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Case u/s. 138 cases

(Querist) 25 June 2008 This query is : Resolved 
X Ltd. has issued a cheque of Rs. 5.00 Lacs in favour of Y Ltd. During the course X Ltd. has paid Rs. 3.00 Lacs to Y Ltd. To recover balance amount of Rs. 2.00 Lacs Y Ltd. has deposited Cheque of Rs. 5.00 Lacs for clearance through its banker, cheque returned unpaid with remarks of STOP PAYMENT. Y Ltd. sent a legal notice to X Ltd. demanding dishonoured cheque amount and file a case u/s. 138 NI Act after expiry of notice period time. After filing of case X Ltd. given payment of Rs. 1.50 Lacs to Y ltd. Can Y Ltd. pursue the case for balance recovery.
Guest (Expert) 25 June 2008
It can, because the offence under section 138 is subsisting.
Jatin Sapra 9312223345,Delhi (Expert) 25 June 2008
As there is some other queries also on the same can read them for further clearification .In brief that 138 NI act is criminal offence though it is compoundable by the complainant.
Further clearified that under NI act the cause of action arises when the accused was unable to make the payment to the complainant even after prescribing the time limit provided by the legislature under NI Act.
In the situation or the facts u had given these things have to brought on record by way documents or by other ways at the appropriate stage of the case.You have to brought on record and prove yopur case on the court record and rrebut the presumption provided uunder 139 NI Act.
arunprakaash.m. (Expert) 26 June 2008
Even after paying the balance amount Rs.2 lakh he is laible for procecution. The cause of action still subsists. only thing you can compound the offence with the permission of the court.
Mukul Aggarwal (Expert) 26 June 2008
no he cant persue the matter becuase section says that the amount should be legally due at the time of dishonoured of cheque as you say that y ltd has already recieved the 3 lacs that means he cannot file the case u/s 138 for 5 lacs however he can file case for recovery of balance amount of Rs. 2 Lacs if he continue with 138 case than it will come out at the time of evidence stage and whole case will go off.
Srinivas.B.S.S.T (Expert) 26 June 2008
i do differ with mukul. The basic ingredient is that 138 is not for the recovery of amount but for issuance of a cheque without having suffient amount in the bank account to honour the same. Means in laymans language for issuing a cheque knowing fully well that the same will bounce/dishonour.
H. S. Thukral (Expert) 27 June 2008
I agree with Mr. Srinivas. This point has been already discussed in earlier query. Compensating the complainant out of fine imposed on the accused does not turn the offence in to a civil suit for recovery of amount. The Accused cheated the complaianant by issuing the cheque when he knew that his account had insufficient fund. The consequences of the offence can be mitigated by subsequent payments but at the discreation of the court i.e. lesser punishment or lesser fine but the complaint still would be maintainable.
Srinivas.B.S.S.T (Expert) 27 June 2008
well said Harbhajan Ji
Guest (Expert) 27 June 2008
138 is a unique section, there are various angles to it and requires a thorough understanding of facts. Difficult to make generalsied comments on this topic.
Ashutosh Choubey (Expert) 28 June 2008
Ido agree with Mukul
B.P. Bhardwaj (Querist) 28 June 2008
I also do agree with Mr. Mukul
KamalNayanSaxena (Expert) 29 June 2008
Basic requirement under section 138 NI Act is cheque must be issued towards discharge of legally enforceable debt or liability, and this avertment should be in complaint.

U/s 139 of the Act a presumtion that every cheque in respect of which a complaint is filed U/s 138 is supported by legally enforceable debt or liability shall arise unless proved to the contrary.

You have a genuine case and in my opinion if you are successful in proving your cotention the complaint may be defeated.
Srinivas.B.S.S.T (Expert) 30 June 2008
You have to observe that the payment has been made after filing the complaint. Then at the time of presenting the cheque and dishonour of the same, the debt is exisiting and the Accused failed to pay the amount even after issuance of legal notice in complaince with 138 as per the terms stipulated in the same. Then the complaint is valid even if the Accused paid full amount after filing the complaint. I once again repeat the NI Act is for issuance of cheque without having sufficient amounts to honour the same but not for recovery of amounts.

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