• Issuing cheque from an NPA account termed as fraud or cheating?

1. My cousin issued me cheques from a NPA account and we realised on depositing that this account is NPA isnt that a case of fraud or cheating?
Matter in Brief:
 He had purchased raw material through my agency, as we had financed him with verbal terms and conditions of interest and payment return.
We have all the proofs that we had made payment on his behalf to the supplier we even acted as agent in the transaction and finance partners. We have bank acknowledgment on the bank letter head confirming that this payment was made to the supplier against the bills of my cousin.

When ever we make payment or channel finance a customer we take acknowledgement from the supplier as well that if they received the payment through our account for a customer via email and our company letter head we take stamp and signature.

We had informed him over the phone and via email that we are presenting the cheque and our bank and branch is same so withing 15mins we realised that his account is NPA as no cheque was accepted or honoured and then he smartly replies that I did not inform to deposit the cheque as my account is NPA

2. Please update me what facts would be required to prove this case as cheating or fraud as now he says he doesnt have the money but I even have proof that on 30th September he has made an EMI payment of Rs 4.6 lacs for his investment in Bangalore, making investments in properties and for hosting parties in night clubs he has money.
As we were ready to take payment instalment also but he has not given us a penny since 6 months or more.
Asked 7 years ago in Criminal Law
Religion: Hindu

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5 Answers

1) you can file complaint under section 420 of IPC for cheating

2) To deceive is to induce a man to believe that a thing is true which is false and which the person practising the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence

3) in the present case accused knew account was NPA . yet he issued cheque with dishonest intention that there was sufficient balance in his account for making payment .

4) you have to plead that accused made willful misrepresentation.

Ajay Sethi
Advocate, Mumbai
95221 Answers
7612 Consultations

5.0 on 5.0

Hi, you have to present the cheque and once it is dishonored then you have to initiate proceedings under Negotiable instrument Act.

2. For cheating and fraud you need not prove anything,simply dishonor of cheque for wants of funds is it self sufficient.

3. On the basis of the above you have to file a private complaint under section 200 of the Cr.P.C

Pradeep Bharathipura
Advocate, Bangalore
5607 Answers
336 Consultations

4.5 on 5.0

1. My cousin issued me cheques from a NPA account and we realised on depositing that this account is NPA isnt that a case of fraud or cheating?

Yes it amounts to cheating and fraud.

2. Please update me what facts would be required to prove this case as cheating or fraud as now he says he doesnt have the money but I even have proof that on 30th September he has made an EMI payment of Rs 4.6 lacs for his investment in Bangalore, making investments in properties and for hosting parties in night clubs he has money.

After getting the cheque bounced, yo ma issue a legal demand notice, if he fails to comply then you may initiate a cheque bounce criminal case against him and seek necessary reliefs as envisaged in law in this regard.

T Kalaiselvan
Advocate, Vellore
85422 Answers
2239 Consultations

5.0 on 5.0

1. You deposit the cheque which will be returned being dishonoured by the Bank.

2. File a cheque dishonour case u/s138 of N.I.Act since you have all the evidence of his dischargeable liabilities on you.

3. Simultaneously, file a police complaint/criminal case against him for cheating you by issuing cheque from a N.p.A. account knowing fully well that the said cheque will not be honoured by the Bank.

Krishna Kishore Ganguly
Advocate, Kolkata
27245 Answers
726 Consultations

5.0 on 5.0

1. It is an offence under sections 138 NI Act and also 420 IPC, for which a criminal complaint is required to be filed before the jurisdictional magistrate.

2. Mere criminal case will not result in recovery of money. In order to recover your money you are required to file a civil suit for recovery in the competent civil court. If you have documentary evidence to prove his liability then your prospects are good.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

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