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(Guest)

Dishonour of cheque?

kindly suggest me a remedy 

A  took a loan from B and later B issued him cheques for repayment of loan. before the presentation of cheque to the bank the issuer dies. when A goes to bank he is declined the money since the bank has the knowledge that B has died.

what remedy does A have to realise his money??can the cheque be said to be dishonoured under section 138 NIA?? can he sue the legal heirs of B for the money?



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 3 Replies

Sanjeev Kuchhal (Publishers)     28 February 2011

Negotiable Instruments Act, 1881 _ Section 138, 142 _ Code of Criminal Procedure, 1973 _ Section 204, 482 _ Dishonour of cheque _ Death of drawer _ Issuance of process against legal heirs _ Legality of.
Dishonour of cheque issued by one Hiralal _ Notice returned with an endorsement that Hiralal had expired _ Complaint alleging offence u/s 138 cannot be filed against the legal representatives of the person who had issued the cheque _ Process issued by the Magistrate against the applicants were without jurisdiction and abuse of the process of Court _ Considering absolutely untenable prosecution was launched by non-applicant no.1 the Applicants are awarded compensation of Rs.5000/-. (See para 4, 5, 7)
Held : a) "Upon the admitted facts which are stated above it is clear that filing of the complaint by the non-applicant no.1 as well as issuance of the process by the Magistrate is nothing but abuse of the process of the Court. On a plain reading of Section 138 of the Negotiable of Instruments Act it is clear that the proceedings under the complaint alleging offence under section 138 of the Act cannot be filed against the legal representatives of the person who had issued the cheque." (Para 4).
b) "Needless to mention that the issuance of the process in Criminal Case against the accused is a serious matter touching the liberty of the person against whom the offence is alleged." (Para 4).
c) "In view of the above discussion, I hold that the Criminal Case filed by the non-applicant no.1 and the process issued by the Magistrate against the applicants were without jurisdiction and abuse of the process of the court. Therefore, the proceedings in Criminal Complaint Case No.2109/2004 pending before the Judicial Magistrate, First Class, Gondia and the process issued by the Magistrate are quashed." (Para 5).
Result : Application allowed.
Savita wd/o Hiralal Sorle & ors. Vs. Rajesh Damodar Sarode & anr. CRIMINAL APPLICATION NO.1597 OF 2005 (23-2-2006) (NAGPUR BENCH) (A.P. LAVANDE, J.) (Reported in 2006 (6) LJSOFT 84)

Ayush (Advocate)     28 February 2011

You can definitely not file any complaint under section 138 of Negotiable Instrumetns ACt. However, you have the option to recover the money by way of proceedings under civil court. You may file a suit for recovery against the legal heirs of the deceased person.

Sanjeev Kuchhal (Publishers)     01 March 2011

Yes, suit for recovery against the legal heirs of the deceased person, however to the extent of the property inherited.

Legal representative is the person who received some benefit from the estate of the deceased. Legal representative can be made liable for loan of deceased only to the extent or in proportion of the estate received by him.  They are not bound to satisfy the debt from out of their self-acquired or separate property.


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