• Cheque bounce case

Dear Sir,
I got a post dated cheque from my builder in may 2019 of April 2020 in respect of my property.Property 
was not an intermediate of bank loan, It was 20% initial amount and 15000 of emi every month, but builder unable to delivered project.So that builder given a post dated cheque by deduction of 100000/ from total 10 lakh approx in case if he unable to delivered project till april 2020. Project was already going to delayed. It complete 6 year where possession was 4 year. I have BBA.
I have a doubt regarding cheque clearance due to builder and corona pandemic. 

Please give me suggestion that I have to inform to builder before submit cheque in bank or can directly submit cheque in bank.

I have to file a case if cheque bounce and flat delay of possession.

Place of case: Noida extension.

--
Regards
Pramod Kumar
Mobile: +[deleted]
Asked 3 years ago in Property Law
Religion: Hindu

2 answers received in 10 minutes.

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22 Answers

You are not required to inform the builder before depositing the cheque. if you want to file a case for delay in possession you should not encash the cheque as it would be demmed as acceptance of his settlement offer. 

Siddharth Jain
Advocate, New Delhi
6203 Answers
101 Consultations

5.0 on 5.0

You don’t have to inform builder before presenting cheque in bank 

 

2) deposit cheque in bank 

 

3) if cheque bounces issue legal notice to builder on account of dishonour of cheque 

Ajay Sethi
Advocate, Mumbai
89849 Answers
6516 Consultations

5.0 on 5.0

- As per law, you can cancel the agreement for purchasing the said flat , and the builder is bound to refund the entire amount with 10% interest due to delay in possession of the flat.
- Firstly you should send a demand notice after mentioning that due to delay in possession, you are cancelling the agreement, and thereby ask him to refund the entire amount paid by you with interest.

- If the builder fails to response your notice, and not refund the amount within a period of 7 days of time , then you should file a complaint with the Consumer Court under the Consumer Protection Act, against the builder for deficiency in service.

- You can also claim compensation for mental agony and harassment due to delay in possession of the flat by the builder in the said consumer complaint.

- As per law, the builder is bound to refund the entire amount with interest due his fault.

- However, if you want to receive the said cheque amount , then before presenting the same , sent him an information that you are going to present the same, as the validity of the cheque is maximum 3 months .

- Better to follow above as i mentioned , for receiving full amount of payment by you & interest .

 

Good luck and dont forget to rating Positively. 

Mohammed Shahzad
Advocate, Delhi
10663 Answers
132 Consultations

5.0 on 5.0

See you can without informing builder can submit the cheque in bank for clearance. In case the date on cheque is of April you can wait for some time as validity of cheque is 90 days from.date of signing so after corona lockdown ends you can put same in clearing.

In case cheque is dishonored a legal notice under 138 NI act can be give and in case builder fail on notice a complaint can be filed.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

You can directly submit the cheque and if bounced file cheque bouncing criminal case against him. You can also seek compensation simultaneously from consumer court

Prashant Nayak
Advocate, Mumbai
28570 Answers
101 Consultations

4.4 on 5.0

Hi

Go to bank and deposit the cheque directly. 

If Bounces then initiate the process for complaint. 

You can complaint in the consumer court for delay in project but after the Corona thing is over. 

Thanks

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

4.8 on 5.0

Legally speaking you need not have to inform the builder to present the cheque with your bankers for payment in view of the actual position i.e., he has not handed possession of property till date. 

Since the cheque can be presented upto three months from its date, you may wait for the pandemic to come an end, which will be hardly another month, after that you can deposit the cheque with your bankers for payment.

If it is returned by bankers for want of sufficient funds then you can initiate criminal case for dishonor of cheque under section 138 of NI Act.

T Kalaiselvan
Advocate, Vellore
80016 Answers
1674 Consultations

5.0 on 5.0

Builder already delayed a lot and will take advantage lock down another excuse for delay.

