Vishnu Kumar (0) 21 September 2014

Isseud a blank check

Hello All,

I recently purchased a new flat of Land Owners Share through a home loan. On the day of registration Land Lord demanded a blank cheque with no date and amount, but just signed by me as Security. He promised to return the cheque once my Home Loan Provider releases the outstanding amount. My Home Loan Provider released the outstanding amount and it also got credited into Land Lords account about three weeks ago, but now the Land Lord says that he has lost the cheque. When I demanded the cheque firstly he said it is with his business partner. I spoke to his business partner and he did say that it is indded with him and will be returned to me when the outstanding balance is cleared. I came back to Land Lord again and now he says he has lost the cheque and advised me to stop the cheque. I called up my bank and adv them to stop the cheque for which they charged appropriate fees. Now my question is:

Will this blank cheque pose me any threat in the future as there is no written aggreement between both parties. What will happen if my Land Lord fill up the cheque with any amount and date and starts demanding money. They are rich people and feel very insecure about the situation. Cant I do anything to make myself feel better and comfortable?

Please provide your valuable advice. I am very confused and disturbed.

Thank a million in advance.

Vishnu.

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4 Replies

Hardeep (Business) 21 September 2014

1) under law, stop payment does not remove liability. You could also lodge an FIR reporting the cheque as Lost and provide a letter to the bank accordingly. It could be of some help later. In fact, your landlord should file this FIR since the cheque was in his possession and give a copy to you.

2) get all the facts in writing from the landlord and send them in turn a letter / email reiterating them. If the landlord hesitates you would know his intentions.

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Anand Bali Adv. (Advocate Solicitor & Consultant) 21 September 2014

Dear Client,

You need not to worry at all, just send a letter to the land lord that he should send back your security cheque as total cost amount of the property is credited in his account by the Home Loan providing financial institution.

After sending the above letter where in specifically mentioning the words that it was a "security cheque", You can also direct the bank not to clear the cheque as "Stop Payment" instructions.

Here it is to note that at the time of issuing the cheque there should be no liability on your head; as the cheque should not be issued against any existing liability in other words and the cheque is issued only as a security cheque. The provisions of the Sec 138 NIA does not attracted against any security cheque please note. However he can put a simple recovery case against you or recovery suit under summery trials in civil court on liability grounds, if any..

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Hardeep (Business) 21 September 2014

Yes indeed S. 138 NI Act does not apply to cheques given as Security so solution as suggested is a way out, if not contested by landlord. Since he is already claiming cheque is lost if you can mention that and get his confirmation on that too your case is stronger IMHO.

otherwise, a prima facie case lies under S. 138 when a cheque bounces and decision taken per evidences lead by each party.

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T. Kalaiselvan, Advocate (Advocate) 29 September 2014

It appears you have requested the the return of blank cheque form your landlord only orally and not in writing. Now, you send a communication to him in writing requesting the return of your duly signed blank cheque held with him for the purposes of security for the release of loan amount due to him and since he same has been fully paid to him, he would return the cheque to you. You should send the request letter by registered post by retaining a copy with you. There should be a mention that you have already issued instruction to the bankers to stop honoring the cheque if presented since he had instructed you to inform your banker to stop payment. With this you can challenge his case any time in the future if he tries to sue with false case.