Is Intention necessary for Establishing Offence u/ S 138 of NI Act?


June 15, 2018

In 1988 vide Banking, Public Financial Institutions and Negotiable Instrument Laws (Amendment) Act 1988 Chapter XVII (Section 138 to 142) was incorporated in the Act of 1981. Earlier to the said Amendment, no criminal charge could be brought against the drawer of cheque unless the doctrine of mens rea was established as mandated under Section 415 and 420 of Indian Penal Code.

Section 138  of the Negotiable Instruments Act, 1881, provides for an offence which is not based on mens rea – The Bombay High Court in the case of Mayuri Pulse Mills v. Union of India[1] remarked that Section 138 of the Negotiable Instruments Act, 1881, provides for an offence which is not based on mens rea. Normally, in criminal law, existence of guilty intent is an essential ingredient of a crime and the principle is expressed In the maxim actus non facit reum nisi mens sit rea. This is a general principle. However, the Legislature can always create an offence of absolute liability or strict liability where mens rea is not at all necessary. Such a measure is resorted to in public interest and such laws of strict liability are justified and cannot be said to be unreasonable.

Thus, mere dishonour of a cheque for the reasons stated in Section 138 of the Negotlable Instruments Act, 1881, is sufficient for commission of crime under Section 138 of the Act, and it is not material whether he had reason to believe when he issued the cheque that the cheque may not be dishonoured on presentment. For an offence under Section 138  of the Negotiable Instruments Act, 1881, mens rea is not essential, which is clearly spelt out from a reading of section 138. The said provision clearly rules out mens rea as a constituent part of the crime. 

A similar observation was made by the Court in the case of B. Mohan Krishna v. Union of India[2], wherein it was remarked that the absence of mens rea in Section 138 is not arbitrary as it would then violate Article 14 of the Constitution. English decisions do not support the proposition that absence of mens rea is fatal to any legislation creating an offence. Although there is presumption that a guilty mind is a necessary ingredient of an offence, it can be displaced either by words of the statute creating the offence or by the subject matter with which the offence deals.

Section 138 excludes mens rea by creating a Strict Liability- The wording of the provision “such person shall be deemed to have committed an offence” indicates that the statutory provision creates a strict liability. The returning of the cheque by the Bank for one of the two reasons stated in the section is the necessary condition creating strict liability. If the cheque is dishonored on any other ground, the offence u/ section 138 is not made out.

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[1] (1996) 86 Comp Cas 121

[2] 1986, 86 Comp Cas 487