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If cheque issued by a guarantor is bounced, proceeding under

 

If cheque issued by a guarantor is bounced, proceeding under S.138 of NI Act vis-a-vis a guarantor is maintainable.

 

 Precisely enough, following legal position emerges from the rulings cited by the respective counsel :
(1) It is open to a person to sign and deliver a blank or incomplete cheque and is equally open for the holder to fill up blanks and specify the amount therein. This does not amount to any alteration in the cheque if the cheque was not initially signed and issued for any different specified sum which was changed. When a drawer of a cheque delivers a signed cheque, he gives an implied authority to the holder to put a date of his choice.
(2) Liability of the guarantor is co-extensive with the borrower and if the cheque issued by a guarantor is bounced, proceeding under
Section 138 of the Negotiable Instruments Act vis-a-vis a guarantor is maintainable.
(3) If the cheque is handed over representing that at the eventuality of failure to repay loan within the stipulated period it could be encashed, it cannot be said that the cheque was issued representing security and not liability.
(4) Presumption mandated by Section 139 of Negotiable Instruments Act includes a presumption that there exists a legally enforceable debt or liability. However, such presumption is rebuttable in nature. When an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which 


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 2 Replies

madhu mittal (director)     24 May 2013

Thanks for giving so valuable knowledge and citation on this sight. But I am unable to open website given below of your para. Let me know, whether there is a problem in my computer or sight can not be opened at all.

MARU ADVOCATE (simple solutions for criminal legal problems -- yourpunch@gmail.com)     25 May 2013

Though the citation covers 1) blank cheque 2) security cheque issues but main thrust is on SECONDARY EVIDENCE and very good citation on this issue.

 

Good work, pl continue.


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