Cause of Action for Cheque Dishonour U/S.138 Arises Only After 15 Days of Demand Notice Receipt : SC
- Case Name: Vishnoo Mittal v. M/s Shakti Trading Company
- Judge(s): Justices Sudhanshu Dhulia and Ahsanuddin Amanullah
The Supreme Court ruled that the offense under Section 138 of the NI Act arises only when the drawer fails to pay within 15 days of receiving the demand notice, not upon dishonor of the cheque.
A bench quashed the cheque dishonor case, noting that the cause of action arose after the moratorium under IBC, making the proceedings unsustainable.
The court emphasized that all six conditions under S.138 NI Act must be met for an offense to be constituted, citing Jugesh Sehgal v. Shamsher Singh Gogi (2009).
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