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Ramesh   08 May 2021

Cheque returned with a reason that "cheque unusable"

Dear all,

       I lent 6.5 lacs money to a person (through transfer).He gave me a blank cheque on 31/12/2021 and asked me to provide 4months time after that present the cheque with interest.

       On 12/04/2021 by filling the empty columns by calculating interest as on date presented the cheque.but the cheque returned with the reason that "cheque unusable".After that i approached him for enquiring about the dishonor of cheque but he replied very rashly.I enquired in the bank also regarding his branch about the dishonor that they replied three months back he gave instructions to stop payment of  9 cheques with a reason that the cheques are destroyed(lost).

       After that i sent a legal notice to him. But in the reply he mentioned that i & another 2 did finance business along with the cheque issued person. Due to covid-19 we got loss in our business so we are pressuring him to pay the amount (i dont even know the other person names) and we collected  empty 10 cheques,10 promissory notes & 10 bond papers from him and threatening him by presenting them in the bank. So he need not pay any amount to me.

      my doubt is he intentionally cheated me and another 2 persons also. How could i prove this in the court and i dont have any relation with the other documents mentioned in the reply notice.

      can any one suggest me the best solution for this. iam attaching the reply notice below.

Thanks in Advance


 9 Replies

Sankaranarayanan (Advocate)     08 May 2021

  You saying you have strong proof of money transaction. Before sent the notice you had any written communication regarding to demand the said money? if then you can initiate action by case either by civil or by criminal or both .You consult your lawyer and act according the scenario

1 Like

Ramesh   08 May 2021

but he included me another 2 persons even i dont know their faces

ganesh ns   09 May 2021

It is a clear case of cheque fraud falls under section 138 of Negotiable Instruments Act.
since the amount was transferred through electronic form he cannot refuse it.
ignore his reply notice, you send a demand notice and file a case u/s 138. He will come for a compromise.

Dr J C Vashista (Advocate)     09 May 2021

The cheque is stated to have been issued on 31.12.2021, is it post-dated ? If so, how did the bank accept ?

There are about 21 reasons for return of a cheque by the bank duly dishonoured, whereas "unusable" reason is not there, as stated by you. Please recheck.

Show the cheque and bank memo with all relevant documents to a local prudent lawyer for appreciation of facts. documents, professional advise and necessary proceeding.

G.L.N. Prasad (Retired employee.)     09 May 2021

There is no such reason for the return of the cheque "unusable" as known to me.  The proper way is to approach the bank that returned the cheque and seek their correct reason.  It appears to me that a non-MICR cheque was issued and as per the digital system, such cheques are not processed in the clearing.  Immediately, you have to visit your own banker and ask them to present the cheque directly out of clearing as a Local cheque for collection.  There is no such law that prohibits another bank from presenting the cheque directly, and it was a practice for hundreds of years before the advent of digitalization.

1 Like

Hemant Agarwal ( Mumbai : 9820174108)     09 May 2021

AGREE with above Expert Views.

Keep Smiling .... Hemant Agarwal 

Advocate Bhartesh goyal (advocate)     09 May 2021

Yes,it is correct that dishonour of cheque due to reason " unusable " is no ground to dishonour the cheque besides the above reason after receiving the notice u/sec 138 ( b ) of N.I.Act why didn't the drawee comply with notice? Cheque return due to any reason comes under the purview of sec 138 of N.I.Act. so I will suggest you , file complaint before court having jurisdiction.

1 Like

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     09 May 2021

  1. When you lent Rs. 650,000/- What were the document/s you had taken duly signed by the other person and the document is properly stamped?
  2. On whose account the blank cheque was given to you. Did you verify the signature on such cheque with the signature on the document signed by him to take the loan from you?
  3. The dates in your query are all post-dated. How come the cheque was presented with such post dates?


T. Kalaiselvan, Advocate (Advocate)     11 May 2021

It is a clear cut case of cheque dishonor. 

The dishonor of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both.

A Magistrate can take cognizance of an offence of dishonor of Cheques under Section 138 of the NI Act only on a Complaint from the holder in due course (in this case the person in whose favour the cheque was drawn).

You may not worry about his reply to yor legal notice.

You have a cheque issued by him which since bounced, hence you may proceed with the cheque dishonor case under section 138 NI act. 

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