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ravi kumar ( )     21 December 2010

banking- section 138

gud morning

are banks liable to clear cheques from an old cheque book 8 months after issuing a new cheque book to its customer?

r they bound to ask the drawer for a confirmation in the above case?

can they ask the drawee to get the instrument countersigned once again?

do they simply pay the amount or refuse to pay?



Learning

 11 Replies

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     21 December 2010

Legally not but normally they should.

1 Like

ravi kumar ( )     21 December 2010

"legally not but normally they should"  WHAT DOES IT MEAN.


(Guest)

Dear Ravi Kumar

First we must understand what are the elements in the cheque which a bank see before passing the cheque:

1. date of cheque (cheque must be less than 6 month old on the date of presentation ie. if cheque in bank is presented for payment on 21/12/2010 the date of cheque must be on or after 22/6/2010)

2. Sign: Sign must match with that of bank records

3. counter sign on overwritings by the drawer.

4. Cheque must be drawn on the branch on which it is presented for payment (untill it is at par payable on all branches)

5. Amount : amount as per figures or words should match other wise amount as per figures is considered valid for payment.

6. Issued for cheque book issued to drawer.

If all abover ingredients are present in the chequed then banks are duty bound to pay.

It hardly matter whether the cheque book is how much old. There are hundreds of cheques presented for payment in the branch and bank is not expected to contact drawer. Once the drawer has issued the cheque is valid for payment untill it suffers from any of the deficienies as above mentioned.

Mr Bechara............................

Mr 

1 Like

ravi kumar ( )     21 December 2010

dear all  just consider this scenario

a cheque was issued with a post date of one and a half years. in the meantime the cheque book out of which the cheque was issued was exhausted. a new one was issued by the bank. 8 months after the new book was in operation the post dated cheque is presented to the bank for clearance which was dishonored. does the dishonor of the post dated cheque after following due process qualify for a case u\s 138? as i understand it post dated cheques do not merit cognizance u\s138.

pl. think over

ravi k

1 Like

(Guest)

no it is bank's fault.  I think the problem is due to change of account number(core banking) issue notice to the concerned bank  and their higher officials.  That if the amount is in your account and despite the same dishonoring will not attract 138 NI act  

Amit Minocha (Lawyer)     22 December 2010

It is a valid cheque under the Act. Think of a scenario when A takes a loan for 8 months and gives a PDC of 8 months. In the mean while no. of cheque books might get changed by the drawer, would that invalidate the PDC ? If  you say yes, where would you place the cases of purchase of Car/ Bikes/ Houses through Finance or loans and where installments runs into decades through  PDC issued in advance for  next 15-20 yrs. Will bank not pass those on presentation within due period ?

The bank is not supposed to ask every account holder regarding old cheques presented to his account. It is for the customer to stop payment of old cheques incase he claims it to be lost / misplaced etc. Incase the instrument is presented within 6 months of its date, the bank is bound to honour provided all other things on cheque and balance in account of the drawer is  in order.

I hope it would clarify your dobuts

2 Like

Amit Minocha (Lawyer)     22 December 2010

Dear Mr. Ravi,

I believe when the cheque is presented on the due date firstly it is no more a post dated cheque but a current cheque instead and provided there is a legal debt as required u/s 138 NIA, the act gets attracted for the purpose of offence. The presumption of section 139 would follow thereof.

1 Like

Vinod kashyap (Advocate & Legal advisor)     22 December 2010

Issuence of check book not matter, limitation of 6 month shall be count from date when cheque was issued

ravi kumar ( )     22 December 2010

dear mr. Amit,

the complainant, in a certain instance of this kind has categorically, under oath, claimed that the cheque was issued to him on the date that it was presented. can the complaint be quashed at the trial stage if we can prove that the complainant is lying under oath by producing the old and the new cheque books for verification by the trial magistrate? he could have easily said that the instrument was given to him as a collateral when the money changed hands and that it was a PDC.


(Guest)

amit sir correctly given reply

1 Like

Amit Minocha (Lawyer)     22 December 2010

Dear Mr Ravi,

U can produce the bank records to show series of old cheque book as well as current cheque book, But how would you prove that you did not leave any unused cheque in old cheque book which you gave him recently. It happens many times that parallel cheque books are also used. Further if the instrument (cheque) is  vaild on rest of its contents mere date of issue is of least merits. It would be better to focus more on legality of the debt.

But once summoning has been done by the Court the question of quashing would not be considered by the Court at such an initial stage further more you would also need to prove your stand by summoning records/ bank which will happen only through  trial of the case.

However, certainly  you can create certain pressure on the complainant  if you are able to prove that the cheque was lying since long with drawee  by moving an application under Section 340 CRPC against the person(complainant)  deposing falsely on oath at any stage of the proceedings and even thereafter. 

1 Like

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