Cheque issued for bribe payment not enforceable under NI Act: Punjab and Haryana HC [Read Order]

Punjab: The Punjab and Haryana High Court has delivered a significant judgment dismissing a petition challenging an acquittal in a cheque bounce case, ruling that a bribe amount cannot constitute a legally enforceable liability under the Negotiable Instruments Act.

Justice Manjari Nehru Kaul made important observations while addressing an appeal filed against a judgment dated January 15, 2020, passed by the JMIC, Ferozepur, which had acquitted the accused under Sections 138/142 of the Negotiable Instruments Act, 1881.

Cheque Issued for Bribe Payment Cannot Be Enforced: Key Judgment from Punjab and Haryana High Court

The court addressed a case where the appellant had paid Rs. 1,20,000 as a bribe to secure employment in the Punjab Police. The court observed, “Under Section 138 of the NI Act, the mere issuance of a cheque does not constitute an offence unless it is proven that the cheque was issued for the discharge of a debt or liability that is legally enforceable.”

The case originated when the respondent’s brother-in-law allegedly took money under false pretenses of securing government jobs. After an FIR was registered, the respondent issued a cheque for Rs. 1,00,000, which was subsequently dishonored due to a closed account.

High Court Clarifies Bribe Payments Do Not Constitute Legally Enforceable Debt Under NI Act

The court upheld the trial court’s decision, stating, “It is well-settled law that any debt or liability arising from a contract or promise that is unlawful, immoral, or not legally enforceable does not attract the provisions of Section 138 of the Act. A payment made as a bribe, being an illegal and immoral transaction, does not constitute a legally enforceable liability.”

The High Court emphasized that the appellant had admitted during cross-examination that the cheque amount represented a bribe payment for securing government employment, which automatically rendered it unenforceable under the law.

Justice Kaul concluded by noting that the trial court’s findings were “in consonance with the settled principles of law governing the enforcement of negotiable instruments.”

Mr. Ramesh Kumar Jha, Advocate, appeared for the applicant-appellant through video conferencing.

Case Title: Surinder Singh vs Ram Dev

[Read Order]