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PRERNA SHARMA (JOB)     20 January 2018

Undated cheque bounce cases

YOU JUST CAN'T FILL ANY DATE ON AN UNDATED CHEQUE WHENEVER YOU WISH AS PER YOUR CONVINIENCE .... THIS CAN BE EXPLIANED BY THESE CASE LAWS

  CASE LAW: IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23.11.2006 CORAM: MR. JUSTICE S. TAMILVANAN Crl.R.C.No.1439 OF 2004 Ramakannan Versus Chettiar and Co.,

Under Section 138 of the Negotiable Instruments Act, as the validity of a cheque is only for 6 months from the date of issuance, the implied authorisation for filling up the cheque should certainly be within the limitation of six months and not more than the period of limitation. As it has been proved that the undated cheque was handed over one year and six months prior to the date of the cheque, I am of the considered view that the dishonour of the same would not create any criminal liability on the revision petitioner/accused.

M/s.Cement Agencies rep. By its managing partner, Vijayawada vs. Vijaya Babu and Another (1997(4) Crimes 273) rendered by the Andra Pradesh High Court, wherein the Honourable High court of Andra Pradesh has held as follows:

IN THIS CASE CHEQUE WAS PRESENTED AFTER FOUR YEARS FROM BEING HANDED OVER TO THE COMPLAINANT.AND WAS HELD THAT:

"If time barred cheques can be encashed even after the expiry of the specified time, it will create so many anomalous situations which are likely to be used by unscrupulous litigants. For all these reasons, the appeal fails and it is accordingly dismissed.

" THE ICAI STUDY MATERIAL: https://resource.cdn.icai.org/38519bos28158mod1-cp2.pdf    PAGE 32 : A BANKER WILL BE JUSTIFIED TO DISHONOUR A CHEQUE IN THE FOLOWING CASES (1) IF A CHEQUE IS UNDTAED {Griffiths v. Dalton (1940) -2 K.B 264}

In the Case of "Griffiths v. Dalton (1940-2-KB 264)" the facts of the case are that the cheque was given to the plaintiff in August, 1931, and that time bore no date. Nothing was done with it until February, 1933, when the plaintiff filled in the date of the cheque February 20, 1933. He then presented the cheque for payment at a Brighton Branch of the Midhand Bank, but it was dishonoured and he filed a suit and it was held as follows:- "Although the cheque in the present case bore no date, the plaintiff, by S.20 of the Bill of Exchange Act, 1882, following what, I think, was the common law before the passing of that Act, had a prima facie authority to fill in the date, but by the common law he was bound to do so within a reasonable time. The question what is a reasonable time is a question of fact, and on the facts of this case I am satisfied that the reasonable time had long since elapsed. There was therefore, no authority to fill in the date as it appeared on the discussed cheque and no liability on the bank to meet it. The claim on the cheque fails.

" HENCE GIVING AN UNDATED SECURITY CHEQUE PLEASE KEEP A COPY TO PROOF THAT YOU GAVE AN UNDATED CHEQUE GET IT SIGNED BY THE PARTY AND ALSO ASK HIM TO MENTION THE DATE ON THE COPY OF CHEQUE AND COUNTERFOIL OF CHEQUE

 



Learning

 11 Replies

PRERNA SHARMA (JOB)     21 January 2018

Sir actually i have paid the amount by cheque not in cash....but 99% of lawyers dont know about these cases....

PRERNA SHARMA (JOB)     22 January 2018

SIR I HAVE READ SO MANY CASES BUT STILL I HAVE TO THINK TWICE BEFORE UNDERSTANDING WHO IS A RESPONDENT AND WHO IS A PETITIONER....devilcheeky
WELL I WAS SEARCHING IF I COULD DO ANYTHING LEGALLY,,,,,,BUT IN ALMOST ALL CASES IT TAKED 2 TO 10 YEARS FOR ANY JUDGEMENT THAT TO IN DISTRICT COURTS,,,,....OTHERWISE I HAVE MY WAYS ALSO.....
WAS PREFERRING THE LEGAL OPTION FIRST....angel

PRERNA SHARMA (JOB)     23 January 2018

MR SINGH CAN YOU ANSWER THIS QUERY IT WAS POSTED ON LCI BUT THE MEMBER ACCOUNT IS DELETED NOW....


"I have given a loan of 500 gms of gold to a jeweller few months back at interest of 1% pm which was also purchased from him for 15lacs in cash....which he is not returning now all i have is a blank signed undated cheque and a reciept of recieving gold whaat to do nnow....???"

PRERNA SHARMA (JOB)     23 January 2018

YOU WANT ME TO READ ALL THEESE ACTS AND RULE ...cheeky....
I AM SERIOUSLY FED UP WITH NI ACT 1881...WONT BE ABLE TO READ MORE......devil


(Guest)

Is it your advice to all others or personal problem on which you want solution?

 


(Guest)
Originally posted by : Rahul sharma
YOU WANT ME TO READ ALL THEESE ACTS AND RULE .......
I AM SERIOUSLY FED UP WITH NI ACT 1881...WONT BE ABLE TO READ MORE......

 

Who compelled you to read more of the IT Act 1881. But, if you want to learn, something for your own benefit that is your own compulsion. Nobody can thrust knowledge in your brain if that is not ready or mature to accommodate that.

Better depend upon your own study material or take help of your teacher to understand the law where you have any doubt.

