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Abhishek Kumar (Vusiness)     21 December 2014

Father died after issuing a cheque to a third party

Hi All,

 

Greetings!

 

My father issued a blank cheque to a person and did not mention the date. Last year my father died. We went to bank and ask the bank to close the account. The bank first stopped all the previously issued cheques and closed the account. The property in the name of my father has been transferred in my mother's name.

Now what will happen if the person deposit the cheque in my father's account given the fact that cjeques are stopped and the account had been closed. He died two years ago,

 

Kindly let me know the legal aspect of this as that person is saying that he does not have that cheque...he says he misplaced that. If he deposit the cheque and want to initiate a legal action...what are the liabilities for me. Please note that my father did not mention the date on that cheque and he can mention any amount as it is a blank cheque. I inherited a house in a small city and 5 acres of land in village. 

 

Best regards



Learning

 37 Replies

venkat subbaiah (ADVOCATE ASSOCIATE)     21 December 2014

Sir, three things you should know in this regard:

A Cheque is valid only for a period of three months from the date of issue and after that it is invalid though deposited in bank.

Liability of person after his death extends only to the extent of the property standing in his name.

When an account is closed by a bank then it cannot issue return memo that is required for the purpose of filing  a Cheque bounce case because the relationship between the banker and the customer comes to an end by closure of the account. 

Abhishek Kumar (Vusiness)     21 December 2014

Thank you Venkat.

I forgot to mention that my father did not mention the date on that cheque. Could you please let me know what if he writes date of today and then deposit to my deceased father's closed account. Also the property has been transferred in my mother's name.

 

Best regards

bbratnam (nill)     21 December 2014

Even if not mentioned the date...
He died about an year ago..
The validity of the cheque is 3 months as per Negotiable Instruments Act..

He should withdraw the amount within 3 months. After that period that cheque will equal to a plain paper.

As your father died year ago, the liability period of the the cheque is 6 moths from the date of the death of your father.

That was already expired.

No Need to worry.

venkat subbaiah (ADVOCATE ASSOCIATE)     21 December 2014

Sir,

If the person deposits the Cheque by mentioning current date then the Cheque gets bounced for the reason "closure of account". 

A case has to be instituted before a court i.e., Cheque bounce case and it is a criminal case. But remember a criminal case cannot be instituted up on a dead person. However, a criminal action/personal liability ends with the person itself.

So in your case, no possibility of instituting a Cheque bounce case against your father.

Suppose he will institute a civil case against you for your father's liability and in such case there is a pious obligation upon the son to clear the father's liablitiy and it is limited to the extent of property inherited by you from your father. Even in civil matters cases cannot be instituted against the persons who are dead. Legal heirs liability is limited to the extent of the property they inherit from the deceased person.

bbratnam (nill)     21 December 2014

As you expressed
if the person filed a civil suit for cheque bounce,

You can argue that the said cheque is a forged one and

You can initiate the criminal actions as per the Indian Penal Code against that person.

Am I Correct Mr. venkat subbaiah ??

venkat subbaiah (ADVOCATE ASSOCIATE)     21 December 2014

Originally posted by : bbratnam

Even if not mentioned the date...
He died about an year ago..
The validity of the cheque is 3 months as per Negotiable Instruments Act..

He should withdraw the amount within 3 months. After that period that cheque will equal to a plain paper.

As your father died year ago, the liability period of the the cheque is 6 moths from the date of the death of your father.

That was already expired.

No Need to worry.

Abhishek Kumar (Vusiness)     21 December 2014

Hi Venkat,

 

Thank you for valuable insight. One more query. We received a house in a small city from my father. Apart from that we also received one car and 5 acres of village land.We have paid the amount to that person. It was approximately 8 lacs and we paid that all.

 

Then how will the court decide the worth of my property (house) if the that person files a civil law suit. He will not go to court bust I am asking if he goes. The cheque was a blank cheque just with my father's signature. he can mention any amount. In that case what are the legal options.

 

many many thanks.

 

Best regards

venkat subbaiah (ADVOCATE ASSOCIATE)     21 December 2014

Mr. Ratnam

Cheque bounce case and civil suit are two different things. Arguing as a forged one is out of question sir because on whom you will institute a case? When the person is not in existence then how can you think of criminal liability on his part? forgery under the IPC also is a criminal proceeding. I think you got me.

bbratnam (nill)     21 December 2014

To whom you paid the said amount??

Abhishek Kumar (Vusiness)     21 December 2014

I think Mr Ratnam is saying to initiate a criminal proceedings againts the third party who if iniate a legal law suit againts me. 

 

 

Originally posted by : venkat subbaiah


Mr. Ratnam

Cheque bounce case and civil suit are two different things. Arguing as a forged one is out of question sir because on whom you will institute a case? When the person is not in existence then how can you think of criminal liability on his part? forgery under the IPC also is a criminal proceeding. I think you got me.

Abhishek Kumar (Vusiness)     21 December 2014

Originally posted by : bbratnam

To whom you paid the said amount??

The third party who had my father's cheque. We have paid and he is satisfied but did not retun the cheque. 

bbratnam (nill)     21 December 2014

To whom you paid the said amount??

venkat subbaiah (ADVOCATE ASSOCIATE)     21 December 2014

Sir,

You said that you paid the amount to that person. who is that person, is it the bearer of the Cheque?

If it is the bearer of the Cheque then you can prove valid discharge of the debt obligation if have evidence of paying off Rs. 8 lakhs to him. Still the Cheque in the hands of that person holds good until you dispose it of in a proper manner. Bearer Cheque is always a risk upon our head sir. 

also please check whether the debt owed by your father to the bearer of the cheque is within the limitation. If the Debt is not within the limitation then it is a time barred debt and a time barred debt cannot be enforced in a court of law.

bbratnam (nill)     21 December 2014

As you mentioned Validity period of a Cheque will be counted from the date mentioned on the Cheque. The diseased person should have issue that said cheque before his death. How any one will claim that was issued recently after the death of the A/C Holder?


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