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amolpatekar   07 May 2015

Cheque bounce - pune

Is there anyone from Pune who can handle my section 138 case Pls provide me your contact number if possible . I want to file a case against an accused in Pune



 12 Replies

amolpatekar   07 May 2015

One more question If the cheque is bounced as there is a  mistake in signature (date is corrcted anf signed by accused but signature is not matching) from the accused can it be considered for cheque bounce case under section 138

Jeetender Gupta (Advocate)     07 May 2015

Whatever be the case send him a demand notice giving him 15 days to pay. Case filing applies thereafter. Also check city of bank of payer on cheque. That is where case needs to be filed.

ADVOCATE DIMPLE JINDAL (Advocate)     07 May 2015

Sh narinder Modi has done it. Breaking; #Dishonour of Cheque Cases can only be filed before the Court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment is situated; Cabinet approves Amendment to nullify Dashrath Rathod Jt.

On April 23, 2015 by Live Law News Network
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The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the proposal to introduce the Negotiable Instruments (Amendment) Bill, 2015 in Parliament. The amendments are focused on clarifying jurisdiction related issues for filing cases of offence committed under Section 138 the Negotiable Instruments Act,1881 (NI Act).

The main amendment included in this is the stipulation that the offence of rejection/return of cheque u/s 138 of NI Act will be enquired into and tried only by a Court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment is situated.

Section 138 of the NI Act deals with the offence pertaining to dishonour of cheque for insufficiency, etc., of funds in the drawer’s account on which the cheque is drawn for the discharge of any legally enforceable debt or other liability. Section 138 provides for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. The object of the NI Act is to encourage the usage of the cheque and enhancing the credibility of the instrument so that normal business transactions and settlement of liabilities could be ensured. The clarification of jurisdictional issues may be desirable from the equity point of view as this would be in the interests of the complainant and would also ensure a fair trial.

The clarity on jurisdictional issue for trying cases of cheque bouncing would increase the credibility of the cheque as a financial instrument. This would help trade and commerce in general and allow lending institutions, including banks, to continue to extend financing to the economy, without the apprehension of the loan default on account of bouncing of a cheque.

Action will be initiated to introduce the Negotiable instruments (Amendment) Bill, 2015 in Parliament in the second phase of the current Session of Parliament.

Courtesy; PIB

It was in Dashrath Rupsingh Rathod vs. State of Maharashtra a three Judge Bench of the Supreme Court held that  a Complaint of Dis-honour of Cheque can be filed only  to  the  Court  within  whose  local jurisdiction the offence was committed, which  in  the  present  context  is where the cheque is dishonoured by the bank on which it is drawn. The Court clarified that the Complainant  is  statutorily  bound  to comply with Section 177 etc. of the CrPC and therefore the  place  or  situs where the Section 138 Complaint is to be filed is not of his choosing. Supreme Court in Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. Overruled the two Judge Bench Judgment in K. Bhaskaran v. Sankaran Vaidhyan  Balan  (1999)  7 SCC 510 wherein  it was held that “the offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. A two Judge Bench of the Supreme Court recently dismissed  the Special Leave Petition as withdrawn, filed against the Bombay High Court Judgment which held that dis-honour of “AT PAR” Cheque cases can be filed to the Court within whose local jurisdiction the nearest available branch of bank of the drawer situated explaining the Apex Court  Judgment in Dashrath Rupsingh Rathod vs. State of Maharashtra. Earlier Supreme Court had stayed the Bombay High Court Judgment. It was in Ramanbhai Mathurbhai Patel  vs State of Maharashtra,  Justice M.L.Tahalyani explained the dictum in Dashrath vs. State of Maharashtra in which a three Judge Bench of the Supreme Court held that dis-honour of Cheque cases can be filed only to the Court within whose local jurisdiction, the offence was Committed; ie, where the cheque is dishonoured by the bank on which it is drawn.

SAINATH DEVALLA (LEGAL CONSULTANT)     07 May 2015

 

Jail term if cheque bounces because signature differs

Next time you write a cheque, double rather triple check the signature. Dishonouring of a cheque due to a signature mismatch — with the one submitted as a specimen to the bank — can now invite a prison term and a hefty fine.

