Can NI act 138 applicable when service is not rendered?

Querist : Anonymous (Querist) 10 September 2010 This query is : Resolved
Hi,

My vendor promised me a service to be rendered within few months, so I gave him a post dated cheque. Despite several reminders and even after the promised time, he never bothered to render the service. So I issued a 'Stop Payment' for that cheque. My vendor deposited the cheque twice, both times my bank declined to credit it saying 'payment stopped'. Now my vendor has filed a case against me under NI Act 138.

Is this act applicable even when he has not rendered the service? Is there any reference to existing cases of this nature?

Thanks in advance for everyone.

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Adv Archana Deshmukh (Expert) 10 September 2010
No. Only if the cheque is given against a legally enforceable liability then s. 138 is attracted. If services are not rendered then there is no question of any liability to pay.

Querist : Anonymous (Querist) 10 September 2010
Thanks Archana.

Is there any existing cases for reference?

B.B.R.Goud. (Expert) 10 September 2010
No. it is not applicable. he has no legal right to present cheque therewith you have no legal liability. so sec 138 N I Act is not attracted.

Adv Archana Deshmukh (Expert) 10 September 2010
The law itself is very clear about this anonymous.

Parthasarathi Loganathan (Expert) 10 September 2010
It again depends on the terms and conditions stated in the Vendor-Vendee agreement

Querist : Anonymous (Querist) 10 September 2010
Parthasarathi,

The service is about obtaining a certificate. They have given the promise of obtaining the certificate in written form. I have that. They have not yet obtained it, so there is no way to prove that they have fulfilled the service. I believe I'm on the safer side.

Thanks everyone for the help!

Ajay Bansal (Expert) 10 September 2010
agreed as above.

s.subramanian (Expert) 10 September 2010
I fully endorse the view of Adv.Archana.

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