Cases of cheque bounce are not uncommon in the courts. Legal experts are of the view a majority of cases fought pertain to cheque bounce under the Negotiable Instruments Act. In this regard, it would be interesting to take note of two very interesting aspects pertaining to cases relating to cheque bounce. An accused whose cheque was dishonoured contended that the cheques issued were blank ones. He also said that a case of cheque bounce cannot be slapped against him if the cheque is given to a party as a security for repayment of a loan. Justice K Sreedhar Rao in his order stated that both points raised by the accused could not be sustained and would attract the provisions under the Negotiable Instruments Act.
Case at a glance:
A lady had borrowed a sum of Rs 75,000 in connection with some personal business. A blank cheque was issued as security. However the cheque was returned for want of sufficient funds, followed which a complaint had been filed. The accused stated before the court that no prosecution under Section 138 of the NI Act can lie in this case. The trial court dismissed the complaint against the accused following which the High Court was moved.
The Verdict: Justice Rao observed, " The dismissal of the complaint on the plea that the cheque was issued only as a security and therefore no prosecution would lie, is an untenable view. A cheque whether issued for repayment of a loan or as a security makes little difference under Section 138 of the NI Act. In the event of a dishonour, legal consequences are same without distinction. When once a cheque is issued and the same is proved, a presumption under Section 139 of the NI Act would arise with regard to consideration."
Legal view:K M Natraj says once a cheque is issued there is a presumption under the NI Act that the cheque has been issued towards the discharge of a legally enforceable debt. It is a rebuttable presumption. The accused can rebutt that presumption and the burden is on him to dislodge that presumption
4 comments:
IF a Pvt. Ltd. company has been ordered to be wound up by the High Court, can the 138 NI cases against the Directors be quashed?
Dear Sir/Madam,
i have a cheque bounce case in progress.Same cheque i had deposited as a security to my then employer agaist a loan.total loan amount i had deducted at the time of leaving the company.But rather to submit me the cheque,employer presented it to the bank result to the dishounered.
The case is still to reach at it's evidence level.Now the company has submitted an application that the original cheque has misplaced and ask to consider it's photocopy as a evidence.
Please answer what are the possibilities for me?
Thanks,
Dear Sir,
Actually i had some business deal with 1 person with proper notarised agreement, but due to delay in fulfilling stated terms & condition, mutually we decided to leave the business but i have expended approx 1.5 lacs for renovation and as an advance.
So the opposition given a pdc cheque of Rs. 100000 (mutually agreed) with proper notarised court agreement as a final settlement ... but when i submitted it on the bank for clearance, it gets dishonored...& as of now he is not ready to give money.
Now kindly suggest me for further steps... & please mention how strong my case is????
kindly revert on "abhishek15456@gmail.com".
Waiting for your kind response.
Thanks & Regards,
Abhishek
abhishek15456@gmail.com
My mom had borrowed rs200000 money from a lady in 2006 and given two cheques amount 100000 each as a security. Later My mom returned 70000 to that lady. But, due to delay in returning the remaining money, the lady produced the chq in bank and filed a case in 2007, under section 138,142 against my mom. The case is dismissed by the district court in sep 2013, since the complainant not attended the hearing. Now, she is negotiating with me for Rs1,75,000 which i am ready to pay. But, She says, the cheqs are in the court. So what do I do?. How do I finish this deal?
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