Buyer cannot be made to wait indefinite for delivery of possession. You are entitle to full refund with Interest.

Interest shall be same as builder would Hve charged on delayed payment by buyer.

Deposit the cheque, if bounce, send legal notice of cheque bounce and another  notice for full refund  with interest, failure to which , you can file FIR, consumer complaint and to RERA simultaneously.

And if you want possession than demand interest from the date of possession due.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. If cheque is presented to bank for collection and dishonoured then you can prosecute the builder for the offence of dishonour of cheque under Section 138 of NI Act. The process begins by sending a legal notice to the drawer within 30 days of the receipt of intimation from bank.

2. You are not required to inform the builder before presentation of cheque.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

1. In the current scenario, it would always be prudent to take the Builder into confidence and only then deposit the cheque, more so since IF the cheques bounce, THEN too you would be time bound to file cheque bounce cases and this will not be possible for you in the current situtation.

2. You can request the Builder to transfer the funds into your Bank via RTGS /NEFT /IMPS.  This will avoid cheque bouncing and you will know the Builders capacity /intentions.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

You can deposit the cheque directly to bank .

If cheque bounce you must give a 15 days notice to pay the cheque amount.

After expiry of 15 days you can file complaint under sec 138 of NI act.

Kallol Majumdar
Advocate, Kolkata
2837 Answers
14 Consultations

5.0 on 5.0

Dear querist,

The first and foremost important thing to consider while presnting the cheque before the bank is that it should be for the realization of any debt or liability on the part of the payer of the cheque. If that can be established through the builder buyer agreement and in case the cheque was given to you with a condition that if the buyer delays the project then in the lieu of compensation you can seek such amount by presenting that cheque, which can be supported by the BBE, then you can present the cheque for encashment. 

secondly, you mat or may not inform the buyer that you are presenting the cheque. There is no bar from the law. However, you can inform him so that he can release the payment.

lastly, if there is a delay in the project and that builder and property is RERA approved, we have other efficacious remedies which will provide us some better outputs.

you can contact me for consultation.

 

regards,

Yuganshu Sharma

Advocate

Delhi High Court

 

Yuganshu Sharma
Advocate, Delhi
422 Answers
1 Consultation

5.0 on 5.0

1. You don’t have to inform the builder before presenting the cheque in the bank,

2. if the cheque dishonor after it's presentation the bank, you can issue a legal notice to the builder on account of dishonor of the cheque within 30 days

Suneel Moudgil
Advocate, Panipat
2372 Answers
6 Consultations

4.7 on 5.0

Dear Sir/ Madam,

It is advisable to intimate the drawer of cheque before it's presentation. If then the cheque is dishonored send a legal notice and then proceed for case as in provision of 138 NI Act 1881.

Anand Shukla
Advocate, New Delhi
666 Answers
14 Consultations

4.9 on 5.0

You may inform the builder that you are depositing the cheque. The limitation will not run till the courts are closed. You may deposit the cheque and see what happens. If it bounces you may send legal notice.

Rahul Mishra
Advocate, Lucknow
13945 Answers
65 Consultations

5.0 on 5.0

Directly submit it for clearance. In case it bounces, send a legal notice to the builder within 30 days of the dishonour of the cheque. In case the builder fails to pay the concerned within 15 days of the receipt of this legal notice, it will be open for you to file a cheque bounce case against the builder. 

Vibhanshu Srivastava
Advocate, Lucknow
9444 Answers
255 Consultations

5.0 on 5.0

In my opinion, since the validity of your cheque is upto June, 2020, you should wait till June 2020 by which time the lockdrown may be withdrawn.  Send him a legal notice through local advocate and thereafter file a complaint in the court.  During the pendency of the complaint under section 138 NI Act, you may refer the matter to Mediation Centre or in case, the builder agrees to make the payment in easy installment, wait, otherwise, contest the case forcefully.

Good luck.