 

PRERNA SHARMA (JOB)     24 January 2018

Originally posted by : JIGYASU: Legal Analyst



Originally posted by : Rahul sharma



YOU WANT ME TO READ ALL THEESE ACTS AND RULE .......
I AM SERIOUSLY FED UP WITH NI ACT 1881...WONT BE ABLE TO READ MORE......





 

Who compelled you to read more of the IT Act 1881. But, if you want to learn, something for your own benefit that is your own compulsion. Nobody can thrust knowledge in your brain if that is not ready or mature to accommodate that.

Better depend upon your own study material or take help of your teacher to understand the law where you have any doubt.

 

thank you sir..yes you are right knowledge has no ends....but i am not a law student....hence it is very difficult to understand deeply the laws.....it is better to take advice from a lawyer personally....here on LCI you cannot explain the whole problem....

PRERNA SHARMA (JOB)     24 January 2018

the first one of lending 30 lacs is my personal problem sir...

P. Venu (Advocate)     24 January 2018

Yes, the provisions of NI Act 138 has virtually created a Frankenstein;  but the it survives not because of lack of legal elements to counter it, but due to dissappearance of truth from our Court Rooms.

PRERNA SHARMA (JOB)     24 January 2018

yes you are right sir.....any one with a good lawyer can easily escape from the law....

Nitish Banka (lawyer)     03 April 2018

Posted by: Nitish Banka  Categories: Criminal Law 
 

 

What is a Cheque Bounce?

A Cheque Bounce case is a criminal case envisaged under section 138 of Negotiable Instruments Act. A cheque is said to have bounced because of below mentioned reasons.

  1. Stop payment
  2. Insufficient balance
  3. account closed
  4. signature mismatch
  5. exceeds arrangement

Conditions necessary for cheque bounce

  1. The cheque is bounced due to insufficiency of funds or all the above reasons.
  2. A Legal notice is given within 30 days.
  3. A payment of due amount is not made within 15 days time.
  4. the payment was to be made for discharge of legally enforceable debt.

Strategies to fight cheque bounce

Dispute Legally enforceable debt.

Since onus is on the accused to prove that there is no legally enforceable debt here are the examples to show that there was no legally enforceable debt

Cheque bounced was given as Security

If the cheques were taken only as security for prompt repayment and those cheque were not indischarge of any debt or liability. The date on which cheques were taken there was no debt or liability Accused cannot be prosecuted under NI 138.

In the case of Joseph Vilangadan (Supra) the facts were that the Directors had given certain cheques as refundable security deposits to ensure due performance of their work. In the given facts and circumstances it was held that there did not exist any debt or liability and the cheques were given solely for the purpose of security and hence no action under section 138 of the Act was maintainable.

If there was no debt or liability at that point of time while issuing the cheque

In Shreyas Agro Services Pvt. Ltd. vs Chandrakumar S.B. on 16 February, 2006

The very scheme of procedure adopted shows that the cheques are not issued in respect of any current existing ascertained liability. The words “for discharge of any debt or other liability” inSection 138 of N.I. Act should be interpreted to mean current existing or past ascertained liabilities. The cheque issued in respect of future liabilities not in existence as on the date of cheque would not attract prosecution Under Section 138 of N.I. Act.

So even if security cheque is bounced the prosecution can be initiated and only defence is that there was no legally enforceable debt.

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Friendly loan with respect of unaccounted money

As held in Sanjay Mishra vs Ms.Kanishka Kapoor The learned Judge held that the applicant has failed to establish that the cheque was issued by the 1st respondent in discharge of legal liability of the loan amount. The learned Judge observed that the 1st respondent has denied her signatures on the bill of exchange as well as the cheque subject matter of the complaint. The learned Judge has taken into account various circumstances borne out by the evidence on record and has passed order of acquittal. The learned Judge also considered the admission of the applicant that the amount advanced was an unaccounted amount which was not disclosed to the Income Tax Authority.

Cheque was lost and reporting of loss as well as stop payment prior to issuance of the cheque.

What is the case of the petitioner? According to him he had lost the cheque leaf. When was the cheque leaf lost? Under what circumstance was the cheque leaf lost? What is the conduct of the petitioner when he  realised that such cheque leaf was lost? Is there any conduct congruent to lose of such cheque leaf as alleged by the petitioner? Is there any conduct consistent with the theory of loss of cheque leaf? It is crucial and vital that there is not a single piece of acceptable conduct in which the petitioner is shown to have indulged in if as a matter of fact the cheque leaf were lost from his possession. If it were lost, one would have expected the petitioner, himself an employee of a Co-operative Society, to atleast issue a stop payment memo. That was not done. Of course, a convenient Bank Manager did attempt to oblige his customer, the petitioner, by stating in the course of cross examination that oral information was given. It is crucial that even the Manager does not say when that oral information was given and in respect of which cheque. If any such oral information were given, it is extremely unlikely that the cheque would have been dishonoured except on the ground of stop payment. The memo of dishonour does not significantly reveal such a ground for dishonour at all.

Accused Disputing Signature on Cheque

If the accused disputes the signature on the cheque. It is the banker who is the most reliable evidence to establish that the cheque is bounced due to signature mismatch. The bank manager has to summoned with all the records related to signature of the accused and testify in court that the cheque signatures mismatch.

There are also other defenses available to disprove cheque bounce cases however if the cheque is really issued for discharge of legally enforceable debt then it is better to compromise as the cheque bounce case is compoundable


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