Does a cheque dishonoured -reason "account blocked- situation covered in 21-25" covered u/s138 niact

brijender gupta (Querist) 21 March 2014 This query is : Resolved
Sir,

I (delhi based) entered into a franchisee agreement with a mumbai based company in 2013, wherein the company was supposed to repay the franchisee amount,paid at that time,in case of "no profit" within a year from the date of MOU.

The franchisor turned out to be a defaulter & 3-4 criminal cases are pending in mumbai courts against MD & thus the bank account might have been blocked by the court.

The post dated cheque(1st MARCH 2014) of the franchisee amount,issued by MD of the company, dishonoured with the reason - Account blocked (situation covered in 21-25).

Does it fall under the ambit of section 138
N.I.ACT. If yes, kindly suggest me procedure for the same.

Kindly reply at the earliest as i recd the banker's information regarding the cheque on 7th march 2014.

Thanking you in anticipation.

Follow Query

Report Abuse

Dr J C Vashista (Expert) 21 March 2014
It attracts the prvisions of Section 138 of The Negotiable Instruments Act, 1881, engage a local lawyer and proceed

Nadeem Qureshi (Expert) 21 March 2014
if the bank account is freezed by court order then the complaint under section 138 of NI Act will not attrect but for precautionery first of all send a legal notice to company and Directors as per the act and if they are not ready to make the payment then file a complaint before court may be the court ignore this point and registered the same. feel free to call

Guest (Expert) 21 March 2014
Sec.138 is not attracted. Dishonour of cheque is not attributed to the drawer, as blocking of account is beyond the control of the drawer of the cheque.

Rajendra K Goyal (Expert) 22 March 2014
A notice u/s 138A NI Act is to be issued and let the situation be clear how, why and by whose order the account was blocked.

The matter can be advised on receiving the exact information about blocking.

T. Kalaiselvan, Advocate (Expert) 23 March 2014
Though the cheque was returned by the bankers for the reason' account blocked', you still have rights to issue legal notice to the drawer of cheque demanding the cheque amount. Further legal recourse can be decided on receipt of his reply.

V R SHROFF (Expert) 23 March 2014
you issue 138 ni notice.

If a/c blocked by authorities, and not by himself, [ cbi/ police/ tax dept] accused get good defence.