sec.138 of ni act
truman
(Querist) 25 November 2013
This query is : Resolved
I have given a cheque of Rs.Ten lakhs drawn in my name(SBI A/c Subburaman, Crossed A/c. Payee)Intended to be collected in my savings Bank account with that Bank. I have promised the banker through a letter that the proceeds of the cheque is marked for the payments in my Home loan account and that of my mother maintained in the same bank. The cheque bounced for insufficient funds.The banker had taken action against me under 138(b) of the NI Act. Is it maintainable?.Please advice me what to do.
Rajendra K Goyal
(Expert) 25 November 2013
SBI is the payee in the present case and complaint is maintainable. Bank has to prove that the cheque was received for the amount payable by you to Bank.
T. Kalaiselvan, Advocate
(Expert) 25 November 2013
As per your contention the SBI is the complainant to whom you are indebted?if yes, it is maintainable over the legally enforceable debt.
malipeddi jaggarao
(Expert) 26 November 2013
I differ with the opinion of the above experts. You are the payee of the cheque and given the cheque for collection in your SB account with the SBI. You only can take action against the drawer on bouncing the cheque. This is an account payee and payee's name is yourself. However, you have given a separate letter to the Bank that they can recover the Home Loan overdues from your SB Account once the cheque is credited to your account. You have not endorsed the instrument. In such case according to my opinion, Bank can not invoke Sec.138 of NI Act against you. However, it is better to clear the overdue amount in Home Loan Accounts instead of fighting a case with SBI irrespective of the fact that the case is right or wrong.
Rajendra K Goyal
(Expert) 26 November 2013
Expert malipeddi jaggarao sir,
We understand that the cheque was drawn as SBI A/c Subburaman. SBI is the payee of this cheque and not the Subburaman. A/c Subburaman is the direction to SBI how the proceeds of this cheque would be disposed off.
If we are wrong please guide us.
truman
(Querist) 26 November 2013
Thank you experts for the precious time spent for me.What I infer from the last two expert opinions is that the cheque is payable to SBI as a collecting banker in order to pay the proceeds to my SB account as Subburaman and a letter cannot be construed as an endorsement as the letter is an instruction for two different loan accounts and there is no regular endorsement any where on the face or on the reverse.In this circumstances, can the bank act as a holder in due course to take action against me in 138, where as I am the payee as well as the drawer. It is not the money the bank wants, it is a criminal prosecution or a huge fine the bank expects due to extraneous reasons.Please help me with some citations.
V R SHROFF
(Expert) 26 November 2013
send scan copy of cheque to understand transaction, with details of ur liability, the purpose of drawing cheque..
malipeddi jaggarao
(Expert) 26 November 2013
If the cheque is drawn by author himself with the payee's name as SBI A/c.Subbaraman and Mr.Subbaraman is having SB Account and also Home Loan Account, I fully agree with the views of expert Shri Rajendra Goel. The author is truman and cheque's payee is Subbaraman. Hence the confusion. There is no direction in the name of the payee that the cheque has to be collected only in SB Account. Hence SBI can invoke Sec.138 of NI Act. There is no doubt about this.
truman
(Querist) 26 November 2013
Thank you sirs. The author, the payee/loanee and the drawer are the same ie.Subburaman. The nick name for the email is truman... Hence the answer is maintainable and the advice is to close the account and buy peace.Tank you once again sirs,
malipeddi jaggarao
(Expert) 27 November 2013
It is great that the author has agreed to the proper advice of experts. This forum is designed for such responses so that common people will not pursue unnecessary matters and buy peace without loosing time and money.
