Upgrad LLM

misuse of sec 138 na


Dear Lawyers,

Here is a case of misuse of blank cheaques and misuse of trust.

I had borrowed money from (ABC) financier a sum of Rs 7.50 lakhs and my friend (xyz) stood as guarantor, I had issued blank cheques, promissory notes and signed blank papers  to (ABC) however after a series of episodes and misunderstanding on not paying interest of 7% xyz  forcibly took blank cheques of myself and my wife. However with faith of closing the account we did not complain the matter to police. Now xyz has bounced a cheaque for Rs 10 lakhs in my name and Rs 15 lakhs in my wife name. He claims I have to pay him Rs 25 lakhs. ABC is silent about the whole issue. Now I would like to put these facts in front of the courts and prove that I had issued blank cheques and is being misused under sec 138. I do not have any proof of the documents  I executed with ABC or xyz except for xerox copies of Blank stamp papers and promissory notes I had executed with ABC.

I beleive misusing blank cheaques is punishable offence if so how?. Is it possible to proscecute xyz for trying to cheat me by misusing the cheaques by filling an amount (in his own handwriting) which has no relevance to his source of Income as an ordinary typist. Under which IPC section can I suggest my lawyer to procede criminal charges.

Please suggest

 
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ADVOCATE & DIRECTOR

GIVING BLANK CHQ  AGNAIST SECURITY IS THE COMMON PRACTICE IN  BUSINESS COMMUNITY AND EVEN IT IS  ALSO ACCEPTED PRACTICE.

IN YOUR CASE WE UNDERSTAND YOUR CONCERN, BETTER DISCUSS WITH YOUR ADVOCATE ALONG WITH THE COMPLAINT OF THE PARTY  , THEN PROCEED WITH THE CASE.

 
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LEGAL CONSULTANT

SAINATH DEVALLA

                                 It is a common practice for financial institutions (including Banks), to obtain blank cheques from the customers as a source of security.At the outset a loan is processed on the basis of Income proof or fixed asset security.But still they insist on blank cheques as a measure of additional security, just taking into perview section 138 of NI act.Blank cheques with the mere signature of the person issuing it,is not valid as per number of verdicts of many courts,including the Supreme Court.The cheque is valid only after it is filled in all aspects by the person issuing it.

                                    Private money lenders have been continously misusing section 138 for their personal gains.There has to be some end to this somewhere.

 
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LAWYER AT BUDHIRAJA & ASSOCIATES SUPREME COURT OF INDIA

Dear Author,

I want to know whether that financer is license holder or not. There are more queries to mke the same clear from u. U can call me at 09871158578.

 
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Dear Sir,

Thanks alot for your prompt reply and advice. I am happy to know that nobody can take law for a ride(writing any amount they wish). I have a few more questions to ask you in my case.

The most important thing is he is not a registered financier and has claimed he has charged Interest for the amount he has lent.

a) Can a person not registered as a financier claim he has lent such huge monies and collect interest?

b) Is there any way to proscecute xyz for misuse of blank cheques given as security before he issuing summons on Sec 138 NI? If yes, under which section?

c) plz suggest me any other judgment which might say that section 138 of ni cannot be invoked if cheque is issued for  security and also judgments which also bars invoking of 138 if cheque is issued as surety.

Awaiting your earliest reply

Regards

Murali

 
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POWER OF DEFENSE IS IMMENSE

Please read my submission on this topic and response.

You can not choose to remain overconfident, the law works on both sides.

Just your telling will not do. You to prove cheating in case of blank cheques. Giving blank cheques perse is not offense.You can be prosecuted because the fact remains that you gave signed cheques blank or not.

So unless cheating is not proved the law will be against you.

In such cases you have fight at every step at every stage and against every action than only you may expect to get some relief.

OVER CONFIDENCE WILL BE FATAL.

 
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Retired

What will happen if after giving signed blank cheques, a police complaint is lodged that these cheques have been lost as stolen before the party has a chance of presenting it be it a Bank or anybody else?

 
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POWER OF DEFENSE IS IMMENSE

While giving police complaint you have to explain how the complainant got hold of the stolen cheques.

You are not allowed to make absurd allegations against any body.

You must give a plausible explanation for misuse of signed cheques .

 
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What will happen if after giving signed blank cheques, a police complaint is lodged that these cheques have been lost as stolen before the party has a chance of presenting it be it a Bank or anybody else?

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