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Author :
laxmanram
Posted On 12 November 2011 at 12:02
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Can a cheque still well within 6 months returned by bank with endorsement" account closed", be represented again for collection if no notice could be sent earlier to strike a fresh cause of action.??
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Expert :
Devajyoti Barman
Posted On 12 November 2011 at 12:12
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Since the account itself is closed, the cheque can not be presented again.
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Author :
laxmanram
Posted On 12 November 2011 at 12:27
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Thank you Mr. Barman!
I just take interest in these topics out of my own interest by reading questions and answers on this site.
I do not hence ask too much questions as others do.
just before my question i saw two conflicting opinions of experts on this topic.
While expert prabhakar singh has stated in your terms.Advocate,Mr. Auruna Giri has stated 'IT CAN BE'
So i got confused.
I shall feel obliged if other experts also speak on this topic.
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Expert :
Nadeem Qureshi 9953809956
Posted On 12 November 2011 at 12:34
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Dear Laxmanram
in a case Muzahir Husain v/s State of UP 2009 Cri LJ 154 ALL
the hon'ble High Court held that
the cheque can be sent any number of times to the bank for payment during the period of its validity and the limitation period shall start to run from the date to last dishonour.
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Expert :
sankar narayanan
Posted On 12 November 2011 at 12:39
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you cant represent bcz account is already closed.
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Expert :
Nadeem Qureshi 9953809956
Posted On 12 November 2011 at 12:39
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in sadanandan Bhadran v/s Mahadavan sunil kumar 1999 1 bank crl 263 (SC) held
that a cheque can be presented any number of times during the period of its validity.
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Expert :
prabhakar singh
Posted On 12 November 2011 at 12:53
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@Mr.Nadeem!
I would not like to dispute what you have so far stated in your two replies even if you have no judgement to support you.
But certainly i shall be enlightened if kindly post a specific case where cheque could be presented twice by the payee or holder in due course to whom it is well known from very first presentation that the "account is closed"!!!
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Expert :
ajay sethi
Posted On 12 November 2011 at 12:57
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it is true cheque can be presented any number of times but if cheque is returned with remarks account closed and the payee is fully aware of the fact then no fresh presentation can be made .
thre is no specific case law on said subject
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Expert :
prabhakar singh
Posted On 12 November 2011 at 13:10
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Mr. Sethi says there is no specific case law on the subject who is most reliable and dependable hand for me when it comes to case law.
Then if any body subscribe my view or not i opine that in such a qualified circumstance the representation would be deemed to be a deliberate activity of the payee or the holder in due course to suspend a cause of action that has started to run which jurisprudence of limitation does not allow,
then unless this very aspect of jurisprudence get changed by jurist my opinion would continue to prevail ultimately unless any judgement is not passed in haste by any court and counsels
arguing either side are found competent to argue aspects i am putting forward here.
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Expert :
PS Dhingra, dcgroup1962@gmail.
Posted On 12 November 2011 at 14:22
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Dear Laxman,
First of all, the case of account closed does not fall within the scope of Sec.138 NI Act.
2ndly, although there is no bar on cheque being presented more than once, BUT there is no logic of presenting cheque again and again when the bank has already informed through cheque return memo that the account is closed.
However, if you have already missed the bus of serving notice in prescribed period to the drawer of the cheque, there is no harm in presenting the cheque again to get a fresh cheque return memo.
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Expert :
Advocate Rajiv Mishra
Posted On 12 November 2011 at 14:25
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Present the cheque again & forget previous dishonour.
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Expert :
PS Dhingra, dcgroup1962@gmail.
Posted On 12 November 2011 at 14:35
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Dear Nadeem,
The case law cited by you relates to the case of bouncing of cheque due to insufficient fund, NOT on account of closure of account. The present case of the querist also does not fall within the scope of section 138 of NI Act.
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Expert :
prabhakar singh
Posted On 12 November 2011 at 15:05
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lost by sense is called.......
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Expert :
Advocate Bhartesh goyal
Posted On 12 November 2011 at 20:45
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I do agree with the views expressed by Mr Sethi and Mr Dhingra.
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Expert :
Advocate. Arunagiri
Posted On 12 November 2011 at 22:38
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I refer to a SC judgement in this situation, 1999 AIR 1952, The SC had held that
"Hence, when the cheque is returned by a bank with an
endorsement account closed, it would amount to returning
the cheque unpaid because the amount of money standing to
the credit of that account is insufficient to honour the
cheque as envisaged in Section 138 of the Act."
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Expert :
Shailesh Kr. Shah
Posted On 13 November 2011 at 11:34
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Shri Arunagiri has solved query upto one extent.
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Expert :
prabhakar singh
Posted On 13 November 2011 at 11:45
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This judgement is certainly helpful to
those minds who so far have been, without
it, confused that no offence would get constituted
or committed if a cheque returns with endorsement"a/c closed". Because of their misunderstanding that"The
expression the amount of money standing to the credit of that account is insufficient to honour the cheque is a GENUS of which the expression that account being closed is SPECIE."
The point in issue under discussion here
is that can like any other cheque a cheque
returned with endorsement "A/c closed"
can also be represented again and again
till 6 months validity period just to postpone
the cause of action that arose on its very first presentation ,while it is well known to the payee/holder from very first presentation that a cheque with a/c closed shall get returned as of certainty,no matter how many times the same is presented.
When a cheque returns for "insufficient funds"there is possibility that when it is presented next time,the Drawer may arrange
the payment in the account while in case of cheque returned for "a/c closed"no such hope can ever be anticipated.
Hence things are not at par in these two distinct circumstances is my submission which requires attention and not out right throwing which many
of us are trying to do.
In past too i have expressed that it is not possible for me to write always the whole of logic i may have in my mind behind any answer i propose to give,yet a few here,who look to be temporizers hastily starts
some thing they are never sure of and they take stand too,okay, tolerable,but even they start confronting without invitation and do not shut their shutters.
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Expert :
Advocate. Arunagiri
Posted On 13 November 2011 at 14:37
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Even though it does not make any sense, but, representing the cheque, even after knowing the account is closed, will give a new cause of action.
As the author had said he had not sent the legal notice in time, just to create a cause of action, I suggest to represent the cheque.
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Expert :
RAJU O.F.,
Posted On 13 November 2011 at 16:14
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Re-presentation of the cheque after drawer's account closed, may get some threatening value against the drawer of the cheque for payment of money from him. You may prefer cheating complaint against him.
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Expert :
Devajyoti Barman
Posted On 13 November 2011 at 23:11
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Yes , right.
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Expert :
Jebaraj Jasper Jacob
Posted On 13 November 2011 at 23:20
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Cause of action for filing a complaint U/s.138 of N.I Act arises only when a statutory notice has been issued under the provisions of the N.I.Act. Hence a cheque can represented as many times for collection with its validity irrespective of the fact that whether it has been returned for the reason that account closed. However before representing the cheque ensure about the validity period because as per the latest guidelines of the Reserve Bank of India the validity period has been reduced to three months. Otherwise the best possible option is just forgot about the presentation of the cheque for collection in the earlier instance and present the cheque for collection again and issue notice under the provisons of N.I Act by suppressing the earlier presentation of the cheque for collection.
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