• Can action be taken if a goodwill cheque gets dishonored

I’ve lended Rs.15.5Lmoney to ‘x’ person for his business(where in he has assured that he will return the money back with 3% interest), now when am asking for my money , he says that he has considered my money as Investment and bear the losses as well. We have made no agreement at that time, the only security given by him was 16L cheque.
Now that the company is closed………..When I’ve dropped cheque for clearing it got bounced. Immediately I’ve booked him in NI act and lodged a case against him in the court of law.
Now he has come to me again asking for some time to clear the due amount. So I told him to make a fresh agreement and he has made a draft for that agreement with his lawyer. But the agreement says that "I've invested in his business, now that the business has been closed by the mutual consent of both of us, though there was no assurance made by 'x' person on returning the money, but on humanitarian grounds and goodwill he is agreeing to pay the borrowed money to me" is what written in the document. And the agreement also says that if I return the dishonored cheque, this agreement shall be made by issuing new cheques to clear the whole amount"


“And Whereas the settlee(me) demanded the the settler(x person) to return the aforesaid amount of Rs.’15.5L’ as was invested by the settlee in the aforesaid business with the settler, though the investment was contingent for their respective share as invested by them and the settler never assured to the settlee with regards to the reimbursement of the ‘Rs.15.5L’ amount. And where as the settler on Humanitarian grounds by keeping a good relationship between the settler and the settlee, agreed to pay the complete amount of Rs.15.5L, to the settlee which was invested by the settlee in the aforesaid business, accordingly settler issued a cheque for an amount of Rs.16L in favour of settlee. The aforesaid cheque stood dishonored and returned to the settlee by his banker. Where after the settlee informed the same to the settler regarding the dishonor of the aforementioned cheque. And whereas the settler requested with settlee to give some sufficient time to arrange for the said amount of Rs.’y’ and the settlee also agreed to upon the same on the following terms & conditions:
Asked 4 years ago in Civil Law

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12 Answers

Dear Client,

If u lack rational, than only agree to such agreement. This is foolish & fraud, if u get in to this agreement , your case u/s 138 washed out and no chance or recovery.

If u really want to get into agreement, than just simple terms that he borrowed this much amount for business purpose ( no Interest), Which is failed to repay in given time, than given cheque, which is bounced, Now he is requesting for some time for repayment, till than request the court to not proceed till date over. And with this request he is giving another cheque and extra cheque towards litigation cost. .

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Don’t sign the agreement

2) if you have invested in his business you are not entitled to refund of your money

3) continue with cheque bouncing case

4) also file summary suit to recover your money

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

Dear Sir,

This agreement is bogus and the person is again trying to play with you because of your fear of recovery.

You have good case you have given him money as a friendly loan and there was no investment as there was not deal signed by you he will not able to prove any investment.

Further he is just doing this to misguide you so that you compromise on NI case.

From the facts mentioned above you have good case on merits and your should peruse same.

if he ready to change the agreement and give proper verfied cheque in advance than only compromise in NI case.

Also file Summary recovery suit to recover your amount from the person.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

1. If you enter into such an agreement then your 138 case will be affected.

2. So let 138 case continue.

3. Mr X is just trying to buy time through that agreement. There is no guarantee that he will obey the proposed agreement.

4. The fact that he has approached you, shows that he owes an existing liability or debt to you.

5. Just to get over his liability he is luring you to sign such agreement.

6. Proceed with your 138 case. But bear in mind that 138 matters proceed painstakingly slow. It may take many years for final judgement.

7. So also explore some settlement possibility. In any event ensure that you receive the payment immediately and not on a future date. You may think of waiving the interest or reducing the principal amount to some extent. If x agrees atleast you will get your money faster, be it little lesser than what you paid. But think practically and take a call.

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

Get the good will part and investment part removed from this agreement.

Since it was agreed explicitly in between you and him that he will return the loan to you with interest @3%, this can in no way be treated as an investment. The repayment of this loan was not contingent on the performance of the business in question..

Get this agreement re-drafted.

