N I Act 138
Chetan
(Querist) 22 September 2009
This query is : Resolved
My client issued a cheuqe (voucher) of Cooperative Society to the complainant. The said Cooperative Society did not have 'Banking Business Licences" from the RBI.
therefore my question is that whether the said Coperative Society issued a cheque if yes then what is the legality of it in the NI Act 138
Pls Reply -- Urgently with citations and other provisionsriven
PJANARDHANA REDDY
(Expert) 22 September 2009
WETHER THE VOUCHER IS CALLED AS CHEQUE THEN NI ACT COME INTO PERVIEW AND 138 ATTRACTS., IF U PROVE IT IS NOT CHEQUE, IT IS ONLY VOUCHER THEN IT WON'Triven
Raj Kumar Makkad
(Expert) 22 September 2009
Voucher issued by cooperative bank is nothing but a cheque. It hardly matters whether it has license from RBI under Banking Regulation Act or not. Question under 138 NI Act is that the cheque/voucher was issued in liue of discharge of lawful debt/liability and the same has bounced and despite of notice of the stipulated period, the payment has not been made by accused.
Blank pronote filed by holder – valid – inchoate instruments – Section 20 enables holder of instrument to fill up the blanks and negotiable instruments which are duly signed by drawer and deliver to holder – promissory note which did not contain writing of drawer but executed by drawee held to be valid. 2002 (2) CTC 140.
“Holder†definition – Pay order issued by Co-operative Bank in favour complainant bank on account of their customer – complainant bank got assignment of such instrument – Holder means any person entitled in his own name to possession of cheque and to receive or recover amount from parties there to – complaint bank was also holder in due course as they become possessor of pay order before it became payable. 2001 (4) CTC 183 SC.
Drawer/Drawee – Same person – 138 lies – Bill of exchange must direct certain person to pay particular sum of money – three persons are not absolutely necessary to constitute bill of exchange – Phrase directing certain person to pay need not necessarily refer to third person – Drawer and drawee in bill of exchange could be same person. 2001 (4) CTC 183.
Pay order lies U/S 138 – Co-operative bank true pay order agreeing to pay complainant bank on account of particular customer – complainant bank got pay order assign to its name from customer – complainant bank presented such pay order and it was returned dishonoured for want of funds – pay order is either bill of exchange or promissory note – holder of such instrument is entitled to treat it as either bill of exchange or promissory note in terms of Sec. 17 of NIA – Complainant bank having elected to treat pay order as cheque, such pay order becomes cheque. 2001 (4) CTC 183 SC.
riven
Adinath@Avinash Patil
(Expert) 22 September 2009
My opinion is diferant there is qustion that whether pay order is bill of exchange or cheque.The defination of cheque is -A chque is bill of exchange drawn on specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of truncated cheque and acheque in the electronic from.
Here first part of defination clearly shows that a bill of exchange drawn on specified banker it means only banker wich are registered under banking regulation Act & which are having valid licence of Reserve bank of india Act can issue cheque.
You clien issued pay order of co -of society,here question arise whether said society have valid licence? If said society have valid licence as stated above,the pay order is withih the defination of cheque.
But in my opinion pay order is not tranferable hence it is not negotiable instrument.
Hence said pay order not attracts section 138 of N.I. Act.riven
PARTHA P BORBORA
(Expert) 23 September 2009
A PAY ORDER IS NOT A BILL OF EXCHANGE THUS IT CAN NOT BE TERMED AS A CHEQUE.riven
Raj Kumar Makkad
(Expert) 23 September 2009
Mr. Parthaprotim I have cited Apex Court verdict 2001 (4) CTC 183 SC wherein pay order has been declared as a cheque. If yu have latest ruling which overruled this citation, please mention.riven
