Punjab & Haryana High Court Rules on Cheque Payment and Unspecified Interest

In significant developments coming from Punjab and Haryana High Court, Justice Anoop Chitkara has addressed the legal consequences when a cheque is paid, but additional interest is claimed afterwards.

Facts of the Case

The dispute arose from a business transaction where Anju Rani issued cheques amounting to Rs. 5,05,621 to Ram Gupta for the purchase of plastic granules. Subsequently, the cheques were dishonored, resulting in two separate complaints filed under Section 138 of the Negotiable Instruments Act (NIA). The first complaint was for Rs. 4,80,000, and the second for Rs. 25,621. Anju Rani moved to quash these complaints, contending that the full amount had been transferred via RTGS before the complaints were lodged.

The petitioner’s attorney argued that the petitioner had initiated resolution of the dispute before the complainant filed the complaint in September 2013. This was evidenced by the petitioner making a total payment of Rs. 5,62,088 in eleven regular installments to the complainant. The complainant acknowledged receiving Rs. 5,62,088, which covered the total of Rs. 5,05,625 for the  cheques. However, she contended that she should receive additional compensation due to a claimed 24% interest rate.

Judgement

After rendering a decision in support of the petitioner, Justice Anoop Chitkara dismissed the case and all related proceedings. The petitioner paid more than the amount on the cheque—Rs. 5,62,088—which was recorded by the court. Under the Negotiable Instruments Act (NIA), the respondent’s claim for additional interest at a rate of twenty-four percent per year was unenforceable because it was not stated in either the initial complaint or the check.

The court emphasized that any interest claimed must be explicitly stated in the contract or the complaint. A cheque issued for the principal amount cannot be used to claim unspecified interest. Further, the court made it clear that the presumption only applies to the principal amount written on the check and does not apply to any interest that is not mentioned under Sections 118 and 139 of the Negotiable Instruments Act (NIA).

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