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Curious Sam (Manager)     26 April 2012

Cheque bounce case between brother and sister

I gave a cheque to my brother, as a gift on his birthday, for Rs one  lakh and the cheque bounced.

I explained to my brother that I had miscalculated my bank balance and I will make up for it in a few months.

But, my bhabhi is barinwashing my brother to threaten me with a 138 case, to extract money out of me.

My brother has given me cash, in the past, for more than one lakh and some gifts in the form of cheques also. 

But, are gifts exchanged between brother and sister legal loans and can there be a 138 case between a brother and sister.  How will one prove that the money given to the other was not a gift but  a loan.  Can my brother even file a case under 138, by arguing that the money paid to me was a loan, not a gift, so my cheque having bounced is a fit case under section 138. Again, when is money given by a brother to a sister considered to be a loan and not a gift - even if the sister asks for that money from the brother.



Learning

 23 Replies

adv. rajeev ( rajoo ) (practicing advocate)     26 April 2012

To file cas u/s 138 of NI Act there should be legally payable debt.  Mere saying loan was given to you does not suffice, it has to be proved.  Before filing the case he has to issue notice, if he issues the notice then reply to the notice by giving the true facts.  You can also do one thing you write a letter to your brother informng the cheque given to him as gift is miscalculated so dont present it for the encashment, even if it is presented then return it immeidately.

Another thing you can do if you want to issue another cheque, immediately issue another cheque along with a letter informing him that true facts.  

Curious Sam (Manager)     26 April 2012

My question still remains, how will a brother prove that money given to his sister was a loan, not a gift.

And on whom rests the onus to prove, in a 138 case, and how can a sister prove that the money given was a gift, but never a loan.


(Guest)

It is a paradox. the main ingredients of 138 proceedings completed it will give rise to a presumption in favour of holder.  so the holder is in accused poisition. ur brother can prove it is loan. your facts now displayed on query will to some what extent give rise of presumption as loan and not a gift.  better speak with your brother and solve the matter.  there are chances of amicable solution exists

Ashok Yadav (Lawyer)     26 April 2012

The court will presume that it was a legally recoverable debt and onus to prove that it was a gift on you, if the mis calculation was only there you can told him to present the cheque again or you can give him a new cheque for same amount, but it seems that you are not ready to pay him that amount, so you may face prosecution and prima facie case is against you.

YOGESHWAR. (ADVOCATE HIGH COURT-criminal /civil -youract@gmail.com)     26 April 2012

Presumption only for process issue.

 

You can win the case and so other accused for NI 138 since there are many many technical issues which the court has to decide before conviction.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     26 April 2012

All the presumptions are only for issue of process not for convication.

 

There are no of steps where even in lower court case can be dismissed on technicals.

Curious Sam (Manager)     26 April 2012

Exactly my understanding too.  Presumtion can only be for the process of issue - all that means is that prima face, there is a case.  However, especially in the Indian culture context, brothers always give money as gifts to their sisters. What about the monetary gifts given by brothers on Rakhi.  I will say it is almost impossible for a brother in India to prove that the money given to his sister was a loan.  What about fathers filing 138 cases against their daughters for money given to their daughters and son in laws during marriage.  What about any cheque given by   a close relative during marriage, bouncing.  Our courts will get clogged with domestic disputes.  Was 138 meant for this purpose.  Even husbands or ex husands could then file 138 cases against their wives.  In these cases, loan does not mean anything unless it is specified to be so, in writing, at the time of giving. Even if the brother was giving a loan, did the sister fully understand that it was a loan that the brother could legally enforce and demand back.  Brothers will often say in India "Give it back to me when you have the money" - Is that a loan for 138 purposes.  I do not think so. Then, come hundreds of other considerations like any transaction over Rs 50000 should be by cheque and mentioned in Income Tax Records.

sri (ceo)     26 April 2012

loan or gift should be evidenced in court...otherwise, not tenable...

relationships in front of court is meaningless...

its either business rules or evidences...

a gift without a gift deed is not...

a loan without proof is not...

relationships in court not matter...

if your brother has given loan and you countered with a cheque you are liable under ni...

pay cash and close... dont run around court... be fooled and fool around...

Curious Sam (Manager)     26 April 2012

My brother has not given me any money.  I am just arguing that even if he says he did and he can fraudulently prove that he did, how will he further prove that he gave me a loan.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     26 April 2012

 

SC has held in many cases that the provisions of NI act are legal fiction and hence all of them have to be strictly followed . Most of the complainants  fail to follow many imp requirements and that is why it is always easy for any accused of cheque case to win.

N.K.Assumi (Advocate)     26 April 2012

She says that it was a gift and the brother says that it was a loan,how can we possibly come to a conclusion either way without details of the facts.I must say that we are arguing with our imagination only. Yes SC may apply legal fiction but that is with the facts before them and apply legal fiction, but we can not apply legal fiction without a facts. Better to discussed issues with facts in dcetails.

Ashok Yadav (Lawyer)     26 April 2012

I am agree with sri, you have mentioned in your question that you got from your brother some cash and some cheqes also, it is clear by cheques you accepted that you have taken an amount from him, and by giving him a cheque you have proved that there is a debt, now the onus is on you to prove that it was not a loan and it was gift only.

I am agree with experts taht there are many technicalities involved in 138 mattres, but as i told earlier, prima facie case is against you, you may be convicted.

K.K.Ganguly (Advocate)     26 April 2012

Your brother has to prove that you had issued him the cheque towards your dischargeable liability. If  it is so, then he will issue you a notice u/s138 within 30 days informing clearly your specific liability against which he claims that you had issued the said cheque further claiming the said payment within 15 days.

On receipt of the said notice u/s138, you shall have to reply him stating that it was not against any loan or such dischargeable liabilities & as a gift only & that you had miscalulated your balance. You can ask him to return the said cheque & issue fresh cheque if you so desire.

 

Curious Sam (Manager)     27 April 2012

I read somewhere that the proof of loan has to be given by the complainant in the first instance when they file under 138.  Is that true?  Can the complainant just state that he had advanced a "friendly" interest free loan to his sister and file a case under section 138 without submitting any proof of the loan advanced?


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