Criminal Trident Pack: IPC, CrPC and IEA by Sr. Adv. G.S Shukla and Adv. Raghav Arora
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satish (ssm)     19 July 2012

Cheque bouncing

Hi, one of my friend has taken a loan from an illegal money lender for purchase of home. he had taken Rs. 5 lakhs in cash but the agreement and cheques was of Rs. 7.5 Lakhs.

Now the money lender has presented the cheques and they are dishonoured due to insufficient fund he had filed a case against my friend.


Does there is any law to protect from illegal money lender.


 12 Replies

Adv Rohit Dalmia 9324538481 (Lawyer)     19 July 2012

Dear Satish,


As you have said there was an agreement of Rs. 7.5 Lakhs and also cheque of such amount was given. therefore, prima facie it is clear there is an admitted liability of Rs. 7.5 Lakhs and your friend is liable for the same.

Now Let me know whether your friend had issued any receipt issued for  taking Rs. 5 Lakhs in Cash from the Money Lender which was duly acknowledged by the money Lender????

Where the case has been filed??? Have your friend appointed any lawyer???

In case you need any legal assistance you may call on 9324538481.



Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     19 July 2012


A Cheque bounce case normally takes an average of one year to complete the proceedings before trial court. The following are the important stages in a cheque bounce case.

1) Filing of complaint: The complaint need to be filed before the jurisdictional magistrate within 30 days from the accrual of the cause of action. The complainant need to be present before the magistrate at the time of filing. The original documents need to be shown to the magistrate. If prima-facie a case is made out, the magistrate will post the matter for sworn statement.

2) Sworn Statement: At this stage, the complainant needs to enter the witness box and give further details regarding the case. If the magistrate is satisfied that there is some substance in the case of the complainant, then he will issue a summons to the accused.

3) Appearance of Accused: On receipt of summons, the accused need to appear in the court. If he does not appear in the court, the court will issue an arrest warrant against him. After appearance, the accused is supposed to take a bail from the court with or without sureties. If the accused is unable to furnish a surety then he can deposit a cash security, instead of surety. This cash security is refundable to the accused after the conclusion of the case.

4) Recording of Plea: In the next stage, the court will ask the accused as to whether he has committed the offence or not. If the accused admits the guilt, the court will immediately give him punishment. If he pleads innocence, the court will post the matter for evidence.

5) Evidence: The Complainant has to furnish his evidence, normally by way of affidavit; this is known as examination-in-chief. He needs to produce all documents in support of his case like bounced cheque, dishonor memo, copy of notice etc. Later complainant will be cross examined by the accused. If there are other witnesses in support of the complainant, then their evidence also has to be recorded.

6) Statement of the Accused: After the Complainant side evidence is over, the court will put some questions to the accused regarding his guilt. An accused needs to give his version to the same.

7) Defence Evidence: After the Accused statement the court will give an opportunity to the accused to leave his evidence. The accused can also produce documents in support of his case, as well as witnesses in his support. Accused and his witnesses will be cross examined by the complainant. After this, the case is posted for arguments.

Arguments: Both the Complainant and the accused will submit their arguments before the court. They can also furnish judgments of high courts and Supreme Court in support of their case. Normally a written argument containing a gist of the oral argument is also furnished to the court.

9) Judgement: After the arguments, case is posted for judgement. If the court finds that the accused has committed offence, he will be punished with fine or imprisonment. If he is innocent, the court will acquit him. If accused is convicted, then he needs to suspend his sentence, for a period of 30 days with in which time, he can file an appeal before the sessions court.

R Trivedi (     19 July 2012

Does there is any law to protect from illegal money lender ??


[Protection against what:  that he should not give money or  that he should not claim back his money ??]


You have admitted that Money was taken as loan, now how come the money lender which was saviour at that time has become illegal ?? It is your right to defend yourself on the valid grounds, it is also illegal on the part of lender to extort money, but it is perfectly legal for any one to recover his due money in lawful manner.


Although S.138 is not for recovery, but is being used for the same. There is no illegality in giving friendly loan and there is no illegality in filing the case u/s 138 if the cheque issued against such loan gets dishonored.


