Section 138, negotiable instrument act 1881
Deepak Nair
(Querist) 28 November 2011
This query is : Resolved
Can a beneficiary to a transaction be made a party to the proceedings under section 138 of Negotiable Instruments Act 1881 if the cheque is issued by another person on behalf of the said beneficiary?
If yes, could you please provide a citation to that effect?
M/s. Y-not legal services
(Expert) 28 November 2011
no the beneficiary can not be charged under section 138 of n.i act..
cheque should be issued to disclose the legal dept..
so if the cheque is issued by another person on behalf of the said beneficiary mean the case is not maintainable..
M/s. Y-not legal services
(Expert) 28 November 2011
even am little doubt with my answer..
so just wait till some more replys.
am also waiting..
Deepak Nair
(Querist) 28 November 2011
Dear Sirs,
Thanks for your reply. But I am still confused. What if the drawer of the cheque accepts the liability by giving a declaration in writing while issuing the cheque to the drawee?? Will he be liable?
M/s. Y-not legal services
(Expert) 28 November 2011
dear deepk, i can answer you., but without confirm that my earlier comment is right or wrong., i dont like to add further replys in my same opinion. so i will back here evening.,
untill wait.,
Guest
(Expert) 28 November 2011
Dear Deepak,
If the drawer of the cheque accepts the liability, both the drawer as well as the beneficiary of the transaction are liable to be sued, as the beneficiary owes the amount in consideration of which the cheque was drawn but failed to get his liability cleared on account of dishonour of the cheque, may that be drawn by third party on his behalf, but is in his knowledge.
Deepak Nair
(Querist) 28 November 2011
Thanks a lot Dhingra Sir for a satisfactory reply.
Dear Tom, this is a very helpful to update our knowledge. Let me thank Dhingra sir on your behalf too.
Guest
(Expert) 28 November 2011
You are welcome Mr. Deepak.
Rajeev Kumar
(Expert) 28 November 2011
Agree with Dhingra JI
Shonee Kapoor
(Expert) 29 November 2011
In complete agreement with Ld Mr. Dhingra
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
V R SHROFF
(Expert) 01 December 2011
Dear Deepak Nair,
Only a signatory of the cheque is liable u/s138: nobody else. Process cannot be issue against a person who did not issue cheque, and /or did not signs the cheque.
In one of my cases, husband and wife had joint a/c , and paid cheque out of a joint Bank ac. , purchasing. Wife purchased a Computer, taken delivery, signed Delivery Challan, & Bill in her name, and her Husband signed & issued the cheque, for the said bill with the said amount. , bill was in name of Wife. JMFC issued process against both h w . In Revision the Process against Wife was SET ASIDE , BEING illegal, as she is NOT A SIGNATORY of the returned Cheque, even though she was beneficiary & a Jt a/c holder.
Read sec 138 “When any cheque drawn by a person on an a/c mtn by him.”
I have citations, but for want of time, i m sorry.
