Dishonour of Cheque--Merger of Bank--Cheque returned Due to Insufficiency of Funds After Drawee Bank Merger -- Section 138 NI Act is Attracted
Under clause (a) of the proviso to Section 138 of the Negotiable Instruments Act, 1881, a cheque must be presented within six months or within its validity period, whichever is earlier. Where a drawee bank ceases to exist due to merger or acquisition, the expression "within the period of its validity" cannot be construed rigidly.
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