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Sridhar V Sridhar (Employee)     12 April 2023

Cheque bounce case

Received a crossed cheque from a private limited real estate company, authorized signed by a director on it.

This cheque is taken for the refund of an amount, on result of cancellation of sale of flat agreement. 

The cheque is bouncing, My doubt is :

1. Do I file a suit against company or against a person who signed on it in his director capacity ? 

2. If file against any one situation, to what extent the liability will go on, in recovery of amounts.

3. This issue comes under civil nature or criminal? 

4. Do I required to pay court fee, to file a suit ?

Thanks

Sridhar



Learning

 4 Replies

Real Soul.... (LEGAL)     12 April 2023

Since that is cheque bounce case you should immediately issue a legal notice Under Sec 138  and file the complaint in court within one month. You must contact a lawyer .  No court fee required

 

Mean while you should file suit for recovery of money – court fee applies

1 Like

Shakti Maan (lawyer at Supreme Court delhi 9650334626)     12 April 2023

i suggest you you should file case under 138 ni act, because when you win the opposit party will pay double the amount of the cheque as punishment... and he will also get imprisonment ... no court fee in 138 ni act cases...

yo need following documents

1. bounced cheque

2. return memo from the bank.

3. legal notice along with the postal receipt

4. proof of liability

5. any other proof to prove your case

1 Like

Saleem Amin Ibni Noorul Amin B   17 April 2023

Since the person was an agent of the company the case can be against company An agent, in legal terminology, is a person who has been legally empowered to act on behalf of another person or an entity.

You have a choice to file either under section 138 of negotiable instruments act further you could go with Simple Money Suit or Money Suit under Order 37 of the C.P.C. for the recovery of amount involved in the Dishonored (dishonoured, bounced) cheque / check.
1 Like

Aadil (Student)     13 June 2024

Dear Sridhar,

Thank you for your query!  I am Aadil and I will try to answer your question.

The short answer to your question is YES. You file a case against both the company and the director. 

The legislation that governs all the laws and rules regarding cases of cheque bounce is the Negotiable Instruments Act of 1881. The same act defines a cheque bounce in its section 138 as when a cheque drawn by a person on an account he maintains with a banker, for the purpose of fulfilling any debt or liability, is returned by the bank unpaid, either due to insufficient funds or because it exceeded the amount agreed to be paid by the bank from the account as per any agreement made with the bank. 

If the offence of cheque bounce was committed by a company, section 141 of the same act prescribes the people to be held liable. In a case where a company commits the offence of cheque bounce, all the people responsible for the conduct of business of the company, including the director, manager, secretary, or other officer of the company, shall be held liable, along with the company itself. Any individual working for the company may exclude themselves from liability by proving that the said offence was committed without their knowledge, or that they had exercised due diligence to prevent the occurrence of such an offence. 

If such an offence is committed by a company, it is a criminal offence and can be punished as per the punishments prescribed in section 138 of the Negotiable Instruments Act, 1881. Therefore, the convicted individual may be imprisoned for a term not more than two years, or  be ordered to pay a fine that can extend up to twice the amount given in the bounced cheque, or both. A court fee must be paid for a suit of cheque bounce, and such fee varies from case to case and the money given in the cheque that was bounced.

I hope this helps. Thank you for your time and patience!

Regards,

Aadil


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