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Author :
Member (Account Deleted)
Posted On 07 August 2012 at 20:34
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Seeks your valuable advice on the matter related to incomplete signature on cheque. As per resolution submitted to bank, there are two signatories of the company and any instrument is to be honoured by the bank if both signatories sign the cheque. But a cheque with single signature was presented to the bank and by oversight( as I feel) returned the cheque with remarks on advice-insufficient funds. The same instrument has been used to file a case u/s 138. Can the case be defended taking plea that signature is incomplete and it's bank mistake that instead of remark of incomplete signature on advice, returned the cheque with a remark of insufficient fund.
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Expert :
ajay sethi
Posted On 07 August 2012 at 21:43
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the cheque has been returned with endorsement insufficent funds . if it was a genuine mistake as suggested by you the payment oculd have been made after issue of notice within period of 15 days . the fact that no payment has been made inspite of sufficent notice is enough to fasten liabilty on the company / directors .
of course complainant would have to prove there is debt due and pyable . but you cannot escape liablity on the grounds that it was bank mistake
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Author :
Member (Account Deleted)
Posted On 07 August 2012 at 22:30
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Dear Mr. Sethi. I agree with you. But the fact is that there is no actual debt due and payable. The instrument is being misused by the party. Looking into aspect of case being filed u/s 138, can it be defended on the ground that it does not full fill the criteria for the case to be admitted u/s 138. Can we request the honourable court to ask complainant to file civil suite for recovery....
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Expert :
ajay sethi
Posted On 07 August 2012 at 22:38
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you have to defend the case . prove there is no debt due and payable
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Author :
Member (Account Deleted)
Posted On 07 August 2012 at 22:56
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Thanks for your advice Mr. Sethi...
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Expert :
RAJU O.F.,
Posted On 08 August 2012 at 18:21
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If you could produce evidence of having sufficient funds in the a/c on the date of presentation of cheque, the proceedings u/S138 will fail.
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Author :
Member (Account Deleted)
Posted On 08 August 2012 at 18:48
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Dear Mr. Raju, The cheque was returned with endorsement of insufficient fund. If there would have been sufficient fund, the bank would not have endorsed insufficient fund.
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Expert :
RAJU O.F.,
Posted On 09 August 2012 at 18:18
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Even now you did not confirm as to whether there was sufficient fund in the a/c when the cheque was presented. If there was no sufficient funds in the a/c, in addition to joint signature was not affixed, the bank is justified in endore the cheque-return memo with 'insufficient funds' and if so you are liable. The other side may also argue that in order to get the cheque returned unpaid purposely you did not get the joint signature.
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Author :
Member (Account Deleted)
Posted On 09 August 2012 at 19:19
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No, there was no sufficient fund in the account. But actually there is no any debt to be paid to the complainant . He has just misused the instrument which was given to him for some other purpose..... Your point is right that the other party may argue that it was purposely done. I just want a remedy to quash this 138 case and ready to face civil proceedings as there is no actual debt to be paid to the party....
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Expert :
Adv. Vikas Surve
Posted On 12 August 2012 at 10:01
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to make out yr case you have to answer a question that how yr cheque has gone into the custody of the complainant. Court may presume that you have issued cheque in discharge of debt. So you have to rebute the presumption that is U/S 139 of N I act.
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Expert :
prabhakar singh
Posted On 12 August 2012 at 10:26
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Agree only with Mr. Sethi.
You can defend only on the ground that the cheque was not issued for discharging any subsisting recoverable liability.You do not have any right to suggest what action your opponent should take against you,that is his option and he or court is not bound to oblige
your suggestions.
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