Holder of cheque in due course - Payee - 138
Negotiable Instruments Act, 1881 - Section 7, 118(g), 138 - A holder of a cheque - Is also entitled to the benefit of legal presumption under Section 118(g) of the N.I.Act that he came into possession of the instrument in due course unless it is shown to have come to the custody of the possessor by means of an offence, fraud or other unlawful means - When the holder becomes a payee, he could successfully prosecute the drawer of the cheque under Section 138 of the N.I.Act irrespective of whether or not he had direct transaction with the drawer.
Negotiable Instruments Act, 1881 - Section 7, 138 - Payee - Section 138 of the N.I.Act does not demand that drawer should have had transaction or dealing with the payee in whose name the cheque was drawn - Section 7 of the N.I.Act defines 'payee' - The definition does not stipulate that he should necessarily be a person having had direct dealing or financial transaction with the drawer - The 'payee' is a person to whom or to whose order money is made payable by the instrument - Payee therefore could be any person whom the drawer of cheque may, to his choice, refer to his banker, no matter the drawer has not incurred any liability to the person named by him in the cheque - Section 138 of the N.I.Act does not demand that drawer should have had transaction or dealing with the payee in whose name the cheque was drawn.