SEC 138 NI Act / cr 405 of 420

Querist : Anonymous (Querist) 26 October 2010 This query is : Resolved
A is working for Company B since last 30 months.
A is granted a loan to be repaid in 30 monthly installments - one installments for each monoth.
Revised verbal agreement for increase in remuneration.
A get hospitalised to to heavy work pressure, nut instead of helping him Comapany B stops his due payments in lieu of remuneration / perks entitled by him
A refuses to pay balance loan till his due payments are released.
Agreements arrived at after exchange of claims and counterclaims and cheques exchanged. Comapny B giving cheuqes in lieu of debts towards A and collecting cheques from A in lieu of balance loan by hastened installemnts for repayments of loan in 20 months, instead of 30 months.
B encashed cheques issued by A, and at the same time dishonetly stops payment of cheques issued to A.
A initiates procedure to file case us 420 and also u/s 138 NI Act - as B failed to honour the cheques issued.
A also instructs his bank to stop payment of PDC cheques of balance of loan - as they can not be considered debt - till his due payments are received from B.
Questions are
1. Can A succeed in his case against B u/s 138 (keeping in view that he has stopped payments of his legal dues after dishonour of these cheques)?
2. Can A File a suit under 405 - 420 as he was dishonetly induced to believe that he will receive his payments enabling him to make hastened payments of his loan installments?
If B files a case against A for PDC cheques - Can A make a representation that these payments will become payable - only after B pay his dues?
- based on similarity that Bank can't file the case against defaulter - if Vehicle is returned with valuation exceeding the balance loan.

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Devajyoti Barman (Expert) 26 October 2010
1. Yes. The onus is upon B to prove that the cheques were not issued in discharge of any debt.
2/ Yes at least worth trying.
3. No there is no such provision in a proceeding u/s 138 of NI Act. The example is not applicable here.

Querist : Anonymous (Querist) 26 October 2010
Whatdo you say about the following
Accused successfully rebutting presumptions at initial stage – proceedings can be quashed at thresh hold. 2002 Crl.L.J.3469 Guj.
A can always present that when cheque which was acutally a promissory note become cheque payable as on a particular date of cheque - but the money was not due - as explanation was already sent to Payee in advance from c
such date - informing him not to present cheque