Am running a compnay here and its a software pvt ltd compnay. We have some investors from inside family and they had done some investment before one year. As per terms and condition , payments with profit will be paid on each month per specific period of time. From last may itself it was fine and everything goes smooth. But gradually my business going dull and i cannot able to pay to them as per terms. I alredy gave them cheque for the amount including profit.they had submitted the cheque last week and they said they are going legally with this matter. Cheques i gave is dishourned due to stoppaymwnt (i alredy done stop payment of cheque when the time of issue of cheque to them). Is there any way to escape from leagl procedure?.
Here are some points that you can check.
1: investor is my relative
2: there is no valid proof of payment document or agreemnt only companey letter head text for terma and condition.
3: money not paid viz bank transfer - they gave by hand.
4: one of the investor is NRI and other one is gov school principal.
5: am a tax payable person have good ITR.i gave tax to this amount also.
6: i issued a compnay cheque.
Asked in Family Law from Trivandrum, Kerala
1) in case cheque is dishonoured on grounds of stop payment complaint under section 138 NI is maintainable against the company and its directors in charge of day to day management of company
there is a presumption that cheque was issued in respect of debt due and payable
2) in addition summary suit can be filed by your relative to recover cheque amount
3) since drawee are relatives better arrive at an amicable settlement with them
4) cheque bouncing cases take over 5 years to be disposed of
Dishonor of cheque is an offence as per section 138 of N.I.Act and you can not escape from your legal liabilities, only you can lingering the matter, it will be better to talk to them and get some time to repay the cheque amount.
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Advocate, New Delhi
Even if there is no proof of formal agreement but they can prove an agreement since you paid them in regular intervals before.
Stop payment f cheque is equivalent to dishonour of it and hence if they wish they can file a case against you u/s 138 NI Act for cheque bouncing which is quasi criminal proceeding.
So better negotiate with them, ask them not to file suchc ase and buy some time to repay at least their principal amount.
1. Please not that even oral agreement is valid if evidence can be submitted. In your case the terms have been written on letter head of your company which will be considered as a valid agreement.
2. What ground you have shown while giving stop payment instruction?
3. Even if they had given you cash which you have received by issuing a receipt, you can not ignore your liability on them to repay your loan.
4. They will initiate action under Sec.138 of N.I. Act.
5. It will be prudent on your part to settle the matter amicably with them in your interest.
1. A cheque dishonoured due to stop payment instructions has the same legal consequences as one which is dishonoured due to insufficiency of funds in the account of the drawer. It is an offence punishable with an imprisonment of up to 2 years on conviction.
2. At this stage there is nothing you can do if the cheque bounce prosecution has not been launched. Once the case is filed and the court summons you then you can contest the case on the ground that the cheque in question was not issued in discharge of a legal liability.
3. Reply to the demand notice, as and when you receive it.
All those points what you have stated above in the question will be handy to you during trial proceedings of the case.
First allow them to file a cheque bounce case and afterwards dring trial you can adopt all these strategies to defend yourself.