ajay kumar (unemop) 13 August 2008

cheque return

i take pl from one mnc bank in India.due to money crisis i not able to pay my emi regularly, now bank used my security cheque for payment of pl and that cheque return due to "stop payment".now what can i do.

sir bank not give me any loan recall notice etc....but they used my security cheque for full amount of loan.can they present security cheque for full amount or JUST EMI AMOUNT DUE ON EMI.

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11 Replies

Srinivas.B.S.S.T ( Advocate) 13 August 2008

Sir the bank can initiate legal
proceedings aginst you under section 138 and 142 of NI Act. Issuance of
cheques is not a childs play now a days.

ajay kumar (unemop) 14 August 2008

thanks for reply sir,that exactly i want to know if i taken a loan and my 10 emi due....then bank only use my security cheque for up to rs. 50000.00 only they can not used that cheque for 1 lac or 2 lac.

if bank give recall notice then i think they can ask full loan amount and they can use my cheque for full loan amount due.but without recall notice they can do that?

Srinivas.B.S.S.T ( Advocate) 14 August 2008

I have replied to this query in the experts zone already

Kanhaiya Singh (Advocate) 15 August 2008

Bank cannot initiate a legal proceeding in ur case as per rulings of the SC.

J. P. Shah (RTI & CONSUMER ACTIVIST) 15 August 2008

Shri Singhji, Can U pl give gist of SC ruling?

Kanhaiya Singh (Advocate) 15 August 2008

Sir,the SC held in Criminal Appeal No. 1012 of 1999 ( M.S.Narayana Menon @ Mani V/S State of Kerala & Anr. ) on 4.7.1999 that Where a cheque has been issued by way security or for any other purpose,it would not come within purview of sec.138 of the N.I.Act.

lawyers friend (na) 15 August 2008

A cheque issued as a security would not come within

the purview of S. 138 of Negotiable Instruments Act

In Narayana Menon v. State of Kerala, Cr. App. No. 1012 of 1999 the Supreme Court ruled that a cheque issued by the accused as a security to the complainant would not come under the purview of S. 138 of N.I.Act.

In this case the appellant took the stand that nothing was due and the cheque in question was issued by way of security. This was held to be probable. If the defence is acceptable as probable the cheque cannot be held to have issued in discharge of debt. The accused discharges the burden of proving his case by making the defence acceptable as probable. (M.S.Narayana Menon @ Mani v. State of Kerala & Anr. Criminal Appeal No. 1012 of 1999 decided on July 4, 2006)