Cheque as a security
N.J. MISHRA
(Querist) 17 October 2011
This query is : Resolved
dear member kindly advise:
we as a employer are executing bond with our employee. in the said bond it is stated that if he forfiet this bond then he will be liable to pay the amount which the company has incurred on his training and education. my query is that can we take a blank cheque as a security. from the employee or from the guarantor, what will be its legality in case if we file a cheque bouncing case u/s. 138 of NI Act.
Shailesh Kr. Shah
(Expert) 17 October 2011
Its not advisable to take blank cheques. Execute Bond agreement.
Shonee Kapoor
(Expert) 17 October 2011
No blank cheques can not be kept as security. Bombay HC and Kerala HC has condemned this practise.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
Guest
(Expert) 17 October 2011
Security in the shape of a blank cheque is not permissible. It can be a duly drawn crossed cheque in the name of the company and completed in all respects. Normally, the security should either be in cash, demand draft, bank guarantee, and duly pledged in the name of the company the FD, Saving Certificates or Insurance policy for the amount of bond. Last four forms can be quite appropriate to be taken, as the appointment conditions can be longer than the validity period of cheque or demand draft.
H. S. Thukral
(Expert) 17 October 2011
The cheque so taken shall not be against any debt or liability. Pre-estimated damages arising out of any breach of contract do not become payable on breach. The same are to be adjudicated. Any amount mentioned as damages for breach of contract is outer limit and court can award lesser damages. Therefore bouncing of such cheque would not come under mischief of 138 NIA
prabhakar singh
(Expert) 17 October 2011
I am in absolute agreement of the opinion expressed by Mr. Harbhajan Singh Thukral.
ajay sethi
(Expert) 17 October 2011
blank cheque is no cheque . as held by bombay high court if blank cheque is issued and date , amounts filled in by complainant no cheque bouncing case is maintanable .
RAJU O.F.,
(Expert) 18 October 2011
Immediately after delivering the blank cheque to you, the employee can intimate the bank that a blank cheque of a particular number signed by him is missing from the cheque book and hence instructing to 'stop payment' of the said cheque. The bank will note the stop-payment instruction in their ledger/computer and cheque would be returned with the said reason on presentation. Blank cheques always give scope for mischief by both sides and hence not advisable.
