Arif Iqbal (Advocate) 09 June 2010

Multiple Cheque Bounce (Quite a mesh situation)

Learned Forum member, please send some guidelines for me to institue a case u/s 138 NI Act. The circumstance is as follows:

1) 'A' is a general power of attorney holder of a partnership firm 'P & Co'.

2) 'B' & 'C', (father and son) are a customers of P & Co.

3) Due to business transactions, C (who is the son of B) owed an amount of Rs. 3,50 lacs to P & Co.

4) C also took a personal loan of Rs. 1,00,000.00 from A. B took a loan of Rs. 50,000.00 from A.

5) Thereafter C issued cheque of Rs. 5,00,000.00 (3.50 + 1.00 + 0.50) in favour of A, which got dishonoured. Notice was issued.

6) Then B - the father of C, came and made a part payment of 30,000.00 and issued a cheque for balance amount. This was also dishonoured. Notice was issued to the father.

Now please guide me through the institution of the case u/s 138 against the father. The cheque was issued in discharge of personal as well as business liabilities. Business liability was toward the firm and personal liabilities was towards the Attorney.

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3 Replies

RAKHI BUDHIRAJA ADVOCATE (LAWYER AT BUDHIRAJA & ASSOCIATES SUPREME COURT OF INDIA) 09 June 2010

Dear Arif Ji,

Plz. tell me when you issued the legal demand notices to B & C. I mean to say on which date.

YOGESHWAR. (ADVOCATE HIGH COURT-criminal /civil -youract@gmail.com) 09 June 2010

Issue notice to both and file case u/s NI 138 and IPC 34. In most of the cases of NI act due to carelessness of the accused and his advocate the cases are decided against the accused.

We have all the sympathies for the accused since in most of the cases loan sharks take advantage of the provisions. The hands of courts are tied since they can not go beyond the evidence on record and result of cross examination.

It is our humble submission that there are number of safeguards in the law and any accused of the NI 138 cases can be discharged without much defficulty. The cross examination is biggest tool in the hands of the defense advocate and through this medium any case of NI 138 can be easily ,we say very very can be demolished.

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Arif Iqbal (Advocate) 09 June 2010

Dear RAKHI BUDHIRAJA

The first notice was sent to C within 15 days of the knowledge of dishonour. After recieving the notice, the father - B, came and paid the 2nd cheque and Rs. 30,000. The second cheque issued by B was dated 46 days later. When it was presented, it also got bounced. Thereafter the 2nd notice to the father - b was issue within 3 days of its dishonour.