• Check bounce as material given by company misbranded in labs

I was dealing with pesticide company and regularly receive material and paying them. But one of their items were tested by state department and was misbranded as there was not required amount of indegrents and agri department filed case against me and company for selling spurious pesticide to farmers which is pending in lower as well as high court. I stoped payment of company and they presented checks given many year back as security checks and that check bounced. Now case is in court under 138. What should i do . I do have all the reports of central labs of spurious pesticide. Secondly i only owe them 3.5 lacs but they presented check of rs 5.5 lacs including interest.
Asked 4 years ago in Civil Law

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16 Answers

Hello,

You must take all these grounds before the court and say that you never had any liability against the said amount and therefore the cheques have been presented in a malafide manner; and as such the case must be dismissed.

Engage a good lawyer who may prove the same during examination and cross examination.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

1. In a cheque bounce prosecution under 138 NI Act there is a presumption that the cheque in question was discharged for a legally enforceable debt. The onus to rebut this presumption is on the accused.

2, Since you stopped payment when the items delivered to you by the complainant failed the lab test you have to contest cheque bounce case on the ground that as the items failed the lab test you had no legally dischargeable debt towards the complainant, hence you stopped the payment of the cheque.

Ashish Davessar
Advocate, Jaipur
30761 Answers
971 Consultations

5.0 on 5.0

You must have been issued legal notice before filing of complaint

2)you should have denied your liability to make payment as goods were defective

3) you must apply for bail and contest the case

4) cross examine the complainant on amount claimed by them

Ajay Sethi
Advocate, Mumbai
87947 Answers
6207 Consultations

5.0 on 5.0

1. it is not clear whether the cheque was presented to clear any old debt.

2.if yes then 138 NI Act is maintainable.Meri Security cheque is no defence to avoid rigours of 138 NI Act Cases.

3.Only If you could establish that atthe time when the cheque was presented no money wa due to them you can avoid the proceeding .

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

The bounce of cheque due to insufficient fund attracts 138 of Negotiable Instrument Act.

In your case you stop the payment due to misbranding .

The material facts could be the return of the inferior product and the value of other supplies taken along with the product in question.

If you are OK with all the relevant documents the this will settle for the value of material and interest there on.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

Assail the summoning order issued to you in the cheque bounce case before the High Court and seek a stay on the summoning order and the entire proceedings of the cheque bounce case.

Contest this case on the points that you have described in your question that the co.'s pesticides were of sub standard quality.

Vibhanshu Srivastava
Advocate, New Delhi
9426 Answers
245 Consultations

5.0 on 5.0

You may file against the same company under The Indian Contract Act, 1872 by below are reference sections and explain why the payment were stopped.

1.Fraud (Section 17): "Fraud" means and includes any act or concealment of material fact or misrepresentation made knowingly by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto of his agent, or to induce him to enter into the contract. Mere silence is not fraud. a contracting party is not obliged to disclose each and everything to the other party. There are two exceptions where even mere silence may be fraud, one is where there is a duty to speak, then keeping silence is fraud. or when silence is in itself equivalent to speech, such silence is fraud.

2. Misrepresentation (Section 18): " causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement".

Ganesh Kadam
Advocate, Pune
12338 Answers
191 Consultations

4.9 on 5.0

present the papers of the case filed by agri department against you and the company to prove that you dont intentionally stop paying the company. they are responsible for it. is there a contract between you and pesticide company ? try to see what is the terms. there may be a way out.

Arnab Kumar Banerjee
Advocate, Kolkata
112 Answers

4.0 on 5.0

Stopping payment is also considered as an offence under S.138. Therefore, the outstanding dues should be paid. However, for having sold spurious pesticide, you have to prove that you acted as an agent and not involved in committing the offence. You can claim the damages from the company. You have to legally prove that the cheque has been issued for the outstanding dues which is 3.5 Lakhs and not for 5.5 Lakhs. Therefore, take steps to clear the outstanding dues and recover the damages.

Rajaganapathy Ganesan
Advocate, Chennai
2085 Answers
8 Consultations

4.9 on 5.0

Provide the case documents against u for the below quality product in the court where 138 is pending.

Subhendu Ghosh
Advocate, Barrackpore
234 Answers

4.0 on 5.0

When you received reports about the bad quality of materials supplied, did you inform the supplier about it and do you have documentary records as evidence about this?

What was the reply by the supplier?

Whether you communicated the supplier to not present the security cheque to the bank without replacing the bad material?

Whether this stop payment instructions were given to the bank after intimating the supplier about all these episodes?

You have to prepare yourself to defend your interests on the basis of above details to challenge his cheque bounce case.

T Kalaiselvan
Advocate, Vellore
78104 Answers
1543 Consultations

5.0 on 5.0

You need to prove the same in trial before the court. First take bail in the matter and then face trial. Appoint a good lawyer.

Prashant Nayak
Advocate, Mumbai
27275 Answers
88 Consultations

4.4 on 5.0

If the security cheques are more than 30 days old h need to worry because 138 matters limits the time of 30 days and if the time is barred then no such case exist

Amol Chitravanshi
Advocate, Delhi
279 Answers
1 Consultation

4.0 on 5.0

You have all the reports of central labs of spurious pesticide , so you have option to get relief in your favour in the cases pending in lower as well as high court.

Now come to the matter of 138 of N.I.Act for the cheques given as security by you.

The cheques were given as security , it means those cheques were undated, because as per RBI provision the life of a cheque is only 3 months from the date of cheque.

Due to having undated cheques they use them to bounce it from your bank due to your mistake.

As you have mentioned above that your case is going on in the lower and High court, you should stop payment of cheques from the bank on this special ground after giving the bank a written request.

File your application under section 145 in the cheque bouncing court after narrating all the facts as you have taken in the pending cases in High court ,and also submit that the cheques were given as security purposes and that is the reason they use the cheques after a long gap .sure you will get justice.

.

Mohammed Shahzad
Advocate, Delhi
9905 Answers
121 Consultations

5.0 on 5.0

Respected sir...

Once you give your check which are blank then it's your liability that you are liable for all the payment which a person who is drowing cheque ..Sir first of all just join the proceedings in court and hire a good lawyer they are misleading the court by there fake petition .....Just tell court the true facts and circumstances of the case in your written statment ..And also lodge a fir against the company under section 420 of IPC ...Sir make a proper record along with your sale purchase and action taken upon u by department ..you will surelly get justice

Dinesh Sharawat
Advocate, Delhi
1258 Answers
12 Consultations

4.9 on 5.0

You need to give your all the defences under section 145(2) of the N.I. Act along with the all evidences you have.

Laksheyender Kumar
Advocate, Delhi
734 Answers
2 Consultations

4.8 on 5.0

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