Exclusive HOLI Discounts!
Get Courses and Combos at Upto 50% OFF!
Upgrad
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

negotiable instrument act

(Querist) 10 June 2008 This query is : Resolved 
whether blanck cheque attract prosecution? if no plz give some judgement
H. S. Thukral (Expert) 10 June 2008
Yes. When a blank cheque is given there is an implied authority to fill it up.
jitu (Querist) 12 June 2008
than what about legally enforaceble debt? and holder in due course? do you agree that blank cheque is bill of exchange as defined in sec.5 of n.i.act and not the cheque asdefined in sec. 6 of the act
amit gupta_lawyer (Expert) 13 June 2008
A ''cheque" is a bill of exchange drawn on a specified banker and not expressedto be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form.

Explanation I.-For the purposes of this section, the expressions-


(a) "A cheque in the electronic form" means a cheque which contains the exact mirror image of a paper cheque, and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature (with or without biometrics signature) and asymmetric crypto system;

(b) "A truncated cheque" means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing.


Explanation II.-For the purposes of this section, the expression "clearing house" means the clearing house managed by the Reserve Bank of India or a clearing house recognised as such by the Reserve Bank of India.]


H. S. Thukral (Expert) 13 June 2008
I was refering to section 20 of the Negotiable Instruments Act
I refer to section 20 of the Negotiable Instruments Act on 'Inchoate stamped instruments'

By reason of the aforementioned provision only a right has been created in the holder of the cheque subject to the conditions mentioned therein. Thereby only a prima facie authority is granted, inter alia, to complete an incomplete negotiable instrument.
The provision has a rider, namely, no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid therein.
When a contention is raised that the complainant has misused the cheque, even in a case where a presumption can be raised under Section 118(a ) or 139 of the said Act, an opportunity would be granted to the accused for adducing evidence in rebuttal thereof.
I answered your query that when a blank cheque is issued and filled up by the drawee with an amount. which the drawer intended to pay ( presumption) and the cheque is dishonoured, proceedings under section 138 can be initiated. The accused shall get opportunity to rebut the presumption of debt liability/misuse/tempering/ forgery etc during the trial.


You need to be the querist or approved LAWyersclub expert to take part in this query .


Click here to login now



Similar Resolved Queries :