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mylove1278 (jjgjgjg)     28 July 2011

False implication in 138 ni act

I am trouble.I had issued a cheque of my own company to someone signed by only me not by second director.

The person whom had issued the cheque has filed a 138 Ni act case.

We didn't had any agreement between the company and him and he didn't deliver any kind of service to us and we stopped the cheque also.
So would this come in false implication or we need to pay him.


Can we get this quashed with these arguements or not ? what about the second director.Has he escaped from this without signing though its comapny cheque and he is second director ?



Learning

 17 Replies

THANKACHAN V P (Advocate & Notary)     28 July 2011

1.138 will stand against only against the person who signed the cheque. 

2.Complainant should prove that it is a legally enforceable liability.If you can prove that no service is rendered to you  then the case will go.

3.Chances are rare to quash the proceedings better to contest

 

SANTOSHSINGH. (ADVOCATE sardarsena@gmail.com)     29 July 2011

 

It is easier for any accused of Ni 138 case to come out of it since it is very difficult for the complainant to prove his case but you have to face trial , once court notice is issued no quash is possible even at higher court. , unless you are ready to go up to SC.

PEOPLE LOOSE BECAUSE OF CARELESSNESS FROM BEGGINNING. THEY WASTE INITIAL TIME  IN TAKING DATES ONLY. YOU HAVE TO INITIATE  PROPER  ACTION FROM DAY ONE WITH EXPERT LEGAL ASSISTANCE THEN WINNING THE CASE WILL BE EASY, SIMPLE AND SURE.

So complainant need not be over confident , it will be next to impossible to win any NI 138 case if contested aggressively by accused  from day one since the case has to be proved beyond doubt.

So even if the presumptions are there in NI ACT the accused has legal right to rebut them which is more simple , sure and easy.

mylove1278 (jjgjgjg)     29 July 2011

person didn't have any written agreement with company.So Company can deny that it has taken an kind of service.Since he has to prove it with black and white proof. Isn't it ?

 

we stopped his payment because he was not eligible for the amount and he didn't offered any service to us.

 

So would the case be in comapny favour or not ?

SANTOSHSINGH. (ADVOCATE sardarsena@gmail.com)     29 July 2011

If court notice is recieved appear in the court and there are very simple sure methods to come out of it.

mylove1278 (jjgjgjg)     29 July 2011

So what should be our approach after appearance and what is probabilty of being convicted and imprisonment in this scenerio where person  owe 70k only and he didn't have any written agreement to prove that.

Hemant Agarwal (ha21@rediffmail.com Mumbai : 9820174108)     04 August 2011


1.  The question that will arise in the court is "for what purposes did you issue the cheque to the complainant" , which was typically filled in your own handwriting and signature (Date, name, words, figure)


IF you have the answer to the above, THEN you can chose from the following answers, to rebutt the complaintants claim :


a) that the cheque was stolen, hence isssued stop instructions to the bank
b) that the cheque was issued under threat, hence isssued stop instructions to the bank
c) that the cheque was issued as a security cheque & that work got cancelled, hence isssued stop instructions to the bank
d) that the cheque was issued as a advance cheque & that work got cancelled, hence isssued stop instructions to the bank
e)  and so on ....


2.  There is no liability of the second director, who has not signed the cheque, unless of course the complaintant has included the second directors name in the plaint u/s 141 of the N.I.Act (and proves it as being joint in-charge at the time of issuance of cheque)


3.  It is upto the complaintant to prove the service / work that he has done and claim that the cheque amount is a genuine and a "legally enforcable debt / liability" due to him, from you.


4.  It is "not always"  necessary to have any agreement etc.... for the cheque amount.  There are lots of services wherein prior agreements are not made, for eg. legal services, plumber services, painting services, hire-a-taxi services and lots of so on's ....


Keep Smiling .... Hemant Agarwal

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     04 August 2011

For that need wsait till the trial , take action  for prempt the  complaint.

mylove1278 (jjgjgjg)     25 August 2011

Hi All ,Now i came to know that the person has made false story regarding that company cheque that I took 2 lakh from him on personal friednship basis and i revereted him some 1,30 000//- thorough varoius meansand for rest amount i gave him company cheque.which got bounced and stopped twice repectively.

would the below points stand on my behalf.

if this was the personal amount how can he take company cheque and he serve notice at company address and i didn't recive any of the notice.

Cheque was signed by me but his name and ac/payee was written by someone else.So Cheque was not issued to him as I didn't write his name.May be i lost the cheque.


how can he lent 2 lakh amount on personal basis though he is working and not any financial firm.


Now i want to tell you that acknowledgement of the summon which i had recieved didn't reach court on/before the specified date mentioned in that.So it nullifies the summon.New summon would be issued ?

Please advice me on this...

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     26 August 2011

It does not nullify the summons appear on next date or NBW  will be issued.

Ricky prasad (proprietor)     26 June 2012

Dear sir,

person who was with me a long time he has missued my blank signed cheque and send me notice demandind Rs 1,00,000/-  saying that supply of Raw material notice was issued  as of first time i had not replied notice answere hence the case was of 2006 in his examition he dont remember my company have nor he did not know the supply of material time, date even yearbut under 313 false state ment has been recorded and conviction was passed by lower court sating compansation of re 1,10,0000/- and 2 months jail and i appeled in session court on dt 4th of june session court has again convicted me with the same order and i was put behind the bars at the time when im was in jail my family apporoched to complainant he demanded 1,60,000/- in front of the high court

and now i am out of jail so by time to time ego is hurting me and even i has been harrasssed by my relations people hence i would like to know is there is any way to teach a lesson on legall basic kindly help me the way out please

Ricky prasad 

LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases. lawproblems@gmail.com)     26 June 2012

You have not contested the case properly in lower court.

