Cheque bounce
N.Damodaram Naidu
(Querist) 11 March 2014
This query is : Resolved
Dear Sirs,
My friend gave a hand loan of Rs.500000/- to a well known person for a term of two months and in consideration of that he got a cheque from the borrower. After two months my friend approached the borrower for repayment of loan. The borrower expressed his inability to repay the money and asked my friend to present the cheque after twenty days.
After that as per request of the borrower my friend presented the cheque after twenty days through his banker for recovery of money and the cheque was returned with an endorsement 'the account was blocked'. Then my friend approached again the borrower and he did not respond to my friend. Then my friend approached a local lawyer for suggestion. The lawyer replied that as there is no evidence other than the cheque for the loan, we cannot take any action against the borrower through Sec.138 of N.I. Act and the said section of the act refers to only legally enforceable debt.
I request all to help in this matter. Is there any decision of the Apex Court in the similar cases where there is only cheque and no other documentary evidence? please give reference if any.
Thanking you all.
M.Sheik Mohammed Ali
(Expert) 11 March 2014
where r u from ?
do you have any other document like pro note and twenty rupees stamp paper with signature of the borrower, confirm me
ajay sethi
(Expert) 11 March 2014
ho was loan advanced by cash or cheque ? have you shown the loan advanced in your income tax returns?
in case cheque has been issued there is presumption that it was for legally enforceable debt . send him legal notice on account of dishonour of cheque . if your friend fails to pay then file complaint for dishonour of cheque .
T. Kalaiselvan, Advocate
(Expert) 11 March 2014
If the loan was disbursed through bank/cheque/dd, you have almost won the case, if not, you still can issue a lawyer's notice, and file a private complaint before a JMFC court within your jurisdiction u/s 138 of NI Act.
V R SHROFF
(Expert) 12 March 2014
138 ni can be initiated.
N.Damodaram Naidu
(Querist) 12 March 2014
Dear Ajay Sethi,
My friend gave the loan through cash and did not receive any promissory note or stamped and signed document except a cheque. He is an employee and has an average annual income of Rs.200000/- which has been showing on income tax returns every year. He did not show this hand loan in I.T. returns.
My question is apllicability of section 138 of N.I. Act in this case and is there any citation? Please mention if available
Nadeem Qureshi
(Expert) 12 March 2014
Dear Querist
section 138 of NI Act read with section 420 of IPC will be applicable in this case. send a legal notice to borrower through an advocate and wait till the completion of 15 days from the receipt of the notice after that file a criminal complaint against him/her u/s 138 Ni Act r/w section 420 of IPC.
for citation contact personally or over the mail or phone.
Feel Free to call
ajay sethi
(Expert) 12 March 2014
loan has been advanced in cash . there is no proof of loan having been given . loan has not been shown in IT returns . it will be difficult for you to prove your case
DEFENSE ADVOCATE.-firmaction@g
(Expert) 12 March 2014
Cash loan and without any documents is not a legal liability.
SC in many cases has repeated this, from a 2007 SC citation =
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.
Guest
(Expert) 12 March 2014
Only mutual settlement can be the answer to your problem, as your friend would not be able to provide a solid proof of grant of loan.
Biswanath Roy
(Expert) 12 March 2014
Send a legal notice to the borrower alleging that you gave him Rupees...........as accomodation loan in cash on......and in turn the borrower gave you a post dated cheque for the same amount to create belief in your mind for repayment but as and when the cheque was presented before the borrower's Banker through clearing the said cheque was returned with the remark.......... AND ASK THE CLARIFICATION FROM HIM. Send a true typed copy of such notice under certificate of posting simultaneously with Registered with A/D Post. Wait for the result.
T. Kalaiselvan, Advocate
(Expert) 13 March 2014
By issuing a lawyer's notice, you create the circumstances for having given a loan, based on which you may draft a complaint u/s138 of NI act, clever and crafty drafting may sometimes help you win the situation.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 14 March 2014
Well Mr Kalaiselven you have also joined the rank where some body can defy even SC directions.
Still if I am the defense advocate in this matter than you have to face following actions.
1) The person claiming to have given loan is black money and I can not accept any loan above twenty thousand in cash.
2) I have never given any cheque and the complaint cheques and signatures on them are fabricated which even any novice having knowledge of computers can do.
3) I will also seek IT records where in whether the person had so huge cash in his books.IT will reopen all his assessments for previous years and will impose heavy penalties.
4) If he claims cash received from others than it will attract multiple offenses under the IT act which includes fines and prison on him as well as on all those persons who are alleged to have given cash to the lender.
5) I will also seek help of the local state agency that this person is running illegal money lending business which has very draconian provisions and powers in low level offices other than police.
Please try to give defense under these circumstances to the so called lender.
Biswanath Roy
(Expert) 14 March 2014
We are suppose to give opinion and advice to the querists without knowing anything behind the curtain. That is why in all of my posts I state first that " AS TO YOUR STATEMENT OF FACTS ETC. "
N.Damodaram Naidu
(Querist) 14 March 2014
Mr.Anonymous adovacate defence,
If you want give suggestions, give properly and don't discourage querists.