Dalip Singh
Advocate, New Delhi
1053 Answers
36 Consultations

5.0 on 5.0

Dear Sir,

Now a days, recovery of amount through cheque bounce very easy, economic,early and effective. Never say that you are going to deposit the cheque get it deposit within due date and get the amount or bounce it and then follow the bellow given steps. You will lucky in future in you circulate such pendency of cheque bounce the builder may come to you and compromise. Pleas go ahead.

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Cheque bounce FAQs

LATEST AMENDMENTS

The Supreme Court on May 8, 2019, in the case of Birendra Prasad Sah v. State of Bihar has observed that cognizance of a complaint filed under Section 138 of the Negotiable Instrument Act, 1881, can be taken by the court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.

Section 143A of the NI Act states the court can order interim compensation to the complainant during the pendency of the case. This section was inserted after the amendment to the NI Act in 2018. It was, however, provisioned that the compensation amount shall not exceed 20% of the amount of the cheque.

FAQs

  1. In which court do I need to file the complaint case under Section 138 N.I. Act in case drawer did not pay after receiving notice? 

    A complaint case under Section 138 N.I. Act can be filed in any competent court in whose jurisdiction any of the following acts have occurred:
    a) Place of drawing of the cheque,
    b) Address of bank where cheque was presented (holders bank address),
    c) Address of bank where cheque is payable (drawers bank address)
    d) Place from where notice was received by drawer of cheque

    a. It is possible that each of these four acts could have occurred at different localities. The complainant can choose any one the above places to determine jurisdiction of court where they wish to file complaint.

    2. What can I do if it has been more than 30 days since I received information of dishonour of cheque?

    If the cheque is still valid i.e. 3 months (currently) have not passed from the date of its issue, you can represent the cheque again to your banker as there is no restriction regarding the number of times a cheque can be presented and that every subsequent representation and dishonour gives rise to fresh cause of action for filing complaint. It may be noted that once a notice for payment is given then the holder must file a complaint under Section 138 N.I. Act within 30 days from expiry of notice period as a fresh cause of action will not arise if the cheque is presented again and it is dishonoured and failure to file complaint will lead to loss of remedy available under Section 138 N.I. Act.

    3. How long after notice has been served can I file a case against the drawer?

    After giving notice you need to file a complaint case against drawer under Section 138 N.I. Act within 30 days from the expiry of notice period i.e. 15 days. In other words you need to file complaint case against drawer within 45 days (15+30) from the date of issue of notice. Failure to do so will lead to loss of remedy under Section 138 N.I. Act; however, you can file a summary suit for recovery of money and initiate criminal proceedings under Section 420 I.P.C. within 3 years from date of issue of cheque.

    4. What can I do if I do not have the drawer's address?
    You need the address of the drawer of cheque to issue notice as contemplated under provisions of N.I. Act; also the address is necessary if you wish to avail other legal remedies available to you. You can send the notice to the last known address. In case the address of the drawer has changed and the drawer has not left a forwarding address and the notice is returned with the noting that addressee is not available at the address or addressee has left without leaving a forwarding address then you need to file a complaint case after 15 days (notice period) of receipt of such information or returned notice and within 30 days from expiry of notice period. Failure to do so will lead to loss of remedy under Section 138 N.I. Act; however, you can file a summary suit for recovery of money and initiate criminal proceedings under Section 420 I.P.C. within 3 years from date of issue of cheque

    5. What should I do if the notice was returned and could not be served to the drawer?

    When a notice is returned to the sender as unclaimed or with the noting that addressee is not available at the address or addressee has left without leaving a forwarding address then the date of receipt of such information or returned notice would be the commencing date for the notice period of 15 days. Complaint case under Section 138 N.I. Act must be filed within 30 days from expiry of notice period. Such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address or previous address.

