Cheque bounced: remedy?

Yash Rungta (Querist) 12 July 2013 This query is : Resolved

Hello,

I had given loan to a friend of mine in Cash in good faith of Rs.2 lacs. Now, after a few days, he returned the same through a cheque of Rs.2 lacs dated 20th June 2013. Now, when I deposited the cheque he stopped its payment. Hence I received an intimation through my Bank on 29th June 2013.

Now, what is my remedy? Can I file a suit as per Sec 138 of the Negotiable Instruments Act? If so, what is the time limit?

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Advocate Bhartesh goyal (Expert) 12 July 2013
Section 138(b) in The Negotiable Instruments Act, 1881
(b) the payee or the holder in due course. of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.if notice is not complied
with within the given 15 days period then after expiry of such 15 days complainant may file complaint in court within 30 days.

Yash Rungta (Querist) 12 July 2013
Thanks for the info!

DEFENSE ADVOCATE.-firmaction@g (Expert) 12 July 2013
As per law written in the books you can file the case but you have to prove it which is not easy task.

Please read what higher courts have to say in such matters.

1) The High Court was entitled to take notice of the conduct of the parties. It has been found by the High Court as of fact that the complainant did not approach the court with clean hands. His conduct was not that of a prudent man. Why no instrument was executed although a huge sum of money was allegedly paid to the respondent was a relevant question which could be posed in the matter. It was open to the High Court to draw its own conclusion therein. Not only no document had been executed, even no interest had been charged.

AND A VERY RECENT CASE OF APEX COURT-

There was no reliable documentary evidence adduced by the complainant to hold that a sum of Rs..... lakhs was due to him warranting execution of Exhibit P-1 cheque.

and

but the complainant/appellant has conveniently omitted to mention the date on which the loan was advanced which is fatal to the complainant’s case

prabhakar singh (Expert) 12 July 2013
Agree with ADVOCATE DEFENSE and further Income tax Act does not recognise cash transactions of value above twenty thousands.