Negotiable Instruments Act, 1881 is an act in India which is to promote the efficacy of banking operations and to ensure credibility in transacting business through negotiable instruments like cheques. Before 1988 there being no provision to restrain the person issuing the Cheque without having sufficient funds in his account. Of course on Dishonoured cheque there is a civil liability accrued. In order to ensure promptitude and remedy against the defaulters of the Negotiable Instrument a criminal remedy of penalty was inserted in Negotiable Instruments Act, 1881 by amending it with Negotiable Instruments Act, 1988. Parliament enacted the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 (55 of 2002), which is intended to plug the loopholes. This amendment Act inserts five new sections from 143 to 147 touching various limbs of the parent Act and Cheque truncation through digitally were also included and the amendment Act has been recently brought into force on Feb. 6, 2003.
To constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
1.a must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account
2.the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
3.that cheque has been presented to bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;[10]
4.that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;
5.the payee or the holder in due course of the cheque 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 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
6.the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
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