Proceedings under section 138 of ni act
Vijay Khanna
(Querist) 27 April 2013
This query is : Resolved
I issued a post dated cheque to person that was to be presented for clearance upon fulfillment of certain works to be carried out by him for this payment.
He presented the cheque before completing the works and the cheque was returned by my bank. He was notified in writing (email) about his misconduct and unethical behavior and that the cheque was not due for presentation due to incomplete and pending works.
He presented the cheque again without completing the works and I had no option but instruct the bank to STOP Payment on this cheque.
He has initiated legal proceedings u/s 138 against me.
Coincidentally the pending works by him for which his payment was on hold has also been completed.
Please suggest my options.
Best regards
Nadeem Qureshi
(Expert) 27 April 2013
as per your query you are liable to pay the cheque amount, if you are ready to pay then settle the matter before court or outside the court as you think fit
feel free to call
Vijay Khanna
(Querist) 27 April 2013
I offered to make the payment but he is nott interested and wants twice the amount initially agreed. What to do....
prabhakar singh
(Expert) 27 April 2013
Let him proceed then.
To attract a commission of offence u/s 138 N.I. Act,he needs to serve you a legal notice with in one one month of the intimation of dishonor of cheque given to him by his collecting bank calling you to pay the amount of the cheque and that is the
best opportunity to be utilized by you as by legal notice he can not ask you anything more than amount of the cheque which you under law is expected to pay within 15 days to be counted from the date you received his notice.
Send payment with reference to notice by an a/c payee not negotiable banker's cheque or demand draft as the case may be..
Advocate M.Bhadra
(Expert) 27 April 2013
If you are ready to pay the cheque amount and the Complainant did not agree then you should appear before the magistrate and approach your intention to make payment.Court may be passed an order to direct the complainant to receive the amount and case may be dismissed.
COMPOUNDING OF OFFENCE: Damodar S. Prabhu Versus Sayed Babalal H. SC 2010 (Crl Appeal No. 963 OF 2010: Compounding of the offense is possible u/s 147 of the NI Act. In January 2010 the Supreme Court held that the offence of issuing cheque, which is dishonoured for want of funds can be compromised between the parties. The Supreme Court stated that under Section 147 of the Negotiable Instruments Act, the parties can compromise as the offence is listed as ‘compoundable’.
prabhakar singh
(Expert) 27 April 2013
In case he has already filed complaint and you have not acted on his notice appear in case and offer to pay at the very first day by an application detailing all circumstances of the case in which cheque was issued and stop payment was made.For pending cases compromise outside court is never advisable according to me.
Vijay Khanna
(Querist) 27 April 2013
Dear Sirs,
We received the legal notice and the designated works was not completed till such time and the notice too demanded payment within 15 days. We replied to the notice stating our position and soon thereafter the designated pending works were completed.
Just to give you more insight, the cheque was issued in Feb. 2011 and was dated 08.07.11 (expected date for completion of works by the complainant). It was first returned by my bank on July 11, 2011 as the works were still pending. He was intimated not to present the same again till the completion of works. But he again presented the cheque without completing the works on 11, Nov, 2011 and the cheque was again returned as we had issued Stop Payment instructions to our bank.
We received their legal notice on 23.11.13 demanding twice the amount within 15 days. An unfair demand. Meanwhile the assigned works were completed by them on Nov. 21, 2011.
They dont want the agreed amount which we are willing to pay.
Any suggestions will be very helpful
Thanks for your valuable time and expert comments
Anirudh
(Expert) 27 April 2013
Have you got any agreement for the work to be done?
Does the Agreement mention the amount to be paid?
Have you paid any amount before - whether by cheque or cash?
When the cheque was presented on 11.7.2011 and the same was dishonoured, how can he send you any notice on 23.11.2013? Please confirm the dates of dishonour of cheque and the date of the legal notice.
Vijay Khanna
(Querist) 28 April 2013
Here are the answers to your queries:
Have you got any agreement for the work to be done? - YES. On our company letter head duly accepted by him.
Does the Agreement mention the amount to be paid? YES.
Have you paid any amount before - whether by cheque or cash? NO
When the cheque was presented on 11.7.2011 and the same was dishonoured, how can he send you any notice on 23.11.2013? Please confirm the dates of dishonour of cheque and the date of the legal notice. - He repeatedly presented the cheque. The last time it was returned by our bank on Nov. 11, 2011 and he sent the notice within 15 days of the last return of cheque on account of Stop Payment instructions by us.
The notice was received by us on 23.11.11 and the pending works completed as per our agreement on 21.11.11 and not 23.11.13 as wrongly mentioned by me earlier.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 28 April 2013
Well in the circumstances the case can be filed, process will be issued but final outcome will be long long time away.
So appear in the court and on every date be ready ORALLY to make payment as per cheque.
Please do not give any thing in writing otherwise it will be at your own peril.
The opponent has to pay court expanses, legal fees and also harassment of attending court so after few dates he will surely be mellowed down.
ajay sethi
(Expert) 28 April 2013
as on date of presentment of cheque work was incomplete . your agreement specifically mentions payment to be made after completion of work . you have already offered to pay on completion but complainant has rejected your offer . so fight case on merits .