But in some cases relief was granted to accused looking at the totality of the matter, in your case from the facts above it looks difficult.  

satish (ssm)     19 July 2012

Hi there thanks for the reply. what I want to know is

1. The money lender who has given money doesnot have a licence for money lending.

2. The money lender also do not have that much white money in his accounts which he had given to my friend.

3. The purpose which is shown is agreement is to buy a home which was purchase in june 2010 and agreement was made on january 2012.

4. The property was bought on bank finance by my friend and his spouse and the registry was done in his spouse name.

5. The witness in the agreement were the driver and employee of the money lender.

Can you now tell me if there is any solution in this case so that my friend will be free in some matter.

and till date my friend has not appointed any lawyer he is absconding from the fear of warrants issued against him please reply so that we can further discuss the matter.

shamina sayed (Advocate)     19 July 2012

any person doing money laundering busines without holding valid money laundering license is illegal.For cheque bounce case ,it has to be legal and enforceable liability only then the complainant will win the case.otherwise the accused has to be acquitted.tell your friend NOT to avoid trial of court.

R Trivedi (     20 July 2012

Your friend must not abscond. An ordinary citizen cannot run away from courts, he has to face the trial. Courts have been  accepting the plea of friendly loan, so it is not a blanket assurance that the complainant does not have any license, he does not have any case. Outcome of the case cannot be decided based on this fact alone.

LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases.     20 July 2012

Ld freind Rama chery has given all the steps in court at length.


The person need not worry, appear in court and defend the case. Let the complainat prove that

1)  he had money in his account 

2 ) how and when the payment was your freind.

good case to win.

CA. Vikash Dwivedi (Chartered Accountant)     20 July 2012

We are looking in to the case as illegal since the lender does not have any money lending licence. If we refer Income tax act housing loan can be taken from Frined or relative and the act is silent on license for money lending. Had it been illegal IT act must have mentioned the lender must hav license. 


i belive the lender might have mentioned as friend.

If the lender is doing money lending 'Business' then of course he needs license. you need to figure out was it one off case of money lending to you/ your friend or regularly he does money lending. if this is his business thne it is illegal. 

R Trivedi (     21 July 2012

Very rightly said by CA Vikash, in general all such complainant will say that he has given the friendly loan and in discharge of this loan, the cheque was received. He may lie on following accounts:


1. Cheque could have been blank at the time of delivery, but complainant may claim it was PDC or.


2. Cheque could have been given blank long ago and complainant may claim that it was given recently as per the date of cheque. 


3. Cheque issued prior to date of agreement or prior to loan taking, but claimed differently.


One thing we must understand that in criminal cases court will go as per the act and evidence, which may not be the truth in real sense. For example in this case loan was taken, liability is present, but there would be so many defense points by which accused can come out, a single substantial lie by the complainant and accused is out of clutches. But this kind of gamble on technicality is very risky if genuine liability is present. For example in this case if by mistake complainant states that he was in the business of money lending and he has no license, then it is a good defense for accused. Moreover if complainant fails to prove his financial strength, then also accused is quite on solid grounds. But in all such grounds the onus is always on the accused to give evidence firstly how the cheque went to the hands of complainant and secondly non presence of legally enforceable liability. This is tought call when liability is present with some agreement on paper.


satish (ssm)     22 July 2012

Thanx for the solution given by you. Let me know that if my friend do not want to go to court can he authorise any advocate to go on his behalf and defend with all the facts my friend will give to him?


Also may I know what is the maximum punishment and fine in this case the court can impose on him.



Again u r comming to the starting point.How do you expect the case to conclude without the presence of the accused,during trail.A lawyer acts only on behalf of the accused to defend the case legally.Punishment and fine is the discretion of the judge depending on the velocity of the offence committed by the accused.

LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases.     01 October 2012

Yes it is possible provided stakes are high so that legal expanses for going to various legal  forum can be born by the accused.




1)    All the facts do not come on record  that why the cheque was bounced so we help the cheque bounce victims to come out from the legal action .


2)    The complainant and their Advocates as a rule make many mistakes in over confidence and it is perfectly legal to take its advantage by the accused.


3)    But if such mistakes are pointed out on day one normally it is rarely appreciated .


4)    So we put attention on various other related  legal issues to divert attention and illicit admission by the complainant prior to cross.


5)    In the process most of the attack routes are closed for the complainant and at this stage we present our final defence and win the case hands down.


6)    Such strategies differ from case to case and can be advised after going through all the papers. You can take guidance from various cases where such methods are successfully used.

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