cpc

parallel proceedings under any other law after arbitration


Can an NBFC intiate proceedings under any other law ( eg 138 of NIA) after it has already initiated proceedings under the Arbitration Act for recovery of the same loan ?

 
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advocate

Proceedng u/s 138 N I Act is initiated against an offence commited by a person. Please see section 138. Relevant portion is "Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of maoney to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence ......."

 

And "initiated proceedings under the Arbitration Act was for recovery of loan. While initation of Proceedng u/s 138 N I Act is for commisson of an offence and this is a quashi-criminal proceeding nothing to with proceeding under A & C Act 1996.

 

Hope you have got your answer.

 

Mintu

 
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thanks for the reply mintu. if parallel proceedings are going on, then will it not amount to recovering the money twice from a person ? besides, will a person not wait for either of the proceeding to get over before making payment thus delaying the whole process.

 
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advocate

There is not parallel proceedings are running in your case.

Sorry but you are not understading the issue well, "initiated proceedings under the Arbitration Act was for recovery of loan" but "Proceedng u/s 138 N I Act is not for recovery of loan rather it is for commisson of an offence as defined in section 138 N I Act. In other words committed offence is not keeping your bank account ready to honour the issued cheques. At the same time cheques must have been issued for payment of any amount of money to another person for the discharge, in whole or in part, of any debt or other liability. You are confused because proceedings under section 138 also has provisions for monetary penality besides jail term.

Hope you might have a bit of satisfaction.

 

Regards,

 

mintu

Hpe 

 
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