Cheque dishonour

yes ,you give a police complaint., but i prefer to take Negotiable instrument case.

Contact any lawyer. He will serve legal notice to the party. And after 15 days, file a case in the court.  The court will be where the branch where cheque is deposited. The case will be under Section 138 of NI Act.  

When did the cheque bounce? First send him a legal notice.

Sir,

Let me do the needful for you, give me a call at 9899011450.

Warm Regards

Kapil Chandna Advocate

9899011450

Now a days cheques are becoming non NIs on account of conditional order by the drawer such as 'account payee' etc. Ask your advocate to ensure this before proceeding to sue under NI Act.

Mr.Meghavath, I couldnt understand your point. Could you please explain in detail?

Once A/C payee is mentioned in the cheque U are bound by the provisions of NI ACT.

No reference is available in NI Act with regard to account payee. Pls guide me if any.

Mr. Kumaran, any cheque to be recognised under NI Act must have certain features as defined under NI Act. A "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand, a "bill of exchange" is an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. There is no reference of account payee in entire NI Act. Any cheque marked a/c payee tantamounts to a conditional order whereas a cheque as defined under NI Act must contain an unconditional order. No doubt a/c payee marking is widely in practice to restrict negotiability other than payment to named payee. But, it is well settled propostion of law that "Practice, however long, cannot override the law, and if it be repugnant to statutory provisions, Courts of law will refuse to recognise it and will not allow a breach of the law to be; perpetuated". In practice, any instrument marked account payee is only a payment order in favour of a person none other than payee named as also such payee is restricted to endorse for onward negotiation. Thus, such payment orders fall outside the purview of NI Act.

Meghavath M R

There is a reference in NI Act, for deposit in account, crossed cheques come closer to what you are referring to.

Your argument that "Account Payee Cheques" do not come under the purview of NI Act, is not based on sound logic. Cheque nowadays is a transaction between two parties only  (drawer & Payee), so in most of the cases payee is the holder (with claim), and in such cases if the cheque gets dishonored then taking a defense that look it was a crossed cheque and only account payee so the cheque does not come under NI Act and I am a free man......Are you saying this, Mr Meghavat ?

Mr. Trivedi,  a crossed cheque can be endorsed any number of times till its payment, only requirement is, it shall remain crossed always meaning it cannot be paid across the counter and has to be routed through an account. Your view that "Cheque nowadays is a transaction between two parties only  (drawer & Payee)" may be true as far as practice is concerned. But, would it require the provisions of NI Act to get transacted between two parties only (drawer & Payee)? A standing or general instruction by the drawer to his banker will perform this function. Therefore, these cheques (standing instructions) are only non negotiable instruments used in the cheque format by practice. As such, would it be legal to take undue advantage of NI Act when these instruments get dishonoured? As far as NI Act is concerned, account payee has no relevance and practice is only a practice which cannot be construed as law. At the most, as per the practice prevailing, the payee holder of these instruments can only deposit to his/her own account without further negotiation or transfer. The drawer cannot compel the payee holder to open a bank account. Negotiation is a right of the holder which he may excercise or not. When a holder cannot negotiate an instrument, where is the claim lies under NI Act? Of course, I will be a free man from NI Act penal provisions if I issue an account payee cheque and it gets dishounoured. As already submitted, account payee marking tantamounts to a conditional order whereas a cheque as defined under NI Act must contain an unconditional order.