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Sec 138 cheque bounce case

(Querist) 09 July 2013 This query is : Resolved 
Hello All,

I would like seek your kind guidance to have a solution for this case,


I was transacting with a person for around 2 years as a member of chit fund of 2 lakhs for which i had to pay 5000 X 40 months ( no supporting documents, all transactions only by cash). I took the chit around 20th month and gave a blank signed cheque as a surety. Due my financial problems i couldnot pay 5 months amount of 25000. Now the chit fund person has presented the cheque without bringing to my notice for the amount of 1 lakh (whereas I had to pay him only 25000)and the cheque has been bounced.

Now i have received a lawyer notice, stating as i had taken a hand loan of 1 lakh and i have not returned, hence he has presented my cheque and now will be going to court with regard to case under sec 138.

This person has not shown in the lawyer notice, as he is running the chit fund and the due amount from me is of that chit. he doesnt have a licence to run the chit fund, but he is doing the same from last 5 years, without an valid licence to do that business.

In this regard, I seek your support to how to sort out my case, by settling my 25000 thousand only and not 1 lakh.

Kindly suggest,
Advocate M.Bhadra (Expert) 09 July 2013
Once a cheque was issued and a case has been started then you have to appear before the court and defend the case by proper evidence.

Calcutta High Court
Samarendra Nath Das vs Supriyo Maitra on 16 December, 2005
Equivalent citations: 2006 (3) CHN 518
Author: P Sinha
Bench: P Sinha
JUDGMENT

P.N. Sinha, J.

In a criminal proceeding under Section 138 of the NI Act these are not relevant at all. In the instant matter a Magistrate is to consider whether the offence as alleged was committed or not and whether evidence is sufficient to prove complainant's case. Legality or illegality of the contract and existence and non-existence of money lending business by the complainant is not a ground to throw the complainant's case out of Court. If it was a money suit for recovery of the money the accused petitioner would have been definitely in a better position and was entitled to the advantage of violation of Sections 23 and 24 of the Contract Act as well as non-existence of money lending business of the money lender. The accused petitioner has only remedy in the trial to rebut the the presumption under Section 139 of the NI Act, and to establish his case by leading evidence when he would be asked to enter into defence after his examination under Section 313 of the Code would be over. When all the prima facie materials of offence under Section 138 of the NI Act is present sufficient to issue process this, Court would not interfere into the order of the learned Magistrate and would not quash the criminal proceeding or set aside the order of the learned Magistrate. The accused petitioner has remedy only to lead evidence by examining witnesses and producing documents to prove that there was no transaction with complainant or that he did not issue any cheque in favour of the complainant and that there was no existing debt or liability at the time of his entering into defence and leading his evidence.
MANJUNATH (Querist) 09 July 2013
Thanks for your kind inputs....ny other suggestions?
ad. creaminall (Expert) 10 July 2013
First of all you have to reply those notice and deny all the allegations made against you in the said notice.
Rajendra K Goyal (Expert) 10 July 2013
Reply the notice as advised. Defend the case through some senior local lawyer.

As a counter you may complain against illegal business of chit by the concerned person.
MANJUNATH (Querist) 10 July 2013
to whom should i complain has he is doing the illegal chit business ?


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