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Ashley (Head - Legal & Secretarial)     24 June 2008

138 case

I would like to know if a party say A ltd has outstanding amt of Rs. 10 lacs recov from B and when it sends a legal notice to b, no response recd in 15 day and co files case after expiry of aforesaid period, howver after case is filed in court A receives Rs. 4 lacs and further receives Rs. 4 lac and has only Rs. 2 lacs, howver party A contests for Rsm 10 lacs as it pleads tht bouncing of cheque itself is offence , wud like to know wt stand both parties can take and wt is legal position in this regd. Since A had recd only one cheque of Rs. 10 lacs which bounced. Views soliciited. Ashley


 8 Replies

H. S. Thukral (Lawyer)     24 June 2008

I will try to explain by way of citing a case in my knowledge.  The accused made full payment to the complainant, involved in the dishonoured cheque, yet the complainant was not ready to withdraw the complaint.. The court sentenced the accused to imprisonment for one day ( till rising of the court) and no fine. 

So , in this case also the complianant can still prosecute his complaint  on cause of action in his favour, and if he is not prepared to accept the further payment if offered, the court is bound to take into consideration these factors while convicting the accused.

Srinivas.B.S.S.T ( Advocate)     24 June 2008

Ni act is brought into force so as to
punish the persons who issue cheques though they dont have sufficient
balance in the their accounts to honour the same. In toto the NI Act is
brought into existence to increase people's confidence in receivng
thier payments in the form of cheques so as to reduce the circulation
of real money. Do you know the govt will incurr more than the face
value of the currency it mints?. So as to increase the confidence of
people in alternatives of currency the Govt given some tooth to NI act
by imposing penal action for cheque bouncing. Prior to that its only
the charges for bouncing of cheques that the accused has to pay. So as
per the act whether the accused repaid the amount or not he is
punishable for issuing a cheque without having sufficient balance to
honour the same. Commonly the Complainant will withdraw the case after
receipt of the amounts and that is a general practice and rule of
settlement. But if the complainant wishes to continue the case though
the accused paid the amount he is liable to be punished for issuing a
cheque without having sufficient balance to honour the same.

K.C.Suresh (Advocate)     25 June 2008

Dear Ashley,

Cause of action starts not from the dishonor of cheque but from the lkaspe of 15 days from the receipt of notice is the settled legal principle. 1991(1)KLT 797 and 1992 Cr.L.J 1044 / 1992 Cr.L.J 739. Offence U/s 138 is compoundable (2000) 1 SCC 762. Accepting of 4+4 lakhs by the complainant while the complaint is pending is voluntary act and it is an agreement by the complainant to receive the amount. No body can accept the amount without an agrred mind. When the complainant accepts a part amount while the case is pending the complaint is liable to quashed being not maintainable as there was no willfull dishonest intention to cheat the complainant The accused is laible for balance amount. (199(2) Bank CLR 143 (Ker). Further the case is a compoundable one as there is no bar in the NI Act. Adv. K.C. Suresh, B.A., LL.m, PGDHR (Citasions are not to the point but with certain principles which suit to your case)

H. S. Thukral (Lawyer)     25 June 2008

Ref  Mr. KC Suresh opinion:

Can a Magistrate quash the complaint at the thresh hold of proceedings and without taking evidence, that there was no intentionof the accused  to cheat the complainant? 

podicheti.srinivas (advocate/legal consultant)     25 June 2008

No amagistrate at the threshold cannot  dismiss the complaint prima facie the court has to examine the facts of the case, and take cognizance of the same if it is filed within limitation,and in the trial  the parties has to adduce evidence basing on the facts  then only the trial court has to act. upon the evidence led by the parties by giving a reasoned judgement either in favour or against the accused. 

ARVIND KUMAR (LAWYER)     27 June 2008

The facts of the case have not been properly mentioned here in your case. Regarding:-

Issuance of cheque, dishonour of cheque, If it is then after expiry 15 days from the date of notice the alleged complaint is premature as per the NI Act.

Secondly about 8 lac have been made in respect to the payment. The question arises here "what is the mode of payment?"

Please refer entire facts for suitable reply.

Bhaskaran Advocate (Lawyer)     29 June 2008

Complaint u/s 200 of Cr.P.C.  r/w 138 of N.I. Act is not a money recovery suit.  It is filed in order to get punishment to the Accused. 

Hence even a money-lender not having a licence  can get the Accused punished.  

But a money-lender when he accepts that he is a money-lender, in order to recover money should have a licence.

In the present case the repayment of 8 lakhs will be taken into account while delivering the judgement, and the balance amount will be ordered to be paid, on its failure. punishment will be awarded.

Anil Agrawal (Retired)     13 February 2009

 Payment is no escape.

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