Negotiable instrument act
Adv B.B.Gambhir #9814820602
(Querist) 03 October 2012
This query is : Resolved
respected members, my question is whether the memo along with cheque with report "Signature differs and Funds insufficient" falls under the provisions of 138 of N.I. Act. if yes supply any law or citation urgent
ajay sethi
(Expert) 03 October 2012
yes falls within ambit of section 138 NI
ajay sethi
(Expert) 03 October 2012
yes falls within ambit of section 138 NI
ajay sethi
(Expert) 03 October 2012
M.M.T.C. Ltd. and Anr.
v. Medchl Chemicals & Pharma (P) Ltd., (2002) 1 SCC 234
(Para. 19):
“… The authority shows that even when the cheque is
dishonoured by reason of stop payment instruction, by
virtue of Section 139 the Court has to presume that the
cheque was received by the holder for the discharge in
whole or in part, of any debt or liability. Of course this is
a rebuttable presumption. The accused can thus show
that the `stop payment’ instructions were not issued
because of insufficiency or paucity of funds. If the
accused shows that in his account there was sufficient
funds to clear the amount of the cheque at the time of
presentation of the cheque for encashment at the drawer
bank and that the stop payment notice had been issued
because of other valid causes including that there was no
existing debt or liability at the time of presentation of
cheque for encashment, then offence under Section 138
would not be made out. The important thing is that the
burden of so proving would be on the accused. …”
(emphasis supplied)
ajay sethi
(Expert) 03 October 2012
Karnataka High Court
Dinesh Harakchand Sankla vs Kurlon Ltd. And Ors. on 27 September, 2005
Equivalent citations: IV (2006) BC 91, 2006 134 CompCas 295 Kar
Author: M Shantanagoudar
Bench: M Shantanagoudar
ORDER
Mohan Shantanagoudar, J.
If the drawer intentionally tampers the cheque or issues the cheque with difference in signature etc., the cheques will be definitely returned. Even after service of statutory notice, if the amounts involved in the cheque are not paid by the drawer of the cheque, then his intentions are prima facie clear, to the effect that he would be tampering with the cheques only with an oblique motive. If, in such case, the person in whose favour the cheques are issued is not allowed to prosecute the matter under Section 138 of the Negotiable Instruments Act, the very purpose of enacting Section 138 of the N. I. Act would be frustrated. The drawer of the cheque will have to take abundant precaution while issuing the cheques so that the cheques should be honoured and contractual obligations are fulfilled. In case, if the drawer issues cheques as in the case on hand, he will be doing so in circuitous manner in order to save his skin, only to take advantage of the absence of specific words under Section 138 of the Negotiable Instruments Act.
11)The question as to whether the accused had got criminal intention, while issuing the cheques in question, of getting the cheques dishonoured by acting in circuitous manner to overcome grounds which are mentioned in Section 138 of N. I. Act, or not, is a pure question of fact and that has to be decided based on the material to be collected during the course of the trial. In view of the same, this Court is of the considered opinion that even if the cheques are returned with an endorsement of "alternation in date and drawer's signature differs", the prosecution cannot be scuttled at this stage by quashing the complaints, inasmuch as, the mens rea behind issuing such cheques will have to be determined based on the material to be collected during the course of trial. In view of the same, I do not find any merit in these criminal petitions.
V R SHROFF
(Expert) 03 October 2012
It will attract punishment as per 138 n i act
malipeddi jaggarao
(Expert) 04 October 2012
One of the reasons is : funds insufficient - this is enough to attract the action under Section.138 of NI Act.
Guest
(Expert) 04 October 2012
I endorse the views of experts.
