Section 138 NI Act Inapplicable to Withdrawal Slips, Rules Kerala High Court

The Kerala High Court held that a withdrawal slip cannot be treated as a “cheque” for the purpose of initiating proceedings under Section 138 of the Negotiable Instruments Act.

The Court observed that Section 138 specifically applies to dishonour of cheques issued in discharge of a legally enforceable debt or liability.

A withdrawal slip, being merely an instruction to a bank for withdrawal of money, does not satisfy the statutory definition of a cheque.

Consequently, dishonour of such an instrument would not attract criminal liability under Section 138, and proceedings based on it are not maintainable.

[Clara Dominic v. Tomy Eapen & Ors.]