Question

Which of the following sections of the Negotiable Instruments Act, 1881, deals with the dishonor of a cheque?

• A. Section 138
• B. Section 139
• C. Section 140
• D. Section 141

Hint:

Section 138 of the NI Act is the famous "cheque bounce" section. It's the core provision that criminalizes the act of issuing a cheque without sufficient funds in the account.

Answer 1

The Correct Option is A

Section 138 of the Negotiable Instruments Act, 1881, is the primary provision that makes the dishonour of a cheque for insufficiency of funds a criminal offence. It creates a statutory offence, making a person who issues a cheque that bounces liable for imprisonment for a term which may extend to two years, or with a fine which may extend to twice the amount of the cheque, or with both. The subsequent sections (139-142) lay down the presumptions, defences, and procedures related to the prosecution of an offence under Section 138.