Cheque Bounce
LK Salecha
(Querist) 23 April 2010
This query is : Resolved
My client has issued blank dated cheque to his supplier as security cheque on 31may2009 for Rs.7 lakhs,to be used if my clients client does not pay to the supplier on due dates.My clients client paid on two occasions on 8 june 2009 Rs two lakhs & 12 july 2009 Rs. two lakhs.On 16 july 2009 my clients supplier presents the cheque for Rs.7 lakh. Cheque dishonours due to insufficient fund. My client's supplier sends thru lawyer a legal notice. My client does not reply. Now they have filed court case under negotiable instrument act 138.
My client didnot owe to his supplier Rs.7 lakh on 16 july, as Rs.4 lakh was paid before cheque presentation date.
Can this case be dismissed as my client's supplier has presented the cheque for amount, my client did not owe.
R.R. KRISHNAA
(Expert) 23 April 2010
Cheque issued towards security prior to incurring liability does not attract section 138 of NI act. There is no offence on it. Read the attached judgment. It directly answers your query.
LK Salecha
(Querist) 23 April 2010
Thank you very much for urgent help.
My Client is authorised dealer of the supplier & has asked the supplier to supply materials directly to my client's client.My client has also consented to the following. "Once payment become due if my client's client does not pay, my client agrees to make payment". On 31st may 2009 total outstanding was Rs.7 lakh, but everything was not due because of credit period given for making payment after supply. Please reply as soon as possible, as monday 26april is the case for hearing.
