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Cheque Bounce case

(Querist) 10 October 2010 This query is : Resolved 
"X" borrowed an amount of 50,000/- from "A" to that effect "X" executed a promissory note. repeated demands made by "A", "X" failed to repay amount to "A".

"X" daughter is "Y". "Y" has Bank cheque book.

after repeated request made by "A". "X" issued a cheque to "A" cheque belongs to "Y"

"A" presented cheque in bank, cheque got bounced

"A" wanted to file a case

My queries:

"A" may file a case against both parties i.e "X" & "Y"

please suggest sir, with relative case laws
Rajeev kulshreshtha (Expert) 10 October 2010
You are not clearly state that who signs the cheque and what was the reason for dishonor.clear it for getting perfect advise.
K Satyanarayana (Querist) 10 October 2010
"Y" signed on cheque

Cheque dishour with a reason "Funds Insufficient"

Kindly give replies sir, i am waiting for your valuable replies.
M/s. Y-not legal services (Expert) 10 October 2010
Yes. You can file a complaint against x and y. But if you want file your case under n.i act mean you have to make involve x, and y. Same time y have to be first accused.. Because cheque is y's. Keep in mind.. They have lot of chances to break your case. The burden of proof is your's..
M/s. Y-not legal services (Expert) 10 October 2010
But whats about the promissory note. Better you may file a money suit against x. If he failed to repay the money mean you can attach his property with court's order.
Kirti Kar Tripathi (Expert) 10 October 2010
I agree with Tom,
R.Ramachandran (Expert) 10 October 2010
Even though the cheque issued by "Y" might have bounced, yet it will not be possible for you to file a case against "Y" under sec. 138 of N.I. Act, as the cheque issued by "Y" is not in discharge of any of her legally enforceable debt.
You cannot proceed with Mr. X, since he has not issued the cheque.
Raj Kumar Makkad (Expert) 10 October 2010
In the light of given facts, both X and Y are liable to be prosecuted.
K Satyanarayana (Querist) 10 October 2010
I want to show liability on both parties i mean "X" & "Y"

I am searching for citation,

Is there any citation to show liability on both parties
K Satyanarayana (Querist) 10 October 2010
Thanks to all Experts
niranjan (Expert) 10 October 2010
I am of the view of Mr. Ramji. It is better to file suit on the basis of pro note.
B K Raghavendra Rao (Expert) 10 October 2010
Y is not legally liable to pay to X and therefore cheque issued by Y does not come under the purview of NI Act. X is liable to repay the amount borrowed by him. Hence, you can proceed against him only in a Civil Court for recovery of money. The promissory note would be a document to establish the fact that X had borrowed money from you. You cannot proceed against Y in any event.
M/s. Y-not legal services (Expert) 11 October 2010
Thank you mr.tripathi
Advocate. Arunagiri (Expert) 11 October 2010
Y had signed the cheque. This cheque was issued for settling the loan of X. Then Y alone can be prosecuted under the NI Act. X cannot be prosecuted, because he has not committed any offense under the NI Act. If any bank cheque was issued and the same was filled in by A, the defense of Y can be that the blank cheque was given to A without her knowledge.
R.Ramachandran (Expert) 11 October 2010
Dear Mr. Arunagiri,
True "Y" has signed the cheque. Was it issued by him in discharge of any legally enforceable debt against him? What is the privity of contract between Mr. Y and the personto whom the cheque has been issued? How will the complainant be able to bring the case within the ambit of Sec. 138 N.I., there being no legally enforceable debt in the first place against Mr. "Y"?
Uma parameswaran (Expert) 11 October 2010
It is better to file civil suit .
Sri Vijayan.A (Expert) 11 October 2010
I agree with Mr.Arunagiri.
The cheque was issued with the knowledge and consent of the Y.
Y knows the purpose of the cheque and she has to keep the funds.
She becomes the implicit guarantor of the loan.
So this attracts the NI Act.
The limitation is 30 days from the date of intimation by the bank to the depositor of cheque.
If Y argues that the cheque was given without the knowledge of herself, the A can sue against X.
In all the above, A has chance to file civil suit.
For the quicker result, NI Act. This may make the X or Y to come for an out of court settlement
K Satyanarayana (Querist) 12 October 2010
Thank you all of you Experts,

Is there any case laws to show X & Y liable under NI Act

If you have, please provide
MANISH (Expert) 13 October 2010
Dear Mr. Satyanarayana,
There are chances that the proceedings may not survive under NI Act.
When a promissory note is there, then proceedings under Order XXXVII CPC may be initiated against X only.
Further to say, during the proceedings pending under NI Act, the limitation for filing summary suit may expire, and you may not be able to recover your money. So, it is better to file a summary suit under Order XXXVII CPC.
Advocate. Arunagiri (Expert) 06 November 2010
It is issued by Y in discharge of legally enforceable debt against X. There is a privity of contract between Mr. Y and A, just because Y had issued the cheque for a legally enforceable debt of Mr.X. By this Mr.Y is the surety of the Mr.X. Mr.Y steps in to the shoes of Mr.X. Mr.Y cannot claim his innocence, regarding the liability of Mr.X. The claim of A is legally enforceable. The complainant can bring the case within the ambit of Sec. 138 N.I.


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