    6. Can Mohan Law Chambers assist in drafting of legal notice as required by Section 138 of N.I. Act.?

    Yes, Mohan law Chambers offers assistance in drafting of legal notice as required by Section 138 of N.I. Act.

    7. How long after receiving information of dishonour of cheque do I have to serve notice to the drawer?

    You need to serve a legal notice to drawer of cheque demanding payment of cheque amount within 30 days of the receipt of information from your banker regarding dishonour of cheque under Section 138 N.I. Act.

    8. What if the cheque was given for a reason other than to discharge a legally enforceable debt or other liability?

    In cases where cheque was given for a reason other than to discharge a legally enforceable debt or other liability, the provisions of Section 138 N.I. Act are not applicable e.g. Cheque given as Gift, in charity, donation etc.

    9. Can a cheque issued in security attract offence under Section 138 N.I. Act?

    With respect to the dishonour of cheques given as security, legal position is not very clear. It is subject to presumption and proof thereof that may be given by either party in support of their case. High Court of Delhi in the case of M/s Datt Enterprises ltd. vs. V.K.Dua held that the security cheque does not attract the provisions of Section 138 N.I. Act., if cheques were given as a security cheque as per past practice and pending reconciliation of accounts and not towards discharge of any liability.

    10. What is a legally enforceable debt or other liability?

    Legally enforceable debt or other liability should be such which is contracted in accordance with law and which is not opposed to public policy viz., wagering contracts, debt obtained for running brothel or gambling house etc.

    11. What is Section 138 N.I. Act and why is remedy available under it preferable to remedy available under other laws?

    a. Section 138 N.I. Act was made to provide an additional criminal remedy over and above the civil remedies available; to provide a speedy and effective remedy to holder of dishonoured cheque.
    b. Summary suit for recovery of money takes time (approximately 3 to 5 years) and criminal proceedings under Section 420 I.P.C. does not provide any provision for recovery of money and is meant only for prosecution of the drawer of the cheque who entertains dishonest intention to cheat. 

    12. What is a summary suit for recovery of money?

 
Summary suit is a civil legal proceeding initiated for recovery of money due under any written agreement, cheque etc. These proceedings are different from normal recovery suit, as here the liability to prove that petitioner is not liable to recover any amount is on defendant for which he needs to obtain leave to defend from the court.

13. What is the validity of the cheque in day to day business?

The current validity of cheques is 6 months. However, please note that from April 1, 2012. The validity will change to three months as per recent directive of RBI (under Sec. 35A, Banking Regulation Act, 1949)

14. What can I do if a cheque given to me has been dishonoured?

a. The holder of a cheque that has been dishonoured can seek remedy in the following manner:
i) Action under Section 138 Negotiable Instruments Act (N.I. Act): Give notice under within 30 days of receipt of information of dishonour from the bank. In case of non- payment by the drawer within the notice period of 15 days, then the holder must institute a complaint case for prosecuting drawer within 30 days of expiry of notice period.

ii) Civil Action as Summary Suit: Issue notice within 3 years from issue date of cheque and institute a summary suit for recovery of cheque amount along with interest and legal expenses. The notice can also be used while filing summary suit for recovery of money.

iii) Criminal Action: Initiate criminal proceedings by filing complaint under Section 420 Indian Penal Code (I.P.C.) within 3 years from issue date of cheque. Please note that there is no provision for recovery of money under Section 420 I.P.C. and this section is meant only for prosecution of the drawer of the cheque when dishonest intent to cheat in inferred.

15. What documents / evidences do I need at the time of filing complaint case under Section 138 N.I. Act?

You will need at the minimum, the following:
a) Proof of service of notice - receipt of postal department / courier
b) Copy of notice
c) Cheque in original

16. What can I do if I do not file a complaint within 30 days from expiry of notice period?
If you have not filed a complaint case within 30 days after expiry of notice period, you can file a summary suit for recovery of money and initiate criminal proceedings under Section 420 I.P.C. within 3 years from the date of issue of cheque.

