Security Cheque U/S 138
Kapil Kumar
(Querist) 21 September 2009
This query is : Resolved
I had taken a Personal Loan but doe to some unnatural conditions, failed to give EMIs... Banks has filed a case under section 138, they have presented a security cheque into the bank and it was bounced due to insufficient funds...though I have written clearly on the back side of the instrument that it is only for security purpose and not to be presented for payment...somebody told me that there is a Supreme Court ruling that Security cheques cannot be presented for payment and hence does not come under sec 138. Kindly advice as I have a hearing soon.What all remedies I have in this regards as bank is not coming for settlement either.. and I dnt have money to settle as of now..atleast not for next 6 months.Please guide and help me sir as I am jobless at the momentriven
Guest
(Expert) 21 September 2009
NANDKUMAR B.SAWANT.M.COM.LL.B.(MUMBAI),ADVOCATE
MOBILE 09325226691, 09271971251
e.mail.adv.nbsawant@yahoo.co.in
e.mail.nandkumarbs@sify.com
REGARDING THE SECURITY CHEQUES KINDLY NOTE THAT
1.FIRST OF ALL DO NOT GET SCARED OF CASE UNDER SEC.138 OF N.I.ACT .IT IS A BAILABLE OFFENCE AND EVEN AFTER JUDGEMENT ONE CAN FILE APPEAL AT DISTRICT COURT AND GET BAIL IMMEDIATELY BY ADMITING THE APPEAL.
2.KINDLY NOTE THAT CHEQUES ISSUED AS SECURITY THOUGH PRESENTED BY WRITING NAME DATE AND AMOUNT ON THE CHEQUE BY THE COMPLAINENT ,YOU CAN TAKE DEFENCE THAT IT IS NOT VOLUNTARILY ISSUED AND NO LEGALY ENFORCEABLE DEBT IS THERE.
3.KINDLY NOTE THAT YOU CAN PROLONG THE MATTER BY SUBMITING DISCHARGE APPLICATION, HANDWRITING EXPERTS OPENION ON VERIFYING THE HANDWRITING ON THE CHEQUE AND BY OTHER TACTICS.
4.AN EXPERT LAWYER CAN PROLONG THE MATTER AS PER YOUR CONVENIENCE PLEASE NOTE.
IN CASE YOU NEED ANY FURTHER INFORMATION YOU MAY SEND THE EXACT DETAILS.
WITH BEST REGARDS TO YOU YOUR FAMILY AND FRIENDS.
YOURS SINCERELY
NANDKUMAR B.SAWANT.M.COM.LL.B.(MUMBAI), ADVOCATE.riven
Kapil Kumar
(Querist) 21 September 2009
Thanks sir for the reply...In my last hearing Judge has get a letter signed by me that the cheque is issues by me,he has give next date on the basis of Legal notice not being recieved by me.
The Judge (M.M) is givng dates for just a week and also saying that he will dispose the matter in the 3 months from the first hearing..my next date is on 13th Oct and my first hearing was on 4th Aug 2009. I am very worried sir as I do not have money to settle down and if Judges dispose it off then most probably it will go in favor of the bank.riven
PJANARDHANA REDDY
(Expert) 21 September 2009
DO NOT PANIC 138 IS AMNDED TO INCULCATE GOOD BANKING PRACTICES, NOT TO PUNISH THE INNOCENTS OF U. The main object of the section 138 of the said act is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments.THE FRIEND IS SOME WHAT CORRECT, HOWEVER LET ME KNOW THE CHQ AMOUNT,STAGE OF CASE I.E EXAMINATION,CHIEF FILED,EVIDENCES,310,313,ARGUMNTS,ETC.,
riven
adv. rajeev ( rajoo )
(Expert) 21 September 2009
Dear Kapil,
U have got good case. U have clearly written on back of the cheque, ur intention is clear, in my opinion it does not come under sec 138 of NI Act, u have to take much strain.riven
Sachin Bhatia
(Expert) 21 September 2009
You have bright chances to defend the case as it is clearly written on back side of the cheque that it is only for security purpose.riven
Kapil Kumar
(Querist) 21 September 2009
thanks to you all gentle man for replying and giving me support..can you also let me know if there is any Supreme Court ruling on this that Security cheques cannot be presented for payment and hence no case can be filed on base of them.riven
Raj Kumar Makkad
(Expert) 21 September 2009
Sorry I am not convinced with the views expressed by my learned friends. Even cheque issued agaist security, if bounced attracts section 138 NI Act as held by Hon'ble Apex Court in a similar case:
Cheques given as security – not valid. Dishonour of cheques given as security towards loan would attract Sec. 138 NIA. 1999 (3) CTC 143.riven
Bhumik Dave
(Expert) 22 September 2009
Yes I agreed with mr. Raj. because the check issued for security and when the emi is not paid. The bank has deposited check for its security so the check is return with in sufficient bellence hence this case is considered as 138 of n.i. Act.riven
Adinath@Avinash Patil
(Expert) 22 September 2009
Dear kapil,
Your case is best & your defence of security is also best.Be confindat,go ahead you will succeed.riven
Kapil Kumar
(Querist) 22 September 2009
Hi My Learned advisors, I am confused as some of you are saying that the case is in my favor where as some gentleman (Mr Makkad and Mr Dave( has a diff opinion.is law different for each lawyer...I would like to have your expert guidance on what remedies I have to defend the case and prolong it so that I can collect the amount to settle it.Is it possible to request the judges to make an EMI of 500-1000 Rs per month for this case to settle down as I cannot give a LumpSum .The Cheque amount is 64,000riven
Adinath@Avinash Patil
(Expert) 22 September 2009
DEar Kapil;
No, you can't request for EMI of Rs.500-1000 whatever may be because your case is not for recovery suit it is criminal case for punishment there is no qustion of granting EMI.
If you are not interested taking risk ask your client to approach complaint Bank and ask them to compermise and fix terms and pay EMI amount then Bank/complainant may withdrw his case.
In my opnion your client endosed the cheque for security hence you have best case be possitive & fiht the case If you have not succeed you can file appeal there also you may compermise you case.riven
H. S. Thukral
(Expert) 29 September 2009
The cheque given as a security if dishonoured on account of insufficient funds would attract section 138 of NIA. There exists legally enforceable liability on this cheque. I would like to refer to a judgement of SC in the matter of Icds Limited v Beena Shabeer and Another. 2002 AIR(SC) 3014. Cheques given as voluntary donations etc may not create any criminal liability but a cheque given a security shall be meaningless if it is only a useless piece of paper, creating no liability.
As to your inability to make payment immediately my ld. friends herein have suggested you good advocacy methods to prolong the litigation. You can use them. My advice is to settle with the bank. The banks nowadays are quick to respond to such overtures. You can bargain on penal interest etc. Best wishes and follow the saying in Hindi which in english would be spread your feet according to your linens.
