A lesser-known defence in Section 138 (Negotiable Instruments Act) prosecutions arises when a cheque carries a printed instruction capping its validity — commonly "valid only up to Rs. 10,00,000/-" — and is subsequently filled and presented for a higher sum.
In Gauri Shankar Paladiya v. Mukesh Kumar Saini & Anr. (Rajasthan High Court, Jaipur Bench, 12.09.2022), the cheque in question bore precisely such a printed ceiling of Rs. 10,00,000/-, yet was filled for Rs. 12,25,000/- and dishonoured on the ground "Exceeds Arrangement." Notably, the drawer had sufficient funds in the account — the dishonour was not for insufficiency of funds, but purely because the amount filled breached the printed ceiling.
The High Court held that an instrument filled beyond its own printed ceiling cannot be treated as a "valid negotiable instrument" under the NI Act. Consequently, cognizance under Section 138 could not be sustained, and both the trial court's cognizance order and the revisional court's affirming order were set aside.
The decision underscores an important drafting and due-diligence point: always verify any printed conditions on a cheque leaf before accepting it, and before filing a complaint, examine whether the dishonour reason reflects a genuine insufficiency-of-funds scenario or a structural defect in the instrument itself
About Ryan singh
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Lawyered up, teched out, and always two steps ahead.
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