Lower court evidence is important and if you miss higher courts can not do much.

However if you can show all documents and if there is some missing flaw, you can use it.


(Guest)

First and foremost thing to be understood is what was the transaction for which the cheque was issued by you. At his stage lets for get that the second director has not signed the said cheque.

If the said transaction for which the cheque was issued was not complied and fulfilled, there are judgments to that effect which say that cheque issued towards a contractual liability not completed by the drawee and in the circumstance of cheque being dishonored, does not attract 138 N I Act.

As you stated that you stopped the cheque, in such event first thing to be noted is that when you are stopping the payment of cheque the communication of the same is to be made to the drawee not to present the cheque in advance and simultaenously to your banker. It is as well necessary to be noted that when you are giving instructions to stop payment of the cheque issued the person issuing the cheque should have the amount for which cheque was issued in his account so as not to attract the provision of 138 N I Act.

As regards the liability of the director who has not signed the cheque, the said director cannot be held responsible for any legal enforciable liability.

1 Like

(Guest)

First and foremost thing to be understood is what was the transaction for which the cheque was issued by you. At his stage lets for get that the second director has not signed the said cheque.

If the said transaction for which the cheque was issued was not complied and fulfilled, there are judgments to that effect which say that cheque issued towards a contractual liability not completed by the drawee and in the circumstance of cheque being dishonored, does not attract 138 N I Act.

As you stated that you stopped the cheque, in such event first thing to be noted is that when you are stopping the payment of cheque the communication of the same is to be made to the drawee not to present the cheque in advance and simultaenously to your banker. It is as well necessary to be noted that when you are giving instructions to stop payment of the cheque issued the person issuing the cheque should have the amount for which cheque was issued in his account so as not to attract the provision of 138 N I Act.

As regards the liability of the director who has not signed the cheque, the said director cannot be held responsible for any legal enforciable liability.

As regards the subsequent part where you have stated that the said person has put a story that you borrowed some money and paid back a particular amount and for the remaining balance you issued cheque of your company. That, the person/complainant having gone to say that the amount was borrowed, now this issue can be looked at the time of cross examination.

At the time of cross examination you can take a defense and examine him on the issue of his bank account details, where from he got the money. Further you can ask him, if any agreement of hand loan was executed to that effect betwene you and the said person. You can ask him if not, in such event, has he produced any document showing that he paid an amount of rs.2,00,000/- to you, if not, has he informed the income tac authority about the hand loan and does the same reflect in his Income tax returns. You can ask him, whether he has filed any document to establish that on the date alleged when he gave you an amount of rs.2,00,000/-, he had that much balance in his account. If he got the said amount from any profits by sale of property, can he produce any relevant document to that effect.

The purpose of asking all these questions in cross examination is as Supreme Court delivered Judgments on the point saying unaccounted money: cheques issued: doesnot amount to dishonour of cheque and provisions of section 138 N I Act is not attracted.

Theres no point to panic about. 138 N I Act is specially a bailable offence. if you couldnt appear subsequent to acceptance of the summons, the court will issue bailable warrant and even if subsequent to the receipt of the same if you dont appear before the court, the court will issue non-bailable warrants. You can at any time in between before issuance of N B W, appear before the court, prefer application for taking case on board and along with the same prefer application for cancellation of bailable/ nbw and prefer application for releasing you on bail/ cash security.

1 Like

(Guest)

First and foremost thing to be understood is what was the transaction for which the cheque was issued by you. At his stage lets for get that the second director has not signed the said cheque.

If the said transaction for which the cheque was issued was not complied and fulfilled, there are judgments to that effect which say that cheque issued towards a contractual liability not completed by the drawee and in the circumstance of cheque being dishonored, does not attract 138 N I Act.

As you stated that you stopped the cheque, in such event first thing to be noted is that when you are stopping the payment of cheque the communication of the same is to be made to the drawee not to present the cheque in advance and simultaenously to your banker. It is as well necessary to be noted that when you are giving instructions to stop payment of the cheque issued the person issuing the cheque should have the amount for which cheque was issued in his account so as not to attract the provision of 138 N I Act.

As regards the liability of the director who has not signed the cheque, the said director cannot be held responsible for any legal enforciable liability.

As regards the subsequent part where you have stated that the said person has put a story that you borrowed some money and paid back a particular amount and for the remaining balance you issued cheque of your company. That, the person/complainant having gone to say that the amount was borrowed, now this issue can be looked at the time of cross examination.

At the time of cross examination you can take a defense and examine him on the issue of his bank account details, where from he got the money. Further you can ask him, if any agreement of hand loan was executed to that effect betwene you and the said person. You can ask him if not, in such event, has he produced any document showing that he paid an amount of rs.2,00,000/- to you, if not, has he informed the income tac authority about the hand loan and does the same reflect in his Income tax returns. You can ask him, whether he has filed any document to establish that on the date alleged when he gave you an amount of rs.2,00,000/-, he had that much balance in his account. If he got the said amount from any profits by sale of property, can he produce any relevant document to that effect.

The purpose of asking all these questions in cross examination is as Supreme Court delivered Judgments on the point saying unaccounted money: cheques issued: doesnot amount to dishonour of cheque and provisions of section 138 N I Act is not attracted.

Theres no point to panic about. 138 N I Act is specially a bailable offence. if you couldnt appear subsequent to acceptance of the summons, the court will issue bailable warrant and even if subsequent to the receipt of the same if you dont appear before the court, the court will issue non-bailable warrants. You can at any time in between before issuance of N B W, appear before the court, prefer application for taking case on board and along with the same prefer application for cancellation of bailable/ nbw and prefer application for releasing you on bail/ cash security.

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