138 of negotiable instruments act due to breach of contarct

Subramani (Querist) 21 May 2012 This query is : Resolved

I was working with company in 1 year contract and i executed bond of Rs 1 Lac . But, i left the company in 1 month less than 12 month and stopped The payment of 1 lac. Now, i was called to court to answer the same stating that (Section 138 of Negotiable Instruments Act).

What will be implication due to this. Is this really a valid scenario...or what would be my action on this.

Please help me in this regard.

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ajay sethi (Expert) 21 May 2012
did you issue a cheque of rs 1 lakh? if cheque has bounced company must hhave issued legal notice?

did you reply to legal notice?

you have to defend the case . engage a local lawyer

Subramani (Querist) 21 May 2012
Thanks for the suggesion.
Yes, I issued a check of Rs 1 Lac at the time of joining as requested by company.

Advocate M.Bhadra (Expert) 21 May 2012
Defend the case by filing a show-cause describe details of your employment contract and about the Bond do'nt pay cheque amount,consult with a criminal lawyer.

H. S. Thukral (Expert) 21 May 2012
The cheque issued by you is against contemplated liquidated damages. Liquid damages are not payable on asking. Court has to adjudicate the same and become payable after adjudication. Therefore cheque issued by you is not against any legal enforceable debt or liability and hence no offence under section 138 can be made out. But you have to defend the case and your lawyer shall do it for you. Please avail the services of a good lawyer.