Anirban issues an open 'bearer' cheque for ₹11,50,000 in favour of Bhemin who strikes out the word 'bearer' and puts crossing across the cheque. The cheque is thereafter negotiated to Cherian and Dhruven. When it is fina

CS Professional · Multidisciplinary Case Studies · PYQS · June 2024
Anirban issues an open 'bearer' cheque for ₹11,50,000 in favour of Bhemin who strikes out the word 'bearer' and puts crossing across the cheque. The cheque is thereafter negotiated to Cherian and Dhruven. When it is finally presented by Dhruven's banker, it is returned with remarks 'payment countermanded' by the drawer. In response to this legal notice from Dhruven, Anirban pleads that the cheque was altered after it had been issued and therefore, he is not bound to pay the cheque. Referring to the provisions of the Negotiable Instruments Act, 1881 and settled case law: Dhruven presented the cheque twice and after being dishonoured, filed the complaint based on the second statutory notice. Is the appeal allowed ?

Answer & Explanation:

The facts of the case are similar to that of M/s. Sicagen India Ltd. (Appellant) Vs. Mahindra Vadineni & Ors. (Respondent), where the court held that the complaint filed based on the second statutory notice is not barred and the complaint filed on the same cause of action is maintainable. A 'Cheque Bounce' Complaint Filed, based on a Second Statutory Notice issued after re-presentation of cheques, is maintainable. Thus, Dhruven's appeal can be allowed.

Topics: Negotiable Instruments Act, 1881

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