Home Case Index All Cases Companies Law Companies Law + SC Companies Law - 2001 (9) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2001 (9) TMI 993 - SUPREME COURTWhether the instrument which is described by both sides as a ‘Pay Order’ is a cheque within the meaning of section 138 of the Negotiable Instruments Act, 1881? Held that:- Appeal allowed. As learned Single Judge expressed the opinion that a demand draft may be a Bill of Exchange if it is issued by one bank drawn on another. The said observation was made in the wake of the contention that the collecting bank could claim protection under section 131. The said decision of the Bombay High Court cannot hold good because the Negotiable Instruments Act was amended by incorporating section 131A in the said Act. We, therefore, dissent from the view adopted by the learned Single Judge in the impugned judgment that the pay order is not a cheque. It is undisputed that the complainant-company is the holder of the instrument in its own right. As such it could be a holder in due course also until the concerned party adduces evidence to rebut the presumption. It is of course open to the respondents to rebut the presumption in the trial but till then the High Court could not say that the complainant is not a holder in due course at all.
|