NI act - cheque bounce case - Cheque return memo
srihari
(Querist) 20 March 2010
This query is : Resolved
Dear friends
I request you to please clarify the following:
A) A private limited company issued a cheque for Rs.10 lakhs. When the cheque was presented for clearing, Bank has returned the cheque with 'return memo'.
B) REASON FOR RETURN
Code No.
(01-09) FUNDS
01 Funds insufficient
02 Exceeds Arrangement
03 Effects not cleared:Present again
04 Refer to Drwaer
Note: Bank has marked no.03 for the reason for the return of cheque in the cheque return memo.
C) It is the outstation cheque and the validity period of the cheque was about to end, we could not represent the cheque and proceeded according to NI Act
D) We confirmed that, there is no amount in the bank account as on that date and so many other cheques were also bounced during that period of one month.
E) Now the accused is trying to defend that, since the cheque 'was requested to represent' it will not come under the provisions of NI Act
Can u please advice in the above matter. Please post me the judgements, if any are available in this regard.
Now this case is in hearing
Parthasarathi Loganathan
(Expert) 20 March 2010
Since the matter is sub-judice there cannot be any second opinion of this issue. As far as my memory goes, I remember to have read some instructions disallowing the clause No:03 as stated above. May be some internal guidelines issued by our bank based on circulars issued by IBA on legal cases affecting the bankers.
Raj Kumar Makkad
(Expert) 20 March 2010
Had accused replied your legal notice and what was his reply to this position?
Had you claimed the payment to be made within 15 days?
What is documentary evidence in your possession qua the balance in the account of the accused on the day of its presentation in his bank?
If all these satisfy the provisions then accused cannot take the plea of re-presentation and offense is complete.
adv. rajeev ( rajoo )
(Expert) 20 March 2010
When there is an instruction to present again by the bank, then it wont attract NI Act.
srihari
(Querist) 20 March 2010
Dear Raj kumar sab
A) I have issued the lawer's notice & demanded the amount with in 15 days of the notice.
B) I checked with their bank and got it confirmed that there was no balance at all and so many other cheques were also bounced during that period.
C) Their bank will be able to give the situation only if the court directs them to do so.
D) In his reply notice, he claimed that 'since representation was mentioned, it will not atttract NI Act'
E) He also mentioned that since he has to reconcile the account, he invited me for the settlement. (I have enough and very strong records & documents to proof the debt and liablility. It is a business transaction and every thing was documented.)
Pl advice
E) He has the habbit of issueing the cheques and dishonor. So many cheques were dishonored by him in the same bank.
niranjan
(Expert) 26 March 2010
I understand that bank should be asked as to why and how,they asked to represent the cheque.In the mean time you should file the complaint as Mr. Makkad advised.
