Supreme Court: Cheque Bounce Case Maintainable Even for Cash Loans Above ₹20,000

The Supreme Court has ruled that a complaint under Section 138 of the Negotiable Instruments Act is maintainable even for a cash loan exceeding ₹20,000, setting aside the Kerala High Court's contrary judgment.

The apex court clarified that the limitation under Section 269SS of the Income Tax Act (which restricts cash transactions above ₹20,000) does not invalidate the underlying debt or the cheque issued for its repayment.

The NI Act's purpose is to protect the sanctity of negotiable instruments, independent of tax law compliance. The Court also issued elaborate guidelines to trial courts to reduce the backlog of cheque bounce cases.

[Sanjabij Tari v. Kishore S. Borcar & Anr.]