1)Who said to you the amount given by my friend is black money and why can't a person having sufficient funds in his hands give a cash loan more than twenty thousand rupees?
2)How can any person having computer knowledge fabricate a cheque of a bank? Is not there any forensic expert to prove forged and fabricated cheque?
3)In fact, my friend is a regular IT assessee for the last fifteen years and have been paying the tax regularly.
4)In my query I did not say that my friend received cash from others and lend it to another person.
5)I think you are not aware that any person can advance any amount to his friends as help. How can you say a person who helped his friend by giving Rs.500000/- as a hand loan for a short term of two months without claiming any interest as a money lender? Is meaningful? Can any local state agency interfere in this matter?
I hope you are an expert with legal knowledge but your defense is very poor so that any person who has not any legal knowledge can defend your plea.
Biswanath Roy
(Expert) 14 March 2014
At KOLKATA in the Burrabazar it is not uncommon to give cash loan for Rs.30,00000 by a trader to another trader in the cotton thread market and Bullion market for a short term without any receipt.
prabhakar singh
(Expert) 14 March 2014
Section 40A of the IT Act prohibiting cash transactions is relevant here.
Section 6DD is an exception of it.
An employee is not required to show capital account in his return yet no one can carry cash in hand as an individual more than 50,000/=00 is an other rule.Flouting it will attract evasion of wealth tax.
A cheque raises presumption of consideration but that can be rebutted by opposite party.
Hence person claiming to have advanced such a huge cash loan must have some corroborative evidence,such as so much amount in his bank account and it's withdrawal on or before the date of alleged loan,otherwise simply issuance of lawyer's notice can not become evidence of advancement of loan.
I shall not deny that people do such huge cash transactions despite prohibition but
then there in courts, law has to be seen and not practice of people against law.
Biswanath Roy
(Expert) 14 March 2014
In absence of direct evidence relating to cash loan transaction the Judge has to rely upon circumstantial evidence. Common practice in a society or market shall have to be considered as a part of circumstantial evidence to infer the possibility of transacting loan between the parties ,although it might have been followed by an illegal way and/or manner not conforming with the law. In adjudicating a dispute or controversy a Judge not only depends upon law but also considers the entirety of the situation and facts and circumstances to arrive at a fair judgement.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 14 March 2014
Any body can remain happy by making this hypothesis or that, what I have told is that what happens when you go in court of law.
And Mr Roy people who deal in cash not in lacks but even in multi crores do not go to court of law.
And I have to remain anonymous because I go all over country and I have to protect interest of my clients .
I have so far not seen any perfect complaint for cheque bounce.
And any body not interested to hear any contrary advice pl remain happy with your beliefs.
prabhakar singh
(Expert) 14 March 2014
If the accused has a convincing explanation of the fact why did he issue the cheque, chances are very remote for facts stated here in this query to make it a case of conviction or even to get a civil decree.
prabhakar singh
(Expert) 14 March 2014
As was held by APEX court in P.venugopal Vs Madan P.Sarathi :" that under Sections 139, 118 (a) and 138 of the N.I. Act existence of debt or other liabilities has to be proved in the first instance by the complainant but thereafter the burden of proving to the contrary shifts to the accused. Thus, the plea that the instrument/cheque had been obtained from its lawful owner or from any person in lawful custody thereof by means of an offence or fraud or had been obtained from the maker or acceptor thereof by means of an offence or fraud or for unlawful consideration, the burden of disproving that the holder is a holder in due course lies upon him. Hence, this Court observed therein, that indisputably, the initial burden was on the complainant but the presumption raised in favour of the holder of the cheque must be kept confined to the matters covered thereby. Thereafter, the presumption raised does not extend to the extent that the cheque was not issued for the discharge of any debt or liability which is not required to be proved by the complainant as this is essentially a question of fact and it is the defence which has to prove that the cheque was not issued towards discharge of a lawful debt.
In a recent pronouncement by Apex Court the view above was reconfirmed in Vijay vs.laxman : http://indiankanoon.org/doc/53206885/
Biswanath Roy
(Expert) 14 March 2014
The case reference as referred to by Learned Mr.Prabhakar SinghJi is a right one.It is a common phenomenon in combating a case that the prosecution have to discharge his burden in proving the guilty of the accused by submitting relevant direct evidences and circumstantial evidences. In opposition the accused have to discharge his onus to rebut the alleged claim of the prosecution. Thereafter both the parties will be legally liable to discharge their shifting onus one after another if needed.
prabhakar singh
(Expert) 14 March 2014
I am thankful for opinion expressed by LD.Mr. BISHANATH ROY.
THESES THINGS ARE TOO BROAD TO BE DISCUSSED IN narrow facts we get stated in queries.
THINGS ARE CORRELATIVE and are SUBJECTIVE and SPECIFIC and depends on how prudently the two sides develop it at bar and how their lordships APPRECIATE it at BENCH.
