Legally Enforceable Debt Or Other Liability Under Section 138 Of The Negotiable Instruments Act: From Statutory Text To Judicial Principle
- IJLLR Journal
- Jul 19
- 2 min read
Nikhil Mathur, LL.M. (Jai Minesh Adivasi University, Kota) LL.B. (Faculty of Law, University of Delhi)
ABSTRACT
Section 138 of the Negotiable Instruments Act 1881 which is a penal provision was introduced by The Banking, Public Financial Institutions and Negotiable Instruments Law (Amendment) Act 1988, which makes the requirement of a “legally enforceable debt or other liability” an essential prerequisite to be fulfilled in case of dishonour of a cheque to attract criminal liability. This expression forms the very basis of attracting criminal liability under section 138 (subject to other conditions). Despite being the fundamental condition, it is nowhere defined in the statute to provide clarity on when a debt or liability can be said to be enforceable by law and it is because of this reason, the Judiciary takes the responsibility to construe the meaning of this abovementioned expression.
This article examines the decisions of the Supreme Court which collectively contributed to the development of this statutory expression and shows how an undefined statutory requirement changes into a well defined expression under Section 138 in a gradual manner.
The article demonstrates that the judicial interpretation of this expression resulted not only in identifying the debt which is legally enforceable and capable of attracting criminal liability but also in preserving the distinction between civil liability and criminal prosecution and finally concludes that the term legally enforceable debt or other liability is not merely an ingredient but is also the foundation upon which the entire doctrine of cheque dishonour has developed and still continues to determine the scope and limits of criminal liability under the provision.
Keywords: Section 138, Negotiable Instruments Act, Legally Enforceable Debt, Cheque Dishonour, Statutory Presumption, Criminal Liability.
