NI ACT

AAK (Querist) 04 May 2011 This query is : Resolved
Dear Experts,
Please Advice..

A and B are making transactions. A has given materials on credit to B. B was not in position to pay, so to help him, his relative C was ready to pay the debt to A but without any paper work and as a part payment he issued a cheque and the cheque got bounced.

Now there being no transaction between A & C, whether still A can issue notice u/s 138 NI act? Whether can we say A is holder in due course? what transaction is to be shown in notice?

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M.Sheik Mohammed Ali (Expert) 04 May 2011
yes, he can issue the notice rights, because he is victim person, either you can amicable settlement or face the trail .

Advocate. Arunagiri (Expert) 04 May 2011
It is a straight case. C had given cheque to A to discharge the loan of B.

C can take a defense in the court only.

leena Sharma (Expert) 06 May 2011
Yes.A criminal complaint can be filed for dishonour of cheque as Section 138 presupposes that the cheque has been issued for consideration. The person can be jailed along with a fine of Rs.5000/- Law is very clear on this point.

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