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jts . (service)     10 June 2015

Query on cheque issued by third party

I have loaned Mr. A some money in cash without appropriate legal documentation or witness, and in return Mr. A gave me a cheque which drawn by Mr. X from a distant location.

I have no written evidence of loan between Mr A and myself. I dont have any contract with Mr. X to prove legal liability as he did not tae the loan. Who will be responsible if the cheque bounces - Mr. A or Mr. X?

On the other hand, can Mr X sue me if the cheque gets honoured stating that it was obtained by Mr. A through some fraud, or he took me by saying I will not present in the Bank, etc. and ask me return the loaned money?


 7 Replies

S K KARNjhc (Legal Adviser)     11 June 2015

kindly explain clearly, there are something hidden, or you may contact your local lawyer


Kappil Cchandna (Expert Bail & Criminal Defence Lawyer at Delhi Supreme Court of India)     11 June 2015



I think u better make sure that u interact with Mr. A about the loan thing through message or an emial right, so that u have a proof of the same for future reference haan .... also mention about Mr. X cheque and all right ...


Drop the Cheque and get it bounced ....Complained be filed against the person against whom u have the legal laibility .


Warm Regards

Kapil Chandna Adv


SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     11 June 2015

You have not given full details.

  1. Whether the cheque is drawn in your favour or in the name of your Debtor
  2. Whether the cheque is crossed or uncrossed
  3. If it is drawn in your Debtor's name and uncrossed, whether it is endorsed to your favour on the revers of the cheque and delivered to you by your Debtor.
  4. Have you received the cheque in good faith or do you have doubts about the integrity of your Debtor.

In all probability you may be a holder in due course and you have a better title than anybody else provided you have received it in good faith and in circumustances which will not make you believe that your Debtor does not have title to the cheque receive money through the cheque.


Having received the cheque, instead of presenting it for encashment, you are asking so many questions means you have doubts and you have not received the cheque in good faith.




Need not be confused. Spare some time and find out complete details of the issuer of cheque. Third party is liable and hence nothing illegal in it.

jts . (service)     11 June 2015

Thank you everyone for your inputs.


Yes, I am worried because Mr. A is behind the bars for committing fraud in an another city within India. Now, I cannot get to know if the cheque was drawn by Mr. X in good faith or was it taken by intention of committing another fraud. An email or a written legal contract now seems remote, as he is already behind bars. The police who is handling the case says, he has spent all the money he took and he has no assets in his name, not  even a residential flat or bank FD.


The cheque is crossed as A/C payee and has all fields except for the name, which Mr. A said you fill in your name because I dont know how your name is mentioned in your Bank account. The problem is there is no written proof and/or witness that I gave him money in cash and he gave me cheque as a proof of repayment.


Since this Mr. A is now behind bars, I doubt on how he got this cheque. The cheque however passed UV test at the Bank, which means the cheque is original. I neither know who is Mr. X nor do I have any direct cotractual liability with him. Can this Mr. X sue me and recover the money back via police or some lawyer if the cheque is honoured? In the event cheque if is dishonoured, should I sue Mr. X as he has written the cheque, even though there  is no evidence that a contractual relationship exist? Is there any chance of recovery if the cheque is dishonoured?


Please guide  me on how this case will proceed in both events, firsty, cheque is honoured, and secondly, if the cheque is dishonoured by the bank for whatsoever reason.


SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     11 June 2015

Dear JTs, In the circumstances under which you have come into  posession of the cheque, I am of the view is that you should make a contact with Mr. X through the Bank and account number details available on the face of the cheque and enquire with him whether you can encash and let him fill up the payee's name or give a letter to that effect that since he owes money to A he intends to make payment to A. Even then whether cheque is endorsed in your favour!? to be verified.Now the circumstances show that A is unreliable and you cannot claim that you have obtained the cheque in good faith. Even if the cheque is encashed and credited to your account, the methodology utilised by A to obtain the cheque, without writing Payee's name gives rise to suspicion. Yourself entering your name will make you an accomplice or even if somebody else fills up there will be difference in handwriting. Coupled with the fact that A is beind bars, it will build evidence against you that you did not receive the cheque in good faith and you shall be a party for conversion.

1 Like


Interaction with "X" will yeild some respite for U.

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