Section 138 - misuse

 

To answer your queries pointwise:

 

1. The first and foremost premise in Section 138 is that the cheque in question was issued for consideration and there is a legal binding on the drawer of cheque to pay the money noted in the cheque.  In your case, the plaintiff or complainant admitted that he was holding an undated cheque which he presumably dated and presented without notice to you.  Hence, filing of Section 138 case under such circumstances for  return of  cheque is untenable. Further,there is no legal binding upon you to pay the amount noted in the cheque as the repayment of money to your Agent is governed by a separate agreement which clearly states that even when the Agency is terminated before the lock in period the amount is not payable till expiry of lock in period.  Therefore, proving that the cheque was issued by you to your Agent for legally binding consideration,  the onus of is upon the complainant. 
2. Yes,  you can pay the amount without prejudice to the case pending.  Your Lawyer can file a petition in the Court and plead before the Hon.Judge that now that the amount has become due, the amount is being paid and which I am sure shall work in your favour for striking down the Sec.138 case.
3.  When the agreement between you and your Agent was that the security deposit would be returned after a certain lock in period, which must have been specified in the said Agency Agreement, It is strange as to why you have issued an undated cheque.  If the complainant is referring to the Agency Agreement where it is clearly mentioned that the Caution Deposit would be refunded after a certain period, his case is very weak and on a slippery ground as he just misutilised a cheque which has come to his posession and tried to encash it much before the agreed date and hence there is no legal binding on your part to honour the chque before such due date as per the agreement.  This point most likely will bring you out of this Sec.138 case. But you have to undergo all the mental agony and expenses for the mistake of issuing an undated cheque, reasons for which are best know to you only. Such cheque should have been dated by you synchornising it  with the "specific lock in period" in the Agency Agreement.

Thanks However on the point 2, I wish to understand can the court direct us to pay as the lock in is over now, or court will merely decide on the merits of 138 pertaining to the present case and the complainant will have to file a civil case?

Dear friend,

First of allthere are many citations available where a security cheque is not considered a cheque under the preview of the Sec 138 NIA.

Secondly, The court which are dealing with the specific 138 cases can not make you bound with the decision to pay if the case is not under preview of the Sec 138 , in that case the case will be simply dismissed with the acquitall of the accused & its appeal only lies with the HC and not in session court which can be questioned at any time during the trial on the point of view of the Jurisdiction Pl note.

Thirdly, Your case is also not fit as the liability of payment is attracted with a separate agreement with certain terms and conditions for which both the parties agreed legally and which is legally enforceable by law. So this cheque's liability does not stands before the maturity date of the bond under agreement.

Fourthly, You should file an application before the court through the advocate that as the time limit has been matured so as per the contract you want to pay back the money so the complainant should receive the money in the presence of court. This will be summoned to the complainant and you either give the money to the complainant or get it deposited in the court in his name.stating the facts of the agreement..

As per my advise it will be better you send him legal notice to come and receive the maturity amount from you or tell the bank account number in writing that in that account the amount be deposited in his name only. In case he does not respond the notice you deposit the money in the court in his name stating that in spite of your best efforts he is not interested to get the money back as per the maturity of the agreement ; here you also do not forget to mention that a case under 138 is also going on in the such and such case which will be enough to get clear yourself out of the case and your intentions to pay will also be noticed by the court in your favour.

 

 

Pallav jee,

 

Before the Section 138 case has come to its logical end, Court will not and shall not issue any order against you to pay the amount just because the amount has become due.  Court will confine itself with regard to the merits of case filed before it.  Since you are a law abiding citizen and wish to honour the agreement you had legally entered into with your Agent, you wish to pay the amount.

 

Your paying amount now should not be construed as acceptance of guilt under Section 138 and therefore, it is imperative that you should file a petition before the Hon.Court stating that in view of the amount has since become due, you wish to pay and direct the Agent to accept the amount.  This act will surely work in your favour while it will clearly state before the Court that such act of paying now is only to honour the legally binding commitment but not to unwittingly accept the guilt under the wrongly filed Section 138 case.

Dear Anand / Siva

Thanks for your valuable reply and feedback.

However:

Please note that we have suffered lots of mental and financial stress because of this needless and fraudulent case against us.

Since this case, we incorporated our firm into a Pvt Ltd Co and this case has led to lots of bad name to us in our trade circle.

Anyways besides this case he also tried to file a criminal case of cheating against us in the local police station and when police refused to register the case on merits, he moved an application against us under section 156-3 in Tis Hazari court simultaneous to the Sec 138 case. My wife especially had to face lots of harassment as she had to make rounds of police station without any reason and rhyme!

However the Judge in the 156-3 case dismissed the petition asking for the police intervention BUT have kept for 156-3 application with him and presently that case is in evidence / pre summoning stage and we have yet NOT been summoned and may be we never will be as again this is no case of cheating as the date when the application under 156-3 was filed, there was a legally signed lock in which was prevalent.

Anyways coming back to the Sec 138 case, honestly speaking I am not now very keen to pay him that easily and before deducting my direct and indirect costs of these unwanted and mala fide legal cases.

I just want to understand from your learned guys:

Given the fact that it was an undated cheque and it was presented before the legally enforceable liability on our part, does sec 138 in its present merit present any danger for us? What are the chances that this case will be dismissed in our favor and what is the time frame for such a decision? On the other hand what is the worst case scenario for us if the case goes against us....

Secondly can the court now say that as now with the course of litigation the payment liability of ours have become valid so the sec 138 is applicable on us? (Though at the time of presenting the cheque and filing of this case against us the legally enforceable liability was not applicable)

If you feel that in light of the above 2 points we are on a strong wicket and the Sec 138 will be dismissed, we will try our line of defense accordingly and fight for the dismissal for the case rather than a settlement through mediation or out of the court settlement.

Honestly speaking if he has tried to misuse the legal recourse and blackmail and harass us into an early and unethical payment, now I will also like to get rid of these criminal cases and rather have him take the civil route to settle this payment dispute which will also make his life a bit difficult as he has made mine now!

Please advise accordingly, thanks in advance for your valuable inputs

Pallav

 

Basically he does not have any case against you u/s 138 especially in the light of you having made it clear that your agreement between you and him has been terminated and you have instructed him to not to go ahead with the cheque in deposit which was without date and was given as security, further his advocate admittedly issue notice confirming the undated cheque.  Therefore you can challenge the cheque bounce case properly and get it dismissed/acquitted and then make him to run behind you for getting back his mney for some time as a compensation to the  tortures he had given to you in the name of the said case.

On merits your case is not covered under Sec 138 NIA provisions, so the Criminal court in which this case is going on can not punish you for the same and also can not direct you for the payment as the court in subject's preview is only concerned up to the 138 provisions and of not under civil court authority to direct you to pay the amount as it is due now according to the provisions of the agreement .

For that he has to put another case under civil court separately for the recovery of the amount, please note.

You are having many bright chances to win the case if it is presented properly by an experienced and sharp Advocate in the court.

Thanks friends Also, now that he has misused my cheque, filed a wrong case against us and have even lied under oath in court - while putting the affidavit under sec 138, can we also file a case of breach of agreement, property and also that of a perjury? He has committed a grave offense I suppose? Please share your views.

Thanks friends Also, now that he has misused my cheque, filed a wrong case against us and have even lied under oath in court - while putting the affidavit under sec 138, can we also file a case of breach of agreement, property and also that of a perjury? He has committed a grave offense I suppose? Please share your views.