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surinder (trader)     28 May 2008

cheque bouncing by wilful offender

hi i unknowingly gave a computer dealer goods worth 11 lakhs out of which 3 lakhs are paid rest of the 7 cheques have bounced ,after finding out i found that this is his
normal way of working as many traders he has cheated like this ,he has a lawyer friend who is helping him to dupe traders and even the bank manager from where the
cheques are issued is with him what should i do ,he is asking me to put a case on him in a casual way,so that he can take the legal loopholes and escape all the cheques have only one reason which is" funds exceed arrangement" please also let me know if insufficient funds attracts a more heavier sentence than "funds exceeds arrangement"

i look forward to this esteemed forum to help me out in this case as i have nowhere to turn to and this is my working capital and my entire business is going to shut down due to this please let me know as soon as possible


Learning

 19 Replies

Prakash Yedhula (Lawyer)     28 May 2008

I am sorry that you were duped by a person. But as for as the law is concerned there is no separate punishments for different reasons of dishonour. Apart from the criminal case for dishonour of cheque, you can also resort to civil remedy for recovering the amount by filing a suit. You can also seek to attach his properties pending the suit or get a garnishee order if any amount is due from a third party to that person. This way you can recover the amount from that person.

H. S. Thukral (Lawyer)     28 May 2008

You have to proceed against him either under the Negotaible Instruments Act (Section 138), You can also file civil suit for recovery of money due. Insufficient funds ir exceeds arrangement is one and the same thing. You have to keep patience and follow up your case diligently. Such unscrupuous person are taking advantage of over burdened courts where the offence is not being taken seriously. In most of the cases the case is compromised when the offender agrees for payments in installments and the victim in the cirucmstances agrees.
1 Like

Guest (n/a)     28 May 2008

sir i hav lost the cheque after dishonour from the bank and i hav sufficient entry in both of the accounts as opponent & myself. sir i hav also the photocopy of the cheque with dishonoured bank memo as insufficient balance in acc. sir can i suit a file against the opponent,please give me right advise. thanks.

H. S. Thukral (Lawyer)     29 May 2008

It appears that it is over a month now that the cheque was returned unpaid by the bankers. In such case mandatory requirement of demanding money within a month is over and you can not resort to provisions of section 138 of NI Act. Condonation of delay may also not come in the cirucmstances. It is advisable that you file a criminal complaint case under section 415/417/420 IPC before a magistrate and also file a civil case for recovery. If you need further clarification submit details as to date of return memo.

Hemant Agarwal (ha21@rediffmail.com Mumbai : 9820174108)     29 May 2008

"Surinder" : Your Opponent's profile : - Dealer in Computer goods - Habitual Cheater (since he has cheated other traders in similar fashion) - must be having other N.I.Act cases against him, already in court - must be an experienced offender - could be duping the Govt., too by way of Excise, SalesTax, Octroi, ServiceTax, I.Tax, ... - should be a "Properietor" firm, and not a Partnership or P.Ltd. co. - My guess is that your "opponent" is from Mumbai. (Kindly confirm) YOUR contention that he has his "Lawyer" and Bank Manager to help him or "abet" him in his habitual crime's won't stand Good in the court. False allegation. Forget it. WHAT YOU COULD DO : (since your defaulted amount is quite big) - File a N.I.Act case against the offender, immediately, subject to meeting all N.I.Act parameters. - "insufficient funds" & "funds exceeds arrangement", attract and also means the same (THE CHIEF CRITERIA under N.I.Act is "dishonour of cheque", withstanding other conditions). This is not a LoopHole (as illusioned by your opponent), but a conclusive evidence against him. - use some detective sense, AND obtain his Bank Statement's for last 2-3 years. - use some detective sense, ANd obtain his Income Tax returns for the last 2-3 years. - file a "Civil-Suit" for recovery (this will involve about 1 lakh rupees and approx. 5-8 years) - file a suit for "Breach of Contract", under the Contract Act. - write / email to all the Computer Dealers / Traders Associations and all its individual members, highlighting this offender-cheater, (being your moral and social duty) so that atleast other Dealers / Traders members are aware off and in turn could pass you some evidence which they might be having. B-E-S-I-D-E-S, the above start accumulating evidence against him, like : - talk to other traders (whom he has cheated), and obtain the photocopies of the dishonoured cheques, bill, contracts, Case-numbers & Case-papers (if cases filed) - obtain his SalesTax no., Excise no., Octroi and Service Tax nos. and COMPLAIN to the respective departments for "suspected evasion" and request appropriate investigation. (Later you can obtain certified copies of such reports under the RTI Act), and use it as evidence. BY above, you could prove in the court, the habitual offender'ship of the opponent, where the court will show no mercy to the opponent, will show no leniency by accepting split/part re-payment, (which your opponent could be banking on). ALSO, you would contempelate filing seperately for "Criminal Breach of Trust" & "Cheating" under IPC with the backing of above evidences, which can run concurrently with the case of N.I.Act. KINDLY, understand that your Advocate is not going to accumulate evidences for you. That you will have to do it, yourself. The Advocate is only your legal representative (your mouth-piece) and he can work successfully only with the evidences brought before him, that too before filing the proceedings. Keep Smiling ... Hemant Agarwal

