One of the essential conditions for the offence under Section 138 of the Negotiable Instruments Act is that the cheque which is returned unpaid by bank must have been “for the discharge, in whole or in part, of any debt or other liability”.
Therefore, the answer to your question would depend on the detailed facts of your case. Whether the cheque was given to the bank for processing the application for home loan for the bank charges or process fee? Whether such bank charges were required to be paid in advance as a pre-condition? Whether the bank was entitled to claim these bank charges irrespective of whether the loan was sanctioned or not? Whether there was a clause of not returning such bank charges even if you withdrew the loan application? Whether the application had already been processed by bank, in whole or in part, entitling the bank to claim its bank charges? Or, whether the application was withdrawn by you at the very initial stage itself?
So, appreciate that it would ultimately depend on the question whether the condition that the cheque was given “for the discharge, in whole or in part, of any debt or other liability” is satisfied. If so, then the “stop payment” of such cheque may invite the offence under Section 138 of the said Act.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.
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