{"id":1744,"date":"2022-09-20T18:50:59","date_gmt":"2022-09-20T13:20:59","guid":{"rendered":"https:\/\/www.leadindia.law\/blog\/en\/?p=1744"},"modified":"2022-12-24T18:04:41","modified_gmt":"2022-12-24T12:34:41","slug":"section-138-of-negotiable-instrument-act","status":"publish","type":"post","link":"https:\/\/www.leadindia.law\/blog\/en\/section-138-of-negotiable-instrument-act\/","title":{"rendered":"Cheque Bounce Explained: Section 138 of Negotiable Instrument Act"},"content":{"rendered":"\n

The Negotiable Instrument Act, which was created to facilitate the expansion of banking and commercial operations, was enacted in the year 1881. Legalising the scheme of negotiable instruments was the main goal of this enactment. Negotiable Instruments are documents that can enable the transfer of certain monetary value in a legalised manner.<\/a> The document creates an obligation to pay the agreed-upon amount at a specified future period or immediately upon request, as applicable. <\/p>\n\n\n\n

Thus, the purpose of the Act can be interpreted to regulate certain financial transactions. The law governing negotiable instruments is legislation that focuses on the business world and was enacted to make trade and commerce simpler by creating provisions for the sanctification of instruments of credit that might be thought of as simply converted into money. A cheque is a form of negotiable instrument which has been defined under Section 6 of the Act. Section 138 of the Act deals with the dishonour of cheques. A circumstance known as “cheque dishonour” <\/a>occurs when a bank declines to pay the sum of a cheque to the payee because of insufficient funds, among other reasons.<\/p>\n\n\n\n

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