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anonymus (confidential)     24 October 2008

138 NI ACT

Dear members dont u think that sec 138 NI Act is mostly misused by usurious moneylenders. The real intention of the amendment in the year 1986 was only to make the bouncing of the cheques as an offence when issued in comercial transactions, so that there will be credibility in the business. But the provision is mostly used only by the moneylenders and financiars and rarely by the business people. Any how the decisions of our Supreme court have legitimised the invoking of 138 even by the likes of "Shylocks"to demand the pound of flesh. Please ponder.


 13 Replies

Sushil Kumar Bhatia (Advocate)     24 October 2008

The courts are not meant as recovery agencies.

K.C.Suresh (Advocate)     25 October 2008

Right Mr. Mehbub. 138 suffers large scale misutilization. Who is to be blamed. Knowing that the cheque is a blank cheque and only a guaranty one-  the holder is advised by 'some' for adding a hiogher amount and making a cooked up story to attract the legal costumes - Who is that 'some'. People are greedy. But the protectors of law, the saviours of the society should not conspire with greedy. When that is done the number will be reduced to some extent. But we know it is a dream of a man who trust and love law.

aruntrivedi (lawyer)     25 October 2008

This is solely being misused for gratifications. In one of my case the issuer of cheque for Rs. 1 Lac when bounced from the Bank the Complainant was asking for 10 lacs, if paid he may enter into comprimise else he may continue his criminal litigation in court and the issuer did not agree with him now he is punished for one year RI with 5,000 fine/penalty and Rs. 1 Lac compensation to be paid to Complainant. I have filed an appeal on certain other issues of Evidence Act with Sessions Court for wrongly being punished, as the proving his complaint genuine the burden rests with him, he not produced the certain proofs before the court of law, because these proofs may go against him and on this issue the appeal is filed. Now am hopeful of convict being released of one year RI and Penalty. I am fully agree with KCSuresh.

H. S. Thukral (Lawyer)     25 October 2008

The frustrating element is that now the banks have started issuing notice and filing complaints from their offices which are located far away from the place of opposite party thus almost rendering the accused helpless.

prashanth (Law Officer)     25 October 2008

Yes, Offcourse your opnion is 100% true. but my question is sec.299 of Crpc is applicable for 138 NI Act Cases.[Absence of the accused Record the evidence]

L.Chandra Mohan Reddy (Advocate)     25 October 2008

dear sir

In case of under section 138 of Ni Act the accused pay the cheque amount to the complainant but the complainant could not withdraw the case what is the remedy to the accused

L.Chandra Mohan Reddy (Advocate)     25 October 2008

what is the remedy

anonymus (confidential)     25 October 2008

Dear brothers thank u for ur valuable participation. By invoking 138 NI ACT, is not the govt losing revenue by way of court fee. Imagine the amount of court fee that would have to be paid if civil suit is filed to recover the cheque amount. The legislators must ponder over it and decide to amend the law suitably to strictly apply only to COMMERCIAL TRANSACTIONS AND NOT FOR LOANS. Yet another way is the courts must use their discretion while punishing the accused, by considering the facts and the nature of transactions and should award simple punishments and desist from imposing "COMPENSATION IN FORM OF CHEQUE AMOUNT OR TWICE OF IT" in cases of simple money transactions.

Last but not the least, the advocates should resist such avarious claims even by their own clients by following strict ethics of profession as well said by Mr. Suresh.

prabodh kumar patel (advocate)     25 October 2008

Mr. Reddy

I think a case u/s 138 NI Act can be withdrawn at anytime before pronouncing of the judgment and there is a decision of the Apex court also to that regard.

Hemant Agarwal ( Mumbai : 9820174108)     25 October 2008

The courts are not functioning due to the money of Court fees recovery.  The expenses for Court functioning (salaries, Electricity, premises etc...) are borne by the Govt, who in turn recoveres it by means of various taxes levied on the citizens.

Even if there are no N.I.Act cases, the courts will still function and there will be expenses for running the Court functions.

In a new development, the MM courts in Mumbai have started levying a 2% court fee on N.I.Cases, subject to different slabs. Don't about the rest of the country.  kindly confirm about other places.

Keep Smiling ... HemantAgarwal

Srinivas.B.S.S.T ( Advocate)     25 October 2008

Dear Mehbub Sir, dont you think that the NI Act is most hurriedly
and ill drafted Act??? for instance that the word DIS HONOURE, 
banks have as many as 40 reasons for DISHONOUR of a cheque.
Unfortunately in the Act they were not mentioned so every time we have
to rely upon the precedents or have to  wait for some to come
in our favour.

Nishith P Thakkar (lawyer)     02 November 2008

of the payment of the said cheque amount is by mode of demand draft or by cheque. you can file quashing petition under section 482 of the cr.p.c. or petition under article 226 of the constitutuion of india and pray for the quashing of the proceding by showing the practicle settlement between the party. pleas take the ground that "continuation of the proceeding will not be in the interest of justice and same would be misuse of process of law."


Nish*th p thakkar

Nishith P Thakkar (lawyer)     02 November 2008

dear friends

kindly consider the analogy of section 139 of the NI ACT the presemption under this section is not with regards to the legality of the transaction . the presumption attached to this case of 138 is , the presentation and delievery of the cheque  is for  the legal porpose.  the said presumption is not covering the perview of " transaction and the legality of debt"

kindly note that the  defination of "contract"   an agreement enforceable under the law is contract . in that case the aggrement for saleing liquor in gujarat has no force of law and the transection for this buisness is not legal  and there for the provision of section 138 is not applicable to this kind of cases. you can bring similar circumstances  to the notice of court by way of cross examination of complainant. in the case you can plead non existance of contract and non existance of buisness terms

the accused is seltered with the inocence of guilt unless proved guilty beyound reasonable doubt, this is basic thought of justice more so the provision of section 101 and 102 of Evidence act,  cast duty for the complainant to prove the debt and the legal transaction of the case related to 138 of NI act.the burdon to prove inocence is not  on accused. since our's is criminal adversary system. where the prosecution has to prove the guilt.

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