Business ceased & Issued cheque in firm name

Querist : Anonymous (Querist) 06 August 2011 This query is : Resolved
I paid money to a ready made shop owner 1 year ago and he issued cheque in his shop name. Before six months he ceased business and refused to return the money. He said I ceased my business and cancelled the R.C (Sales Tax Registration), further he said if you are able to prosecute on me, I am ready to face the case.

In this circumstances, Shall I prosecute on the person.

Kindly advice me.

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Advocate Rajkumarlaxman (Expert) 06 August 2011
if you have cheque which has not been deposited till today you can depoist the same and take the memo of the cheque if bounced and isuue him legal notice. you can move against him in 138 case but the very fact is true that the cheque when deposited then you have to issue him legal notice within 15 days and wait for a mnth or so and file the case. and if the date of cheque is 6 months back then the cheque is of no use and its validity is over you caqnoot move 138 but can move agasint him in summary suit before 3 years because you claim gets over after three years.

jatin sharma (Expert) 06 August 2011
hi , no you could not file a suit against him in 138 NI Act the time period of cheque is over now.if the date is not mention on the cheque then you can mention the date on it and submit in the bank for cash. if bounced than file a suit against him

M.Sheik Mohammed Ali (Expert) 06 August 2011
yes, i do agree expert query reply

Advocate. Arunagiri (Expert) 06 August 2011
If the cheque is undated, you can very well present the cheque.

The business is ceased is immaterial for a 138 case.

ajay sethi (Expert) 06 August 2011
1) what is date mentioned in cheque?
2) whether payment made by you to shop owner was by cash or cheque
3) has he addressed any letter acknowleding libaility

4) whether refusal to pay money is in writing ?

Querist : Anonymous (Querist) 06 August 2011
1)Date not mentioned
2) By cash Rs.65,000/-
3) No letter for acknowledge
4) By oral he refused

Ajay Bansal (Expert) 06 August 2011
You may file a complaint u/s 138 N.I. act as advised above.

ajay sethi (Expert) 06 August 2011
if you have made payment by cash what is proof that cheque was issued in respect of debt due and paybale .

M/s. Y-not legal services (Expert) 06 August 2011
dear author as per your statement one thing is clear that cheque issued for security purpose only.. not for discharge the liability.. am i correct?

M/s. Y-not legal services (Expert) 06 August 2011
if i am correct mean your case is very weak.. a cheque which is issued for security purpose can not be involved with sec.138 of n.i act.. a dishonored cheque should be issued fir discharge the liabilities. so right now you are on risk. have to work out. unless your case will loss..

prabhakar singh (Expert) 06 August 2011
as the cheque is undated it is still valid,presumption of law would be there in your favor that it was issued for consideration but in case your opponent succeeds in rebutting the same,hard ship would come again your way to prove the consideration.