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saroop singh (gill)     15 July 2010

plz help me out friends

hello friends,

i entered into an agreement of sale with a company.The sale deed was registered on 08-04-2009.

I transferred the possession of the property on the registration of the sale deed.under the sale deed the company issued me three cheques  as follows 1) rs 300000 2) rs 1350000 3)rs 350000  dated 08-04-2009 to discharge a total liability of rs 2000000.on 08-04-2009 i presented the cheques in the bank for payment and got registered the sale deed in favour of the company and gave the possession of the property on 08-04-2009.however on 09-04-2009 i was shocked when i came to know that of the above mentioned three cheques only the cheque amounting rs 300000 was credited to my account and the remaining two cheques of rs 1350000 and 350000 were dishonoured stating funds insufficient in the account of the company .

thereafter i immediately approached the directors of the company for the payment due.they told me that by mistake the cheques got dishonoured come tomoorrow and take the amount ,when i went to them the other day they again told me to come after 2 days ,and thereafter they started ignoring me .Alas when i saw there was no way out i gave them a legal notice on 15-04-2009 stating that the payment due for the dishonoured cheques should be paid to me otherwise i will file a suit u/s 138 of the N.I act.  In reply to my notice they gave me a notice stating that the cheques were issued only as security cheques and they were never issued to discharge any legal liability and no amount is due against them..

even after this when they did not paid me any amount i filed a suit u/s 138 of the N.I act in the lower court on 05-05-2009.the company officials did not respond to this and 2-3 dates were passed .afterwards the judge issued bailable warrants of the directors of the company and then they responded and appeared in the court.In the court itself they stated that the cheques were issued as security cheques and no amount is due to the case is under proceeding and almost 1.5 years has passed .

this incidence has caused immense mental pressure on me and my business . i want to put the concerned directors behind the bars for the act they have done to me .now the problem is that from the last 2 dates the advocate of the opposite party states in the court that they are ready to give the cheque amount by way of draft in the court,,which i refused to take as already 1.5 years has passed and if now they give me  only the principle amount  then what is use of section 138.

afterwards the advocate of the opposite party told me that a new supreme court ruling has come under which they can deposit the principal amount of the cheques dishonoured in the court and if i refused to take the amount the case will be dismissed ............

kindly guide me whether is there any supreme court ruling that if they give the cheque amount now in the court when already 1.5 years has passed my case will be closed ...........

i want to continue the case and put the directors in jail.................... 


 4 Replies


Dear Saroop

In your case no body can stop you.Its upon you only to settle the matter or not. You can also file a suit for cancellation of sale deed as your consideration amount was not paid by the company.

saroop singh (gill)     15 July 2010

thanks for ur reply,

kindly tell me is there any new supremecourt ruling that if  a person is sentenced to jail u/s138 ,he can avoid going to jail by depositing the principal amount along with extra 10% fine........


Dear Saroop

The judgement was passed by supreme court in 1st week of May 2010.

The contents were

" Delay in settling cheque bounce cases will now cost the defaulter dear, up to 20% of the cheque amount. The penalty for delayed settlement of the cheque amount, after conviction in the trial court, would rise steadily from 10% in district courts, 15% in high courts to a whopping 20% in the Supreme Court.

The SC on Monday took this radical step through a pioneering judgment which aims to curb the tendency among defaulters to sit over the amount tendered through a bounced cheque.

Saddled with 30 lakh cheque bounce cases, the SC accepted most of the suggestions offered by attorney general G E Vahanvati.

A Bench comprising Chief Justice K G Balakrishnan and Justices P Sathasivam and J M Panchal also laid down guidelines for early settlement in cheque dishonour cases under Section 138 of the Negotiable Instrument Act.

The judgment, authored by Chief Justice K G Balakrishnan, indicated that defaulters going for early settlement before the trial court would have to pay just the principal amount with applicable interest.

But if they approched the district court for settlement after being convicted by the trial court, they would have to pay 10% of the cheque amount to avoid going to jail. So if a chque amount is for Rs 1 lakh, then to compound the offence before the district court, the defaulter has to pay an additional Rs 10,000 to avoid going to jail.

Similarly, if the defaulter agrees for settlement and compounding of the offence at the HC stage, then he would have to pay 15% of the cheque amount. The amount so collected would be given to Legal Aid Authorities of the respective states which provide free legal assistance to poor litigants in various forums, the SC said.

This judgment will go a long way in reducing the pendency of over 30 lakh cheque bounce cases which have jammed the wheels of justice already slowed down by pendency of 2.7 crore cases. During the hearing of a Section 138 case between Damodar S Prabhu and Sayed Babalal, the Bench observed that there had been an enormous rush of cases after cheque bounce was made a penal offence in 1989, followed by the amendment in 2002 providing for summary trial for early resolution of the dispute.

I hope this will help you to take decision

saroop singh (gill)     17 July 2010

thanks for ur detailed reply................

today in court the directors of the company paid the amount due on cheques in the court through demand drafts and the judge laid a fine of rs 5000 only on him and closed the case.........we refused to take the drafts...........the judge deposited it in what should we do

he held the payment of rs 1700000 for over 1.5 years and he is charged with a fine of only rs 5000

is this not injustice to us.........

tell me how to proceed now

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