LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

RAMESH TEKWANI (TRADING BUSINESS)     03 February 2009

Stop Payment of PDC

My customer has given me post-dated cheques for goods supplied. Two situations have emerged:
1. He gave STOP PAYMENT instructions to the bank, as he did not have sufficient balance in the account on that day. He is under impression that STOP PAYMENT does not attract any action. If there is no sufficient balance on the day of presentation of cheque, and he gives STOP PAYMENT instruction to the bank, can I still prosecute him under the law???

 

2. He sends me written notice through email not to deposit post-dated cheques given to me. Can I still deposit the cheques and if returned, can he be prosecuted?? If no, then what is the solution to recover my money???

 

Thanks/Regards,

Ramesh/Mumbai.



Learning

 8 Replies

Prakash Yedhula (Lawyer)     03 February 2009

 Stop payment would amount to dishonour of cheque and an offence as contemplated under section 138 of the NI Act.


Equally any written communication from the drawer not to present the cheque would not save him from the offence. You can very well deposit the cheque. 

Jaydeep Kurup (ACS, LLB)     03 February 2009

In M/s. Electronics Trade & Technology Development Corpn. Ltd., Secunderabad v. M/s. Indian Technologists & Engineers (Electronics) Pvt. Ltd., the Supreme Court held that:-


"when a cheque is drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person out of the amount for the discharge of the debt in whole or in part or other liability is returned by the bank with the endorsement like (1) in this case, "I refer to the drawer" (2) "instructions for stoppage of payment" and (3) "stamp exceeds arrangement", it amounts to dishonour within the meaning of Section 138 of the Act."

RAMESH TEKWANI (TRADING BUSINESS)     03 February 2009

thank you sir for your kind info. will you pls give SC ruling reference so that i could get copy of the entire order???


 


 

Jaydeep Kurup (ACS, LLB)     03 February 2009

Iam sorry, I dont have the citation except the year ie. 1990-1991.


you can take help of another judgement :-


Rakesh Nemkumar Porwal vs. Narayan Dhondu Joglekar (1993 1 CR 268) = (1993 CRI L J 680) = (1993 MH L J 630) = (72 CC 822) DB BOM wherein it was held that "Any reason for dishonour is an offence".


 

Anuj Kumar Goel (Service)     03 February 2009

Stop payment does not prevent the issuer of the cheque from any liability.You can procecute him under the negotiable instrument Act. and recover the double amount with interest together with a penal provision of 2 year imprisionment. Also you could procucute him under IPC for the cheating which provides for rigrious imprisonment upto 7 years.


I assure you he will deposit all the amount on the very day he receive any summon from the court.

Sukhija (Advocate)     14 February 2009

Hi


 Reply to his written notice through lawyer and ask him to make payment against cheques given by him within limitation from the date of cheque returned unpaid.

RAMESH TEKWANI (TRADING BUSINESS)     24 February 2009






My customer had issued Delhi bank cheque - this was deposited in our bank in Delhi (as we have all India account with Kotak Mahindra bank)- now question arises as to where do we file the complaint- in Mumbai where we have our sales office or in Delhi (since the party is in Delhi & also cheque was deposited & returned by Delhi bank??? Recent Bombay HC ruling (as reported in Times of India issue of 23/02/09) says that case has to be filed in the city where cheque was deposited.....


 

RAMESH TEKWANI (TRADING BUSINESS)     11 April 2009

thank you for your opinion that i can prosecute him for cheating...pls let me know on what grounds can i file case against him for "cheating"- that is section 420 of cr.p.c.....also could you pls cite any case where the accused has been convicted under similar situation????

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register