Cheque
Guest
(Querist) 09 March 2014
This query is : Resolved
An agreement contains a clause that disputes arising between the parties shall be resolved amicably at the first instance. The post dated cheques issued by the party taking loan for re-payment of loan by way of instalments are bounced and the other party issues notice to that party under negotiable instrument act for payment. Will this notice be treated as resolving the dispute amicably.
Please opine.
Advocate Bhartesh goyal
(Expert) 09 March 2014
No,if notice has not been complied than drawee can file complaint for cheque bouncing in court.Drawee can not be prevented to take legal action by alleged agreement.
Guest
(Querist) 09 March 2014
Thanks, that is true, Sir.
Probably, I could not convey properly. In fact my query is as follows:
An agreement contains a clause that disputes arising between the parties shall be resolved amicably at the first instance before referring the unresolved disputes to Arbitrator The post dated cheques issued by the party taking loan for re-payment of loan by way of instalments are bounced and the other party issues notice to that party under negotiable instrument act for payments. If the other party does not make good the payments even after such notice, will this notice of the party under Negotiable Instruments Act be treated as an effort to resolve the dispute amicably, which is a pre-condition for the purpose of referring the dispute to Arbitrator for Arbitration as per agreement.
Devajyoti Barman
(Expert) 09 March 2014
Yes, it can be so treated.
However soon thereafter to be on the safer side it is better to send another notice for honour of cheque so that proceeding can be initiated u/s 138 NI Act.
Rajendra K Goyal
(Expert) 09 March 2014
If the payment not received in response to cheque bounce notice, file case under NI Act.
Guest
(Querist) 09 March 2014
Thanks Barman Sir.
Goyal Ji, my query is different please.
ajay sethi
(Expert) 09 March 2014
notice issued under section 138 Ni offers an opportunity for the debtor to make payment . it would be regarded as an effort to resolve issued amicably . if issue is not resolved amicably and no payment is received legal proceedings under section 138 Ni can be initiated
Guest
(Querist) 09 March 2014
Thanks Sethi Ji.
In fact clarification required is not with respect to legal proceedings under 138 NI Act but whether sending of Notice under 138 NI Act will be treated as effort for amicable settlement for referring the whole matter to arbitration for recovery of those instalments also, which have become already due but not paid by the other party. The agreement contains a clause that disputes arising between the parties shall be resolved amicably at the first instance before referring the unresolved disputes to Arbitrator. The dispute obviously is non-payment of instalments in respect of some of which cheques have bounced and notice under 138 already sent and other instalments, which became due after bouncing of cheques of earlier instalments, have also not been paid by the party.
ajay sethi
(Expert) 09 March 2014
notice issued under Section 138 Ni would be treated as an effort for amicable settlement of disputes between parties . to be on safer side issue another notice mentioning relevant clauses of the contract for amicable settlement
Guest
(Querist) 09 March 2014
I am grateful, Sethi Ji.
R.K Nanda
(Expert) 09 March 2014
no more to add.
R.V.RAO
(Expert) 10 March 2014
agree with sri ajay sethiji.another notice referring agreement clauses for amicable settlement is needed.
P. Venu
(Expert) 10 March 2014
The penal provision provision under Section 138 of the NI Act is an incident of public policy. It intends to remedy a mischief. Parties through private agreements cannot curtail the operation of the provision.
Any agreement opposed to public policy is void.
Guest
(Expert) 10 March 2014
Well advised.
Guest
(Querist) 11 March 2014
Venu Ji, I would humbly request you to kindly elaborate with reference to amicable settlement mentioned in the query.
Nadeem Qureshi
(Expert) 12 March 2014
Dear Querist
when the legal remedy is available then only due to this type of agreement, the law can not be ignored by the parties, the aggrieved party has right to take action as per the law. and sending notice u/s 138 of NI ACt is also amicably settlement without interfere of court of Law, so this notice can be treated as amicably settlement.
Feel Free to Call
Guest
(Querist) 12 March 2014
Nadeem Ji, Thank you very much.
Raj Kumar Makkad
(Expert) 13 March 2014
138 NI proceeding is entirely an independent proceeding than the mentioned clause in the agreement executed between the concerned parties. The notice sent under the provision of 138 NI Act cannot be regarded as an effort to honour the clause contained in the agreement rather is the execution of the provisions of 138 NI Act.
The cheque might have been got deposited and could have been bounced only if efforts of arbitrator might have become futile.
A clear violation of agreement has been made by drawer of the cheque.
