Nach dishonour defense
Querist :
Anonymous
(Querist) 11 September 2024
This query is : Resolved
I have an NACH dishonour case filed against me for the dishonor case in Dec 2022.
The goods in question were purchased in Sept 2021.
Proceedings have been going on from past 1 year (2023-2024) wherein we have been through mediation but no solution was found.
In this regard, the complainant has given an offer of 75% of amount in question to settle the case. However, I believe we might have some credible argument which may be presented that might cause the case to be decided in my favour.
If possible, need some guidance from advocate who can guide if those argument are infact credible or not.
Argument:
1. NACH procedural guidelines
Complainant has informed that the electronic funds were initiated in accordance with the relevant procedural guidelines issued by the system provider.
In this regard, as per National Automated Clearing House (NACH) procedural guidelines V6:
a. As on page 45, corporates “Ensure that the customer is made aware of the purpose for which they are executing the mandate” - NOT DONE
b. As on page 45, corporates “If the mandate is taken in advance, the customer should be notified before deposition to the bank. If the customer is not aware then he may deny signing the mandate in response to confirmation calls of his / her bank” – Customer not notified by corporate.
c. As on page 45, Sponsor Bank “Banks should have internal controls in place to ensure that no duplicate mandates are processed in MMS” - The mandates for the invoices in question were processed in Sept 2021, then somehow mandates were again processed in Dec 2022?
2. As per agreement between parties for Dispute resolution
a. As per one clause, Distributor to handover signed cheques and authorize company to complete such cheques with amount as per the payment advice issued to distributor giving the details of the purchase price…. However, in the present case, NACH/ACH/ECS are in question wherein company has failed to provide the payment advice to the distributor. The last payment advice was in September 2021, whereas NACH was mandated on Dec 2022, a period of 14-15 months. As per agreement, maximum credit period was 10 days not 14-15 months. Therefore these mandates are illegal.
b. As per one clause, “any dispute or difference which arise by and between parties hereto relating to or arising out of this Agreement, unless decided by mutual agreement of the parties, be referred to Arbitrators (one each to be appointed by the parties to the dispute) or the third Arbitrator in accordance with the provisions of the Arbitration and Conciliation Act, 1996, for the time being in force or any amendment thereto. The Award passed by the Arbitrators shall be final arid binding on all the Parties to the dispute”. Here no arbitration was done, distributor was not given chance to make the claims.
T. Kalaiselvan, Advocate
(Expert) 11 September 2024
Without perusing the case related relevant papers no proper opinion can be rendered, hence yo may take a second opinion in person from any other lawyer either in the local or from this forum or outside this forum with all your relevant documents and proceed as suggested
