Reply to Sec 138 Notice

Dear Pooja,

In case your client has the intention to pay the cheque amount then the only modality is about the cost and time frame for the same.  Contact the bank in writing explaning the reasons for seeking enlargement of time and at the most the bank would impose certain new conditions like indemnity and security of the amount through guarantor.

Best Regards

Daksh

We have already written them formal letters seeking time and giving them schedules about our mode of payment. Now legally how do we reply to the notice seeking time atleast by a month or two.

looking at the bank situation, they are very reluctant to grant us any time anymore. now hopw o we reply to that notice seeking time. We shall make the payment by max one month

 Failure of the drawer to make the payment within fifteen days of the receipt of the payment
After the receipt of the above notice the drawer of the cheque has to make payment of said amount of money to the payee or to the holder in due course of the cheque within 15 days of the receipt of the notice. If the payment is not made after the receipt of the notice within stipulated time a cause of action for initiating criminal proceedings under this section will arise.

 As you mentioned earlier that they are very reluctant to grant you any time anymore . The Bank can file complaint any time against your client. If the payment is not made after the receipt of the notice within stipulated time. Its up to the bank to give more time.....Its not your right to seek more time.... So as Mr Daksh opined that your client ve to approach bank and request them to give 30 days time to refund the money.

I think the bank itself would not like to get involved in litigation once it is assured of getting its money back. Before 138 is slapped, try to manage funds, and pay up within the notice period. 

The bank would proceed with the case if the cheque amount is not paid as the NI Act with time restriction oriented.  If the stipulated time limit is barred, then the bank would not be able to file complaint under the provision 138.  Then, only option left to bank is to file money recovery suit.  For this reason, there is no possibility of your getting time extended.

On the other hand, you need not worry as there would be a lot time gap between lapse of 15 days statutory period and the summons being issued by the magistrate court.  Court process is not instantaneous and would take at least a couple of months.  Even if, the summons is issued, you will have the option to pay the cheque amount in the court.  It becomes inevitable for you to receive the summons as you are not in a position to pay the cheque amount immediately.  But, nothing to loose, you will not be prosecuted.

In the even of civil case, it drags on for years, you have plenty of time.  Any reply you give, time will not be extended by the bank.  

hi,if ur client want to avoid the judicial proceeding, than convience the other party and give them another cheque of future date.

 Even if, the summons is issued, you will have the option to pay the cheque amount in the court. If the complainant insists on proceeding with the case, then what happens? Is the discretion of the magistrate to drop proceedings?

Anil Sir,

Cause of action for initiating criminal proceedings u/s 138 of N.I. Act arises if the payment is not made within the stipulated time. Any payment made subsequent thereto will not absolve the accused of the liability of criminal offence, Magistrate has got no jurisdiction to drop the proceeding if payment is made in the Court and Complainant insists on proceeding with the case. At the most it can be considered as a mitigating circumstance while imposing sentence .

Grateful to Mr. Kuchhal.  I had posed in the context of 

Even if, the summons is issued, you will have the option to pay the cheque amount in the court.

I knew that criminal proceeding cannot be dropped just like that.

Thank u all for those options........am trying my best to co-ordinate with the bank and seek time. May be am trying an option of giving a schedule of making payments. I hope they consider it!!!

Thank u all for those options........am trying my best to co-ordinate with the bank and seek time. May be am trying an option of giving a schedule of making payments. I hope they consider it!!!

Giving in writing and accepting that the cheques are bounced is accepting guilt. Always avoid commitment in writting.

There are various faults the banks do while filing 138 cases and if you are unable to pay just waif for court summons and play the game.

It is just possible to make the complainant in 138 cases to dance to your tunes if you have guts.

Please not the law does not work as formulas or exact mathamatics , every situation can be twisted in the favour of the accused.