Guest (n/a)     30 May 2008

as i lost ,y job now, im not able to pay my ecs which i have been doing for 6 months. bank people saying that they file under 138 and 420 even after i told them i will pay them in a month once i get a job. please advice me what im supposed to do

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     01 June 2008

Mr Surinder, you got good advice from advocate freinds. However your story is not convincing. When yiou are doing so big buisness still you lost cheques looks funny and can not be believed. MOREEVER if the other party is so big cheat ,yhan when you came to know about it. If you have accepted cheques for such big amounts , it means that you were knowing the party very well. It is also possible that you must be expecting bumper profits and hence ignored the background of the borrower. A knife has two sides, it can heal as well as it can cut or injure. If you make allegations without any evidence and circumstances you will be liable for criminal action.

Guest (n/a)     01 June 2008

Cheque Bounce

Bhaskaran Advocate (Lawyer)     07 June 2008

Shashikumar its not Surinder who has lost the cheque,  it is a guest who has put this question.


Surinder seems to be in real financial crisis.  


There are cheaters on the prowl misusing cheques.


Your reply answers the guest.


 

Kiran Kumar (Lawyer)     07 June 2008

well Surinder u ll ve to move under Section 138 of the Negotiable Instruments Act.....simultaneously u can also ask for the necessary compensation by filing necessary application alongwith (under the relevant provisions of Cr.P.C).


in few recent cases it is observed that the compensation awarded was equalent to the sum involved.


civil suit remedy for recovery is always there.....and u can take both the remedies together.


pls consult local lawyer for the proper legal actions.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     07 June 2008

Yes,


As I understand the problem that a dealer has parted the goods against the cheques and cheques bounced and lost.Now the dealer is claiming that the debtor is a rouge and habitual in doing similar michiefs. And in this background I have given the reply.


I am a defense advocate and always on the side of the defendent. Law can not visulise all the contengencies and no law can be made to fit all the possible situations. Smart people try to take benefit from it.


It is easy to weep and blame to hide ones own stupidty  mistakes or smart practices.


In most of the cheque bouncing cases the reciever of the cheque is either lends money on high intrest or sells goods on high profit. In even some cases gets cheque for giving new  life to time barred claims.


As the laws enacted to help the woman are being now being misused by inlaws or corrupt administration so is the case for the law for bounced cheques.


If you investigate deep into any cheque bouning case , you will find some or other smart practice by the lender and the defendent/accused is helpless sufferer.

Bhaskaran Advocate (Lawyer)     13 June 2008

Shashikumar in that case no money should be advanced through cheques.  And never lend money  taking cheques.   It comes to that end.


So ultimately cheques becomes so dangerous a thing that no one will do transaction in cheques.


And this is what the legislature do not want to happen.


In any case the borrower should never part with his cheque, and he should know that if he never repays the money borrowed he will have to suffer. 


People lending money is their hard-earned money.   Sometimes they lend curtailing their own expenditures.  They  are the first sufferers by parting money, and they get into more sufferings after lending.


So in these days when you lend money it never is repaid since the public moral values have gone to worst.   Better put your money in Bank Fixed deposit or property or even Gold it will fetch good returns.  Not in shares as it is bearish and the economy is in recession period.


Just live a peaceful life putting your money safely and not lending receiving cheques.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     13 June 2008

Yes there are two aspects one is legal other is moral.


You should not mix both.


If you follow morals the money is to be repaid.


But the borrower cheats because of


one - he was trapped to give cheque which most of the time is always for more value than the actual amount. Why becuase no body lends money on charity. So interest amount is added in advance which most of the time is many times more that market rates.The borrower was in defficulty while borrowing and with addition of heaby intrest he just can not pay.


Two - the cheque is rarely a direct and simple transection. There are always series of tansections for goods or services plus some cash. Or if the cash was given initially it was small amount and got added with passage of time with adition of heavy intrest.


I have seen most of the cheque cases by co op banks co op societies and money lenders. The cheque is taken on the very first day. Now how a co op bank , credit society or money lender even legal money lenders suh as finance companies calsulate interest in advance. So the cheques are always for inflated amount.


The borrower is helpless to prove this since his guilt is prsusmed.


It is here that the defense advocate if does some hard work can bring all these facts on record and bring justice for the borrower.

Tipsy (importer)     13 June 2008

I fought a case under section 138 for Genuine cheque Bounce and I recovered


after 9 year i.e loosing in lower court and settling in High Court before judge ,


and if we both Accused and Complainant do not settle, High Court Judge told


us, are you ready for  another 9 yearsI told him that my father is suffering from


blood cancer and I need money, and we had settle.


In short 138 is not easy even though it is fast track court- Think Twice,


money will double in 9 years and you will get original amount after 9 years. Thi


]is my persopnal experience


 


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