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Negotiable Instrument Act

(Querist) 15 January 2009 This query is : Resolved 
customer issued cheque of Rs 100000 to bank official but same was dishonourd due to reason "Refer to Drawer".
Can we file complaint u/s 138 against the cusotmer. Plz refer sny latest judgement.
What's the meaning of Refer to Drawer.
J. P. Shah (Expert) 15 January 2009
"REFER TO DRAWER" MEANS THERE WAS NO SUFFICIENT BALANCE OR FUNDS WERE NOT ARRANGED FOR BANK TO HONOUR THE CHEQUE. U CAN DEFINITELY FILE CASE U/S 138 TO 142 OF NI ACT.
AEJAZ AHMED (Expert) 15 January 2009
DEAR KANWAR,

With concerned to the First Part of your question:

REFER TO DRAWER:

A banker may refuse payment of cheque when the funds in the account of a drawer are insufficient. While returning the cheque the banker may use the words “Refer to drawer”.

Refer to drawer mark indicates that there are some defect or otherwise some problem to pay the amount written in the cheque.

It's meaning is take the cheque to the issuer of the cheque for rectification of the problem.

"INSUFFICIENT FUNDS" and "REFER TO DRAWER" have same meaning though the later is a more sophisticated term for insufficiency of funds and is a little wider and may include other reasons also which are attributable to the drawer.

If the bearer who presents the cheque get it dishonoured for insufficiency of funds then he can file a complaint under Sec.138 N.I.Act. Normally when a bearer cheque is presented over the counter for payment, if it is dishonoured, the holder would not get the bank's memo containing the reason for dishonour. If on the other hand it is sent for collection through the bearer's bank he will get a memo containing the reason for dishonour. If such reason is on account of insuffiency of funds even garbled under 'refer to drawer' 'exceeds arrangement' etc., the holder can proceed under Sec.138 of the N.I.Act.

Refer to drawer :
The bank endorsement “refer to drawer” also may fall within the ambit of the provisions of Sec. 138 of N.I. Act . - 1994 Crl. LJ 2874; 1995 Crl. LJ 3828; 1994 (1) Crimes 606; 1995 Crl. LJ 3098


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