Vibhanshu Srivastava
Advocate, New Delhi
9426 Answers
245 Consultations

5.0 on 5.0

First of all the documents is a bull shit you need not to enter any such agreement for recovery of the money that will definitely we can your case in Negotiable Instrument Act you need to be is stick to your position asking your 16lacs refund from the person you get the money you need not to disclose that you gave only 15.5 lacs @ 3% interest but you can say you landed 16 lacs uncut see and all the promise that the amount will be paid back and he has provided a cheque a 1600000 Rupees as security now as the cheque is dishonoured he is liable to pay the face value of the check similar amount for compensation and any legal charges including interest thereon from the date of dishonour of the check Section 138 of Negotiable Instrument Act is a punishable section and definitely in case it is not settled he will have to be imprisoned for non payment of the check

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

Hi

1) The new agreement proposed by Mr.X is nothing but a sham document solely created

a) To evade repayment of Rs15,50,000-/- plus 3% Interest and

b) also to avoid prosecution in the 138 NI act case.

2) It appears that Mr.X is apprehensive of the ongoing 138 NI Case but at the same time does not want to repay you the money and hence planning for yet another fraudulent agreement.

3) So , if Mr.X is genuinely interested to settle the loan, he should ideally opt for settlement / compromise by committing to settle/ compromise under court supervision.

4) Merits and Procedure for Settlement /Compromise for cases filed under 138 NI Act.

a) Please be informed that Criminal Courts are empowered to refer the matter to mediation and up to six weeks time is granted for arriving at a settlement between the parties and the settlement shall be as per procedure akin to that followed by the civil court under Order XXIII of the C.P.C.

b) So parties to the suit may request the criminal court to refer the matter to Mediation and the criminal court shall list the matter before the concerned mediation centre/mediator on a fixed date directing the presence of the parties/authorized representatives before the mediator on the said date.

c) If a settlement is reached during the mediation, the settlement agreement which is drawn-up must incorporate : (i) a clear stipulation as to the amount which is agreed to be paid by the party;

(ii) a clear and simple mechanism/method of payment and the manner and mode of payment;

(iii) undertakings of all parties to abide and be bound by the terms of the settlement must be contained in the agreement to ensure that the parties comply with the terms agreed upon.

(iv) a clear stipulation, if agreed upon, of the penalty which would enure to the party if a default of the agreed terms is committed in addition to the consequences of the breach of the terms of the settlement,

(v) an unequivocal declaration that both parties have executed the agreement after understanding the terms of the settlement agreement as well as of the consequences of its breach,

(vi) a stipulation regarding the voluntariness of the settlement and declaration that the executors of the settlement agreement were executing and signing the same without any kind of force, pressure and undue influence.

d) Please also be informed that any settlement/ compromise order passed by judge should also clearly stipulate that in the event of default by either party, the amount agreed to be paid in the settlement agreement will be recoverable in terms of Section 431 read with Section 421 of the Cr.P.C.

e) Additionally, for breach of the undertaking given to the magistrate/court, the court would take appropriate action permissible in law to enforce compliance with the undertaking as well as the orders of the court based thereon, including proceeding under Section 2(b) of the Contempt of Courts Act, 1971 for violation thereof.

f) In the event that after various rounds of mediation, the parties conclude that the matter cannot be amicably resolved or settled, information to this effect should be placed before the magistrate who should proceed in that complaint on merits, as per procedure prescribed by law.

Hope this information is useful.

Rajgopalan Sripathi
Advocate, Hyderabad
2169 Answers
394 Consultations

5.0 on 5.0

Hello,

Please don't sign it , as there are certain clauses in this agreement which afterward can go against you.

Hope this helps.

Regards

Swarupananda Neogi
Advocate, Kolkata
2941 Answers
6 Consultations

4.7 on 5.0

1. The said agreement draft for which has been presented before you will bail that person 'X' completely out of the N.I.Act.

2. It appears that he has considered you as very naive to accept his said proposal to treat you as an investor.

3. N.I. Act is not applicable on dishonoured cheques issued under charity, donation, gift etc. i.e. with out having any dischargable liability on the part of the issuer of the bounced cheque.

4. Return the said draft agreement to that person and pursue your 138 case fittingly.

5. Please note that N.I. Act is not applicable even on security cheque.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

Whatever is the situation is, I advice you to not to believe on him, and ask him to pay the same before the court or you won’t come to an agreement mutually.

This would be safe you for now.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

You have done mistake by mistake.

Once the cheque got bounced, you should have proceeded on the same line by filing a case under section 138 NI act

Next time when he gave cheque, you should have insisted for the payment by DD or some other mode to realise your amount.

However even now you can decide about filing a cheque bounce case agaisnt him it is valid.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

Hi,

The terms and conditions as mentioned are mischievous and you are suggested not to sign it. You get it prepared as per your terms and conditions.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

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