, 26–28

Where multiple cheques arising out of the same underlying transaction are distinct instruments, drawn on different accounts, presented on different dates, and dishonoured separately, each dishonour followed by independent statutory compliance gives rise to a separate cause of action under Section 138 of the Negotiable Instruments Act; and whether such cheques were issued as alternative, supplementary, or substitute instruments is a disputed and mixed question of fact requiring evidence, which cannot be adjudicated in exercise of inherent jurisdiction under Section 482 CrPC.

ANALYSIS (What the Court actually examined)

Factual premise before the Court

Multiple cheques were issued in relation to one transaction.

Cheques were:

separate instruments,

drawn on different accounts (personal and firm),

presented on different dates,

dishonoured on different dates,

followed by independent statutory notices.

Error committed by the High Court

The High Court assumed that one set of cheques was issued in lieu of or in substitution of another.

On that assumption, it quashed one complaint under Section 482 CrPC, treating continuation as abuse of process.

Supreme Court’s correction

The Apex Court held that:

whether cheques were alternative, supplementary, or substituted instruments depends on intention of parties,

such intention is disputed and cannot be presumed,

adjudicating this requires evidence and trial.

Scope of Section 482 CrPC reiterated

The High Court cannot:

decide disputed factual issues,

assess intention behind issuance of cheques,

or determine substitution/novation at the threshold.

Doing so amounts to an impermissible mini-trial.

NI Act framework applied

Each dishonour, if statutory steps are completed, constitutes an offence.

Defences such as absence of liability, adjustment of amounts, or substitution of cheques are matters of trial, not quashing.

RATIO DECIDENDI (Narrow and Authoritative)

The High Court cannot quash a complaint under Section 138 of the Negotiable Instruments Act by assuming that one set of cheques substitutes or replaces another, since whether multiple cheques issued in respect of the same transaction are alternative, supplementary, or substituted instruments is a mixed question of fact requiring evidence and trial, and cannot be decided in exercise of inherent jurisdiction under Section 482 CrPC.