The Supreme Court has ruled that a mismatch of signatures will be treated on par with insufficiency of funds, “payment stopped” and “closure of account”, which are offences under Section 138 of the Negotiable Instruments Act, 1881, in case a cheque bounces.

“So long as the change is brought about with a view to preventing the cheque being honoured, the dishonour would become an offence under Section 138…” a bench of justice TS Thakur and justice Gyan Sudha said.

In such cases, the account holder — as required under the act — must be given a notice and an opportunity to arrange the money before the launch of criminal proceedings, the court said.

Section 138 makes a cheque-bounce offence punishable with two-year imprisonment and fine that can be double the cheque amount. The ruling is likely to burden the justice system, particularly the magisterial courts. Introduction of Section 138 in 1988 had led to 25 lakh cases being filed, a government report in 2008 said. 

The SC set aside the Gujarat high court's ruling that criminal proceedings could be initiated if the cheque was dishonoured because of lack of enough funds in the account or the amount exceeded the money available in the account.

ADVOCATE TRILOK (CRIMINAL family PROPERTY topfreind@gmail.com )     08 May 2015

The bill to change the cheque law for jurisdiction has been introduced in PARLIAMENT on 7th May but still it is long journey.

 

It has to be passed by both houses and than it will go to the President and even after that the Govt will notify the date from when it should be  implented.

Jeetender Gupta (Advocate)     09 May 2015

To avoid any miscommunication, as of date the Dashrath Rupsingh judgement stands. Cases will be filed in the jurisdiction of bank from where cheque issued. Cabinet approval cannot change the current situation. It shall continue till the parliament amends the Act. Also it would be interesting to note whether it would have prospective effect or also retrospective leading to yet another transfer of cases exercise from one court to other.

ADVOCATE TRILOK (CRIMINAL family PROPERTY topfreind@gmail.com )     09 May 2015

Yes as of now the DASHRATH PATIL  citation is applicable.

 

The new proposed amendment does not provide for earlire cases but certain new provisions have been added as below:-

The Bill provides for filing of cases only by a court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment, is situated. Further, where a complaint has been filed against the drawer of a cheque in the court having jurisdiction under the new scheme of jurisdiction, all subsequent complaints arising out of Section 138 against the same drawer shall be filed before the same court, irrespective of whether those cheques were presented for payment within the territorial jurisdiction of that court. Further, it has been provided that if more than one prosecution is filed against the same drawer of cheques before different courts, when this fact is brought to the notice of the court, the court shall transfer the case to the court having jurisdiction as per the new scheme of jurisdiction.

 

LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases. lawproblems@gmail.com)     14 May 2015

Parliament has passed amendment in cheque law yesterday restoring pre DASHRATH PATIL judgment situation that is cases can be filed where the cheque was presented for clearing.

LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases. lawproblems@gmail.com)     27 May 2015

The law as passed by the PARLIAMENT for cheque cases has completely nullified the DASHRATH RAHOD case and provided jurisdction at the place where cheque is presented .

 

It is applicable for earlier cases also so when it becomes law there will again be massive transfer of cases.

MPS RAMANI (Scientist/Engineer)     27 May 2015

The author of the post does not appear to have asked any question regarding jurisdiction. According to recent Reserve Bank instructions cheques with alterations even with full signature of the drawer of the cheque are not to be accepted by banks. Some persons may have difficulty in signing as per specimen signature with the Bank. Whatever may be the reason for rejection of the cheque, Section 138 has an in-built provison to check the sincerity of the person issuing the cheque. He has to be given an opportunity to pay the amount by sending a notice. Mention in the notice that another personal cheque will not be accepted and that the person should pay the amount by cash if it is less than Rs.20000/- or by banker's pay order or demand draft only.

MPS RAMANI (Scientist/Engineer)     27 May 2015

Try to settle without going to court. Going to court can take ages for you to get the money.

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.

Related image

 

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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