17. What can I do if it has been more than 30 days since I received information of dishonour of cheque and 6 months has passed from the date of issue of cheque?

a. Other remedies are also available to recover the cheque amount. You can file a summary suit for recovery of money and initiate criminal proceedings under Section 420 I.P.C. within 3 years from date of issue of cheque. In case the cheque was never presented during its validity period then a summary suit is the only available remedy for recovery of money. 

(Notice can be given to drawer up to 3 years from date of issue of cheque for instituting a summary suit for recovery of money. Criminal proceedings for prosecution of drawer can also be instituted within 3 years from date of issue of cheque under Section 420 I.P.C.)

18. The drawer is asking me to settle the claim at a reduced value. What should I do?

Its up to you to settle the claim at a reduced value as the same will save your precious time, as well as legal hassle. Now-a-days courts are also encouraging amicable settlement between the parties. However, if you settle the dishonoured cheque amount at a reduced value, you will lose all remedies available under law.

19. What remedy do I have if the drawer delays in settling after conviction?

In a recent 2010 judgement, Supreme Court has laid strict rules to deal with such delaying tactics. Delay in settling cheques bounced will cost up to 20% of the cheque amount post-conviction. This is detailed as: 10% at District Court level; 15% at the High Court level; and up to 20% at the Supreme Court level. For e.g., Defaulter going for settlement will have to pay 10% of the cheque amount to avoid going to the jail.

20. Can I recover interest and legal expenses from the drawer of the dishonoured cheque?

Yes, you can recover interest and legal expenses from the drawer of the dishonoured cheque in a summary suit for recovery of money, but not in the proceedings initiated under Section 138 N.I. Act. However, under Section 138 N.I. Act the award maybe higher than the cheque amount.

21. What should I do if the drawer does not make payment upon receipt of notice?
You can adopt either or any of the remedies available to you:

a) Can file a criminal complaint against drawer of cheque under Section 138 of N.I. Act.

b) Can file a summary suit for recovery of money, interest and legal expenses.

c) Can file a criminal complaint against drawer of cheque under Section 420 of I.P.C. Please note that there is no provision for recovery of money under Section 420 I.P.C. and this section is meant only for prosecution of the drawer of the cheque.

In case a person has filed suit for recovery, then he is not precluded from filing a complaint under Section 138 of the Negotiable Instruments Act and Section 420 of the Indian Penal Code. The pendency of criminal matters would not be an impediment to proceeding with the civil suits.

Top of Form

Kishan Dutt Kalaskar
Advocate, Bangalore
6069 Answers
409 Consultations

4.8 on 5.0

1. You should inform builder before depositing the cheque.

2. Due to this corona lockdown all the contracts are now under forced Majeure clause and all the liabilities of parties are altered due to pandemic conditions.

3. You should deposit the cheque after the lockdown is lifted before the date when cheque become stale. 

Mohit Kapoor
Advocate, Rohtak
10687 Answers
7 Consultations

5.0 on 5.0

DEAR Sir,

You are not required to take clearance for depositing cheque in bank and you may file the case of both kinds i.e. cheque bounce and delay of possession. 

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

The cheque is valid for three months from the date written on the cheque.  

If you feel that the project is going to be delayed, then wait till next month i.e., May, 2020, and present it for collection, if it is returned unpaid, then you need to issue notice followed by filing private complaint.

Make sure that, the Builder did not say anywhere in writing that the said cheque is given as surety.

NOTE: Issuance of notice and filing of complaint are time bound as such, be alert.

 

S Srinivasa Prasad
Advocate, Hyderabad
2876 Answers
9 Consultations

5.0 on 5.0

Under Section 138 of Negotiable Instruments Act, you have a right to file a suit against the person for the bounced cheque and recover the amount as per law. 

Mohammed Mujeeb
Advocate, Hyderabad
19036 Answers
32 Consultations

4.5 on 5.0

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