Stop payment of cheque
rachanaa
(Querist) 25 April 2013
This query is : Resolved
Dear Sir / Madam,
I need a URGENT HELP from your side. I was a tenant in the house for the past 4years where i have paid Rs. 70001 as security deposit. Now, i have shifted to the new house. We, submitted the keys on 31st March to the owner. Out of 70001/- she has deducted one month rent Rs. 8500/-, maintenance charges, painting etc., and issued a cheque for Rs. 48,256/- ( Deducting Rs. 21,745/-). Now, my house owner had made the STOP PAYMENT for that security deposit cheque on 5th April 2013. After deducting all the charges, now she is saying different story telling that more damages are there so we will not give you the amount. So, please suggest what to do ? Do, we get our amount please reply.
V R SHROFF
(Expert) 25 April 2013
IT IS CIVIL DISPUTE.
Will not attract 138 NI, as she already informed you the reason of Stop Payment.
Settle it .
Civil constructions now cost almost double, so at earlier stage, she could not estimate the repair cost correctly.
Advocate M.Bhadra
(Expert) 25 April 2013
Send legal notice as per provision of sec.138 n.i.Act claiming money,if they would not comply then file a case in Magistrate Court.
Supreme Court of India held that drawer is liable on stop payment of cheque:-
M/S Laxmi Dyechem vs State Of Gujarat & Ors. on 27 November, 2012
Author: T Thakur
Bench: T.S. Thakur, Gyan Sudha Misra
, , , ,
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS. 1870-1909 OF 2012
(Arising out S.L.P. (Crl.) Nos. 1740-1779 of 2011)
M/s Laxmi Dyechem …Appellant Versus
State of Gujarat & Ors. …Respondents With
CRIMINAL APPEAL NOS. 1910-1949 OF 2012
Hon’ble Supreme Court has narrated four key Judgments where the drawer was held liable for Stop payment of cheques. However there is only one judgment which deals with the above laid preposition. In M/s. Electronics Trade & Technology Development Corpn. Ltd., Secunderabad v. M/s. Indian Technologists & Engineers (Electronics) Pvt. Ltd. and another . In this case, a cheque was presented by the complainant on 28-1-1990, through their bankers M/s. Hyderabad Bank for realisation, with the promise by the accused, that the same will be honoured when presented. However, the said cheque was dishonoured with the banker's endorsement dated 29-11-1990 which stated "(i). refer to drawer, (ii). instructions for stopping payment and (iii). stamped exceeds arrangements." Appellant filed complaints under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheque for insufficiency of funds in the accounts of the accused. It was held by the Hon’ble Supreme Court that:
“It would thus be clear that when a cheque is drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person out of the amount for the discharge of the debt in whole or in part or other liability is returned by the bank with the endorsement like (1) in this case, "I refer to the drawer" (2) "instructions for stoppage of payment" and (3) "stamp exceeds arrangement", it amounts to dishonour within the meaning of Section 138 of the Act. On issuance of the notice by the payee or the holder in due course after dishonour, to the drawer demanding payment within 15 days from the date of the receipt of such a notice, if he does not pay the same, the statutory presumption of dishonest intention, subject to any other liability, stands satisfied".
The position of Law in this regard has changed dramatically from the 1990’s till date, due to the amendment that has been brought into the section. A close look on the judgments of various High Courts shows that the Courts relied on the presumption that the offence referred to in Section 138 can be made out only on bouncing of a cheque on the ground of inadequate balance in the account concerned. Where the cheque is returned unpaid on other grounds, the same has not been made an offence or where the payment was counter-manded then it was without an offence. Courts during that time seemed to more in favour of the drawer. However, after the recent judgments of the Supreme Court, the burden has now shifted to the drawer and a presumption has to be drawn in favour of the holder of the cheque.
A plain reading of section 138 of the Negotiable Instruments Act makes it clear that the words "either because of the amount standing to the credit of that account is sufficient or that it exceeds the amount ..." have been specifically used. It would, therefore, mean that only two contingencies are contemplated and as such, the words "... either .... or" have been used. It is, therefore, clear that the cheque should be dishonoured either for the insufficiency of the amount or, because it exceeds the amount arranged to be paid from that account. No third contingency or eventuality has been contemplated and the specific clear wording of section 138 eliminates any third contingency other than what is mentioned in the section itself. It need not be stated that a cheque can be dishonoured for so many reasons and there may be so many eventualities in which the payee is denied payment by the bank. For example, mentioning the date incorrectly or some corrections not initialled or the difference in between the amount mentioned in figures and words are certain other contingencies in which the cheque will be certainly dishonoured and would be returned as unpaid. It is not in respect of any of these contingencies that the dishonour of a cheque has been made penal under section 138 of the said Act.
CHAPTER XVII was inserted in the Act 1988 with a view to promote the efficacy of banking operations and to ensure credibility in transacting business through cheques. However the chapter is not comprehensive and lacks to cover the various aspects of the commercial transactions especially in view of the emerging ways of payment through the Internet and other electronic means. Section 138 also does not specifically cover the aspects such as where the payment has been stopped by the drawer or where the account has been closed prior to the endorsement of the cheque. These provisions no doubt have served their purpose but they could be more elaborate in solving the dispute rather than relying on the Court judgments which we have seen are quiet contrary at times.
prabhakar singh
(Expert) 25 April 2013
You should not have handed over keys to landlord/lady without getting back the security amount.It was primary mistake.
It must have been ascertained before vacating the building what damages to it, if any, were caused.
The cheque can be presented and N.I Act 138 case as well as small causes case can be filled.
Advocate Bhartesh goyal
(Expert) 25 April 2013
Issue notice to drawer and demand cheque amount,if drawer fails to comply with the notice then file complaint in the court having jurisdiction.simultaneously file a summary suit against her.
Raj Kumar Makkad
(Expert) 25 April 2013
Despite of your earlier mistake of handing over the possession of that property to landlord without getting security amount, you should now proceed for criminal complaint under section 138 NI Act as advised above.
