Sec 138- cheques/finanace
Kaycee
(Querist) 16 July 2012
This query is : Resolved
PLEASE HELP
I have invested some amount for a certain monthly consideration. I received the same for nearly more than 1 year via cheque and ECS on renewal. There was an (agreement) MOU and a cheque issued for the principal amount. The details of the cheque i.e. no, bank etc is included in the (agreement) MOU. The monthly disbursal via ECS and the receiving account details have been included in this MOU (agreement) signed by both parties. The monthly Consideration has not been received for a couple of months. The Person is available and wants some time to repay.
Questions:1)Areas when/where and the method to initiate Sec 138.(negotiable Instruments act).
2) The agreement is not registered or notified.
3) How many times the instrument needs to be deposited in the bank account.
4)The bank has been advised to give a memo as "Refer to the drawer".
5) Can the bank do this . If the cheque is not defective in details.
6) Should the bank be shown the cheque before and then take NOC that the cheque is OK to negate the Refer to Drawer Issue.
7) will the bank refuse ..
8 ) Can the drawer of the cheque advise the bank to "Stop Payment" via net banking/Letter.
9 ) Is a valid reason required to "stop the payment of Cheque" only to avoid Sec 138 of NI Act.
10) Can the terms of MOU be changed arbitrarily?
Kaycee
(Querist) 16 July 2012
NOT RECEIVED YOUR ANSWER. PLEASE REOPEN AND SEND THE ANSWER> EFFORT APPRICIATED.
Kaycee
(Querist) 16 July 2012
PLEASE GUIDE TO READ YOUR RESPONSE!!!!
Nadeem Qureshi
(Expert) 16 July 2012
Dear Querist
as per you query
1. 138. Dishonour of cheque for insufficiency, etc., of funds in the accounts
1[CHAPTER XVII]
OF PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNTS
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for 2["a term which may extend to two year"], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, 3["within thirty days"] of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability].
OBJECTS AND REASONS OF AMENDING ACT OF 2002
The Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due fo insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instruments Act, 1881, namely, sections 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques, Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the Courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act- (Para 1)
Keeping in view the recommendations of the Standing Committee on Finance and other representations, it has been decided to bring out, inter alia, the following amendments in the Negotiable Instruments, Act, 1881, namely:-
(i) to increase the punishment as prescribed under the Act from one year to two years;
(ii) to increase the period for issue of notice by the payee to the drawer from 15 days to 30 days; (Para 4)
2. no need to registered in this case.
3. there is no limit to present the cheque for encasement before the court, but only till the validity of the cheque.
4. & 5,6, related to bank not legal questions.
7.no never
8.yes, it's depend on the bank policy
9. stop payment also comes under 138 NI Act
10.It's depend on the agreement.if there is any clause in the agreement then yes.
Feel Free To Call
Kaycee
(Querist) 16 July 2012
Thank you very much SIR,Your crisp answers have unburdened me.Is it possible to send to you the scanned copy of the MOU for perusal.
Now should I inform the drawer of the cheque that the same will be presented on a particular day and to make sufficient funds to honour the same.
1)CAN A DRAFT GPA BE PROVIDED.?
2)Can I object to repeated ADJOURNMENTS AND HAVE THE MATTER HEARD ON PRIORITY.?
3) DRAFT OF THE NOTICE AND complaint for filing the case?
4)Is a police complaint/FIR required?
Thanking you in advance.
Nadeem Qureshi
(Expert) 16 July 2012
Dear Querist
for this type of drafting and pleadings you should contact personally
Raj Kumar Makkad
(Expert) 16 July 2012
I am of view that every aspect of your query has properly been resolved by Nadeem.
