N.i. 138
Querist :
Anonymous
(Querist) 07 December 2011
This query is : Resolved
Dear Members,
I have started business with one of my friends in partenership in May-2008. We have to takeover a franchisee store, we came to mutual understanding with the existing owner of the franchisee to stay connected with the business for a trial period of Six months. We have issued a cheque of Rs. 6.5 Lakh as a security (Not mentioned on the cheque) to takeover the business from the owner of the business. In lieu of the valuation (Rs. 6.5 Lakh) of the business we agreed upon to pay the liabilities of the business i.e. Elec. Bill, Staff Exp., Rent (16000/-), Interest of the valuation of Rs. 6.5 lakh (rs. 16000/-) etc. will be paid by us in due period. We have sucessfully run the said business and added business to the existing, and also paid all the expenses of the same as per our commitments.
The shop was on rent, After 5 months the owner of the said shop denied us to continue the business and refused to let the shop to us. A dispute was arise & I have decided to discontinue the business and left the shop to my friend (Partner). And i have demanded the cheque of Rs. 6.5 Lakh from the owner of the business. but he told me that he has misplaced the cheque. The cheque was dated as of 31st October 2008. So, i have decided to stop payment of the cheque, on 14 Oct. i have stopped the payment by using my netbanking mails. But on the 21st of Oct. i have got a msg. from bank that the cheque is bounced in my account. After repeating requests the person not returned the bounced cheque to me. Then i have ignored the matter.
But in January 2009, without any notice from the complainant, i've got summons directely from KKD. Court to appear before the court. And i have to appear and got bail from the court. And the case was registered agst. in N.I.-138. He has shown in his complaint that he has lended me Rs. 6.5 Lakh in cash and i've issued the same cheque in lieu of that money in guarnatee of the two of common friends of our both, whom i don't know as of now. He has not mentioned about our business deals to the court. Since then our case is continue with appx. 12 hearings in the case. But on the most of hearings the complainant was not came in the court. But in cross examination he has accepted that we both have the business relations of material (Supplier & Seller) and the all the material and machines of the business are with him.
And can I get the benefit of stop payment of the cheque that the cheque has lost by the party and the Bank memo is showing "Payment Stopped by the Drawer'. I want you to please suggest me the future proceedings of my case.
Guest
(Expert) 07 December 2011
If the concerned party has already agreed that all the materials and machines are in his own custody no liability rests on you, as he failed to deliver the same to you. According to that nothing becomes due to him on account of non-performance of the agreement on his part.
Moreover, "stop payment" does not come within the purview of sec.138, which is meant for the cases of insufficiency of funds in the account. If funds were existing in your account, you can take advantage of the memo of "payment stopped." However, the court can ask you why proper notice was not given to the party before stop payment instructions. Better your advocate should seek dismissal of case on the ground of non-applicability of the sec.138 to the case.
V R SHROFF
(Expert) 07 December 2011
"Stop Payment" amounts to dishonour of cheque and attracts sec 138 of N.I.Act.
If you had mentioned the reason of stop payment to bank, or drawer, or Police, it will help you, otherwise not.
10-7-2009 KERALA HIGH COURT Narayanan Vs St Of Kerala cr. Rev pet 840/01 decided 10-7-2009
Querist :
Anonymous
(Querist) 08 December 2011
Dear Sir,
Thanks for your expert comments.
Sir, I would like to share some more facts of this case with all of you. When we have finalized this business deal in presence of the two company representatives, complainant and both of us partners, When we have valuated all the raw materials & machines, fixtures of Rs. 6.5 lakhs. We all signed on the page of a diary, which is with us. Except this we have all the bill books of that period we stayed there with signs of both of us. We have all the receipts of the banks thru. we have made payments of rent & Elec. Bills, Phone bills & rent deposited in his a/c. He has also issued us a no objection certificate on his letterhead to transfer all the phone nos. of the business in our name. Now in court he says that we had a relation of raw materials suppliers & buyer. If a person who is selling goods to a business will also made his bills for 5 months regularly.
If these all documents makes ground for the co-relation of the said cheque was issued in the business deal, not in money lending as the case is registered by the complainant?
If the Hon’ble court will see all the facts of the case & will try to establish the connection that cheque issued for the business deal and as he committed that all the material of the business is with the complainant, and the deal was not finalized for the cheque was issued then the liability of the accused lapse?
If the court establish the connection and satisfy with the documents then the allegation for lending money framed by the complainant are found false itself?
Querist :
Anonymous
(Querist) 15 December 2011
Dear Sir,
Thanks for your expert comments.
Sir, I would like to share some more facts of this case with all of you. When we have finalized this business deal in presence of the two company representatives, complainant and both of us partners, When we have valuated all the raw materials & machines, fixtures of Rs. 6.5 lakhs. We all signed on the page of a diary, which is with us. Except this we have all the bill books of that period we stayed there with signs of both of us. We have all the receipts of the banks thru. we have made payments of rent & Elec. Bills, Phone bills & rent deposited in his a/c. He has also issued us a no objection certificate on his letterhead to transfer all the phone nos. of the business in our name. Now in court he says that we had a relation of raw materials suppliers & buyer. If a person who is selling goods to a business will also made his bills for 5 months regularly.
If these all documents makes ground for the co-relation of the said cheque was issued in the business deal, not in money lending as the case is registered by the complainant?
If the Hon’ble court will see all the facts of the case & will try to establish the connection that cheque issued for the business deal and as he committed that all the material of the business is with the complainant, and the deal was not finalized for the cheque was issued then the liability of the accused lapse?
If the court establish the connection and satisfy with the documents then the allegation for lending money framed by the complainant are found false itself?
