• Cheque bounced

Hello, 

i had helped one of my friend by paying 6 Cr Rs via bank transfer for a period of 1 year in 2017, to secure the loan we made a notarized loan contract and i collected PDC chqs for the entire amount, 

he missed his payment dates and requested me to extend the time, i agreed and we made a new notarized contract and new chqs, this has been done 2 times as he kept asking more time.

also he promised if he fails to pay this time he shall give me his brother in laws apartment in pachim vihar, for that he made a saprate notarized contract signed by his B-I-L

i am tired of chasing him, i want to take legal help please advise how strong this case looks to you and how much time does it take to reach on some decision in such cases
Asked 6 months ago in Criminal Law
Religion: Muslim

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12 Answers

Hello, 

 

You do have a strong case. You can immediately send that person a legal notice and after that, you can file both a criminal case and case for breach of contract in order to recover your money. 

 

Regards 

Anilesh Tewari
Advocate, New Delhi
17863 Answers
324 Consultations

5.0 on 5.0

A definite amount of money was taken from you ie a debt exists. You have the cheques. Present the cheque to the bank and if they bounce then file a case against him.

Rahul Mishra
Advocate, Lucknow
12251 Answers
29 Consultations

5.0 on 5.0

Dear Sir,

It is a strong case and it will be disposed within 12 months in Indian Courts by first court. . The procedure is as follows.

==============================================================

Cheque bounce FAQs Negotiable Instruments Act

1A. Amended Cheque Bounce Provisions- 143A & 148…what is it?

Ans:  Section 143A- It empowers the Court to order the drawer of the cheque to pay Interim Compensation  - 20% - Without depositing this amount the accused cannot defend the case.

Section 148 – It empowers the Appellate Court to order payment pending the appeal against conviction

The Appellate Court may order the appellant to deposit an amount which shall be a minimum of 20% of the fine or compensation awarded by the trial Court.

This amount shall be in addition to the amount already paid by the appellant under Section 143A.

It received the assent of the President and was notified in the Official Gazette on 02.08.2018

  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 Kishan Retd judge Law Chambers assist in drafting of legal notice as required by Section 138 of N.I. Act.?

    Yes, Kishan Retd judge 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.

 

Kishan Dutt Kalaskar
Advocate, Bangalore
5787 Answers
283 Consultations

4.8 on 5.0

Hi,it is advisable to get the above said cheques dishonoured and file a criminal complaint under 138 NI Act ...The criminal trial relatively is faster as compared to civil cases , also it puts more pressure upon the accused as it contains legal imprisonment ,which increases the chances for settlement...

Hemant Chaudhary
Advocate, Gurgaon
4605 Answers
48 Consultations

4.9 on 5.0

Issue legal notice to your friend to repay the loan with interest 

 

2) if cheque’s are dishonoured file case of cheque bouncing under section 138 NI 

 

3) you can also file summary suit to recover the dues with interest 

Ajay Sethi
Advocate, Mumbai
82094 Answers
5156 Consultations

5.0 on 5.0

- Since you are having cheques for discharging the loan liability , then present the same for the recovery to the amount .

- If, given cheques bounce , then you can file a compliant before the court for recovery and punish him for the said offences. 

- Further , you can also recover the said amount on the ground of cheques and agreement after filing a suit under section 37 CPC , which is very fast summary suit for the recovery of the amount. 

- If you have entered into an agreement with his BIL as well, then you can file a case against him as well for claiming the said flat in his name . 

 

You can contact me in Delhi , if further advise needed. 

Mohammed Shahzad
Advocate, Delhi
6719 Answers
71 Consultations

5.0 on 5.0

Hi, you have to deposit the cheque in your bank account with in 3 months on the date mentioned in the cheque. if the cheque is dishonored then issue a legal notice and file  a complaint under section 138 of the NI ACT. As you have transferred the amount in online you will get back the money. Further Notarized documents will not help you to prove the case.

Pradeep Bharathipura
Advocate, Bangalore
5020 Answers
266 Consultations

4.5 on 5.0

You can send him a legal notice under section 138 of NI act and later file complaint for the same for cheque bouncing

Prashant Nayak
Advocate, Mumbai
23360 Answers
49 Consultations

4.4 on 5.0

If he is not repaying the loan amount then you can file a cheque bounce case provided you present the cheque to your bank and the same is returned with the reason insufficient funds.

The case can be filed under section 138 NI act, in that after receiving the summons he has to deposit the 20% of the cheque amount before court to participate in the case or else he can be arrested.

The time taken for disposal of the cheque bounce case or a money recovery civil suit cannot be predicted owing to various reasons.

 

T Kalaiselvan
Advocate, Vellore
72168 Answers
1078 Consultations

5.0 on 5.0

If you wish to pursue the matter legally with the court of law, please firstly issue a legal notice as you are bound by the limitation mandated in the Negotiable Instruments Act. Once the notice is issued, the matter will be filed with the Magistrate courts and accordingly, the summons will be issued. Incase the accused is likely to flee India, then in that case you can file a petition before the High Court for impounding of passport. 

In your case since, there is also an agreement, you can also approach the civil court for recovery of your money and there you may take out an application for arrest before judgment and / or attachment of property. 

Garima Anil Mehrotra
Advocate, Mumbai
512 Answers
1 Consultation

4.9 on 5.0

Contact a lawyer and send him legal notice through your lawyer after 15 days file case against that person and put every cheque details, bank statements, agreements, call recording, text messages with that person. 

usually decision comes in 6-8 months but sometimes it also depends on court speed and lawyer.

Sanjna Vaishnav
Advocate, Gandhinagar
57 Answers

Not rated

you have good case against the person. certainly you have recovery options in indian law but i am not sure if you can get the property he mentioned unless it is in his name. take any document of surety of his brother in law and if he gives then you can lay hand on the property also. I understand that you gave a lot of amount therefore you have to move cautiously and by planning. make sure he dont run away then file cases of recovery and cheque bounce. if you will give some money to police then they may arrest him also. so you need to plan it well. engage any good lawyer. i also live in paschim vihar in delhi and property rate is not so high unless it is really big property so plan accordingly.

Gopender
Advocate, New Delhi
366 Answers

4.9 on 5.0

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