C482/272/2023
2023 Latest Caselaw 422 UK

                     Office Notes, reports,
SL.                orders or proceedings or
          Date                                                  COURT'S OR JUDGES'S ORDERS
No                 directions and Registrar's
                     order with Signatures


      17.02.2023
                                                C482 No. 272 of 2023
                                                Hon'ble Sharad Kumar Sharma, J.

Mr. V.K. Kaparuwan, Advocate, for the applicant.

Section 56 of the Negotiable Instruments Act lays down, that where instrument is presented for its encashment and if the amount referred to therein, any part of it has been paid prior to its presentation, the same has had to be endorsed in the instrument itself.

The said prospective effect of Section 56 of the N.I. Act and its purposive effect was considered by the Hon'ble Apex Court in a judgment as reported in 2022 (Live law) SC 830, Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel and Another, wherein in para 29 of the said judgment, the Hon'ble Apex Court has laid down, that where a part payment has been made, in that eventuality in the light of the provisions contained under Section 56 of the Negotiable Instruments Act, the instrument should bear an endorsement bringing the fact on record about the act of a prior part payment with the amount due to be paid and if the same is not done, Section 138 of the Negotiable Instruments Act, could not be attracted. Para 29 of the aforesaid judgment of Dashrathbhai Trikambhai Patel (supra) is extracted hereunder:-

"29. Under Section 56 read with Section 15 of the Act, an endorsement may be made by recording the part-payment of the debt in the cheque or in a note appended to the cheque. When such an endorsement is made, the instrument could still be used to negotiate the balance amount. If the endorsed cheque when presented for encashment of the balance amount is dishonoured, then the drawee can take recourse to the provisions of Section 138. Thus, when a part- payment of the debt is made after the cheque was drawn but before the cheque is encashed, such payment must be endorsed on the cheque under Section 56 of the Act. The cheque cannot be presented for encashment without recording the part payment. If the unendorsed cheque is dishonoured on presentation, the offence under Section 138 would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment."

In extension to his argument, the learned counsel for the applicant has referred to the pleadings raised in para 15, that out of the total amount due, he has already made a part payment of Rs. 5,00,000/- on 05.05.2020, prior to drawing instrument subsequent to 05.09.2021.

Issue notice to respondent.

Steps would be taken by the applicant within a week.

List thereafter.

Till the next date of listing, further proceedings of Complaint Case No. 428 of 2021, Surendra Kumar Kakkad Vs. Sanjay Kumar Prajapati, which is pending consideration before the Court of Judicial Magistrate, Doiwala, District Dehradun, would be kept in abeyance.

(Sharad Kumar Sharma, J.) 17.02.2023 Mahinder/