Madras High Court· 22 July 2026
Can the payee of a cheque sue on the original debt without presenting the cheque?
S.Ravichandran v. M/s.Sri Naga Agencies
AS(MD) No. 174 of 2019 · AS(MD) No. 174 of 2019
Coram: Justice G.R.Swaminathan · Justice K.K.Ramakrishnan
Answer
Yes. Stamping is a requirement for promissory notes and bills of exchange but not for cheques, so no drawer can plead that the cheque contains the terms of the agreement and that, being inadmissible, the payee cannot rely on the original consideration. The holder or payee may sue the drawer on the original consideration even without presenting the instrument to the drawee; the original debt is not extinguished by the issuance of the cheque, and the liability is extinguished only when it is encashed.
Headnote
Negotiable Instruments Act, 1881 — s.64 — s.118 — s.139 — Code of Civil Procedure, 1908 — Order 37 — Evidence Act — s.73 — Cheque — Original consideration — Burden of proof —
Negotiable Instruments Act, 1881 — Cheque — Suit on the original consideration —
Held: Stamping is required of a promissory note but not of a cheque, so a drawer cannot say the instrument is the contract and bars a suit on the debt; the payee may sue on the original consideration. (¶13)
Negotiable Instruments Act, 1881 — s.118 — Execution denied — Burden on the plaintiff —
Held further: Where execution of the cheque is denied, the burden lies wholly on the plaintiff to prove it, and failure to seek an expert's opinion is fatal; the presumption arises only once due execution is proved. (¶17, ¶19)
Code of Civil Procedure, 1908 — Order 37 — Execution disputed — Limitation —
Held further: A summary suit does not lie where the drawer disputes execution; limitation runs three years from execution where it is admitted, and from the original cause of action where it is disputed and unproved. (¶15)
Hand loan — Wherewithal questioned — Onus on the lender —
Held further: Where a hand loan is denied and the lender's capacity is questioned, the onus lies on him to prove that he had the wherewithal to advance the sum. Appeal dismissed. (¶20, ¶21, ¶22)
In the Court's own words
Paragraph 13It is important to remember that in those cases, the admissibility of promissory notes was challenged on the ground of stamping. A cheque cannot be treated on par with a promissory note though both are negotiable instruments. Statute defines them distinctly. The Indian Stamp Act contained definitions of bills of exchange, cheque and promissory notes originally and rendered them liable to be stamped. Vide Central Act V of 1927, the cheques were no longer liable to be stamped. In other words, stamping is a requirement for promissory notes and bills of exchange but not for cheques. Therefore, the Full Bench decisions rendered in the context of promissory notes will have to be understood appropriately in the case of cheques in the context of Section 64 of the N.I Act. No drawer of a cheque can plead that the instrument contains the terms of the agreement between the parties and that since it is inadmissible, the payee cannot rely on the original consideration. In other words, the holder or payee of a cheque can sue the drawer of the cheque on the basis of the original consideration even without presenting the same to the drawee. The original debt does not get extinguished on account of the issuance of the cheque. In fact, Section 139 of the N.I Act mandates that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque for the discharge, in whole or in part of any debt or other liability. Section 138 of the Act which penalises dishonour of cheque states that the offence will be attracted where the cheque is issued for the discharge, in whole or in part, of any debt or other liability. The explanation to the Section states that “debt or other liability” means a legally enforceable debt or other liability. If the debt had already been extinguished, it is not an enforceable debt. Therefore, on an overall consideration of the statutory scheme, one can conclude that issuance of cheque will not extinguish the liability. Only when it is encashed, the liability will be correspondingly extinguished. Thus, cheques stand on a different footing altogether.
Acts & Sections
s.64 Negotiable Instruments Act, 1881s.118 Negotiable Instruments Act, 1881s.139 Negotiable Instruments Act, 1881Order 37 Code of Civil Procedure, 1908s.73 Evidence Acts.91 Evidence Acts.35 Indian Stamp ActOne judgment a day. That's the whole habit.
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