Cheque expired because of bank delay? What the Court held

It can be the bank's fault. In Canara Bank v. Kavita Chowdhary (2026 INSC 363, decided 15 April 2026) the Supreme Court held that a bank receiving cheques for collection “acts as an agent of the customer and is under an obligation to exercise due diligence in presenting the instruments within the prescribed validity period”, and that letting a cheque go stale “in the absence of any reasonable explanation” is deficiency in service. The remedy upheld was compensation before a consumer commission, fixed on the facts of that case.

As reported by LiveLaw on 16 April 2026 and SCC Online on 17 April 2026, the Supreme Court held on 15 April 2026 that a bank's failure to present a cheque within its validity period, without a reasonable explanation, amounts to deficiency in service under the Consumer Protection Act. This guide reads the judgment itself and adds only what it changes. For the Section 138 notice and complaint timeline, see Cheque Bounced? Section 138 Is Faster Than You Think.

What happened in the case

The National Consumer Disputes Redressal Commission allowed the customer's complaints on 24 September 2024 and the bank appealed (paras 2, 3).

What the Supreme Court held

• The duty. Failure to present in time “resulting in the instrument becoming stale, in the absence of any reasonable explanation, would result in negligence in the discharge of banking duties which would constitute deficiency in rendering service within the meaning of the consumer protection law” (para 59).
• The strike. The Court accepted that “the employees of the bank were on strike on 30.05.2018 and 31.05.2018”, but found “there is no explanation at all, not to speak of any reasonable explanation, as to why the two cheques of the respondent were not represented by the appellant before the drawer's bank on 01.06.2018 and 02.06.2018” (paras 54, 58).
• Delay and reasonable time. As the judgment sets out the Negotiable Instruments Act, 1881, Section 75A excuses a delay caused by circumstances beyond the holder's control, but “the moment the cause of delay ceases to operate, presentment must be made within a reasonable time”, and public holidays are excluded in calculating that time (paras 36, 56).
• A finding of fact. The deficiency finding was “a finding of fact based on pleadings and evidence” with no “patent error or perversity” shown (para 60). It is not a rule that every delay makes a bank liable.

What the Court said about compensation

The Commission had awarded 10 percent of the total cheque amount with 8 percent interest. The Court called that amount “on the higher side” because “the loss itself is indeterminate despite the finding of deficiency in service” (para 71). It assessed compensation at 6 percent of Rs 1,06,10,768 to each of the complainants with interest at 6 percent per annum from the date of the complaints (para 72),.

On the loss, the Court noted that even if the cheques had been presented in time and dishonoured, “that would not have ipso facto led to commission of an offence under Section 138 of the NI Act”, since the other conditions had still to be completed, and the outcome of a complaint was “within the realm of imponderability” (para 69). It also recorded that “the sine qua non for entitlement of compensation is proof of loss or injury suffered by the consumer due to negligence of the service provider” (para 66).

What this means for an ordinary person

• Know the validity date. Proviso (a) to Section 138, as the judgment describes it, requires presentation to the bank “within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier” (para 37). A stale cheque cuts off the Section 138 route at its first step.
• Re-presentation inside validity is allowed. The judgment records that the holder or payee “has the right to present the same any number of times for encashment during the period of its validity” (para 50.1).
• Section 138 has three conditions. Presentation in time, a written demand within 30 days of learning of the return, and non-payment within 15 days of that notice (para 67). The bank's role here concerned only the first. A UPI payment has no cheque to present: see Bounced Cheque vs Failed UPI Payment: Very Different Legal Remedies.

If your cheque went stale with the bank: what to do

1. Write down the dates. The date on the cheque, the date you deposited it, the last day of validity, and the date and reason on every return memo.
2. Ask the bank in writing for the return memos and the dates it presented and re-presented the cheque. The central question in the case was why a cheque was not re-presented on the working days left.
3. Complain in writing. The Consumer Protection Act, 2019 defines a complaint as “any allegation in writing” (section 2(6)). Deficiency includes “any act of negligence or omission or commission by such person which causes loss or injury to the consumer” (section 2(11)) and service includes banking (section 2(42)). The case itself arose under the 1986 Act (paras 40, 41).
4. Record your loss. Keep what the cheque was for and whether the drawer remains liable, since proof of loss or injury is what the Court called the “sine qua non” (para 66).
5. File before the consumer commission in time. A complaint about a service provided may be filed with a District Commission, and may be filed electronically (section 35(1)). It is not admitted unless filed within two years of the cause of action, subject to a sufficient-cause exception recorded in reasons (section 69). Section 39(1)(d) lets the District Commission direct compensation for loss or injury due to the opposite party's negligence. This case came up from the National Commission; which commission suits a smaller claim is not covered here. No outcome is promised. For the commission route in general, see Got a Defective Product or Bad Service? Filing a Consumer Complaint Without a Lawyer.

Sources

• Canara Bank v. Kavita Chowdhary, Civil Appeal Nos. 2587 and 2588 of 2025, 2026 INSC 363, judgment of 15 April 2026, Supreme Court of India.
• Consumer Protection Act, 2019, Gazette of India, 9 August 2019.
• LiveLaw, 16 April 2026.
• SCC Online, 17 April 2026.

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