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Cheque is invalid if there is uncertainty as to the amount written in words

In M/s Shree Tyres vs State, revision petition was filed before the Delhi Sessions Court for setting aside order dated 06.06.2019 passed by Ld. MM whereby the ld MM had dismissed the application for discharge of accused/ revisionists under section 138 Negotiable Instruments (NI) Act.

One of the grounds raised by the petitioner was that there was discrepancy between the amount written in figures and words in the cheque which puts the very instrument in doubt as per the NI Act. The petitioner contended that the document which was presented before the bank was not a cheque or a negotiable instrument within the definition of the NI Act and the offence u/s 138 NI Act could only have been attracted if a cheque is dishonoured.

The Court observed that the amount written in words is absurd and in no manner can help in ascertainment of the cheque amount. The amount in figures has been written as "Rs.44,18,896/-" whereas, the amount in words is written as "Forty Four Lacs Eighteen Lacs Eight Hundred and Ninety Six only".

As per the definition in the NI Act, a bill of exchange has to be : (1) an instrument in writing, (2) containing an unconditional order signed by the maker, (3) directing a certain person to pay, (4) a certain sum of money and, (5) only to, or to the order of, a certain person or to the bearer of the instrument.

The Court said that while the instrument does not satisfy the point no. 4, as per Section 18 of the NI Act, merely because the amount to be paid as stated in figures and words is different, a cheque or an instrument does not become invalid and the amount stated in words shall be considered to be amount undertaken or ordered to be paid.

However, in the present case, the amount mentioned in words cannot be said to be a certain amount of money as it is an absurdity which makes that amount unquantifiable. It is correct that if the amount written in figures when read had made a sense, it would have become a certain amount and could have satisfied the condition of certainty as to the amount as required by section 5 of NI Act. In the present case, even section 18 of NI Act cannot be applied to the instrument in question. This is because of the absurdity of the amount as mentioned in words in the instrument. Once there is a difference in the amount in the instrument as written in words and figures, the amount written in figures becomes immaterial and cannot be resorted to find what was the intended sum of money ordered to be paid through such instrument.

The Court decided that the amount stated in words is absurd and thus the certainty which is required by sections 5 & 6 of the NI Act with regard to the amount to be paid is missing in this instrument. That being the case, this instrument was not a valid cheque when presented before the bank and the bank had also refused to honour this instrument only on the ground that cheque was irregularly drawn / amount in words and figures differed.









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