Last Updated on June 21, 2024 by Satish Mishra
Dishonouring of cheques is a common sight in India. Numerous cases for bouncing of cheques are filed every day before the courts of India. A Hyderabadi team of police had recently come to Karnal, Punjab to summon the accused in a case of a bounced cheque. The most prominent laws governing cases of on Cheque Bounce include Negotiable Instrument Act, 1881, Criminal Procedures Code; 1973, Indian Evidence Act, 1872, and the Criminal Rules of Practice and Circular orders, 1990 among others.
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Facts of the case
Ghansham Dass, the complainant in the present matter, claims that Sandhya Kaushik, wife of Pundri MLA Dinesh Kaushik availed a loan of Rs.1 crore from him, his wife and a friend for the setting up of a stone crusher in Yamunanagar in September last year. Sandhya was supposed to pay Rs. 10 lakh as instalment each month with Rs. 2.5 lakh as interest. But according to the complainant, after the initial two or three months, no instalments followed; and this was refuted by the accused. Dinesh Kaushik, the MLA, was Sandhya’s guarantor, and even taking up the issue with him was of no help. Hence, two police complaints were filed against Sandhya besides FIRs of cheating in Hyderabad.
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A team of Hyderabadi police reached the residence of the MLA on 18 August, 2019 to summon his wife for the cheque bounce case against her. The MLA and his wife were not present at their residence but the team had to face protests accusing the complainant of tarnishing the image of the MLA before the elections.
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What constitutes a cheque bounce case?
In a cheque bounce case, there’s a cheque which is drawn and the same is presented to the bank. The cheque is returned unpaid by the drawee bank (usually due to insufficient funds) and payment demand notice is issued to the drawer of the cheque. If the drawer fails to make the payment within 15 days of the receipt of notice, a case for bounced cheque can be filed under Section 138 of the Negotiable Instruments Act, 1881.
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Section 138 states that:
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 19 [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless—
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(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, 20[within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
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(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.— For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.]
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You may also take expert legal advice from best/top/expert cheque bounce advocates/lawyers in Chandigarh, Mohali and Panchkula for any of your specific grievances involving Negotiable Instruments Act/Section 138..
The honourable Supreme Court also took into consideration use of modern technologies for enabling speedy disposal of cases under Section 138 of the Negotiable Instruments Act, 1881 in the case of M/s Meters and Instruments Private Limited & Anr. v. Kanchan Mehta.
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This post is written by Simranjit Kaur of Army Institute of Law. For more information on the subject, please dial 9988817966.
