Sec 138 of n.i.act
anckoora
(Querist) 10 September 2011
This query is : Resolved
Dear Sir,
My friend was working as Admin Officer in a newly opened school, having its H.O. at Mumbai from Dec10 to 12.8.11. In march, he hired a security agency for security purpose. This agency provided services till June-11. Agency used to raise monthly bills on School in School's name and cheque from Mumbai office was released in next month. Chq for Mar & Apr was recd in time by the agency. But chq for bill of May was delayed from mumbai office. But in between chq for June was recd on 12.7.11. Since chq for May was delayed, my friend gave a chq from his personal a/c in favour of Security Service agency-as a surety that when chq from mumbai will come, they will return the chq to my friend. But this agency palyed a game. They recd May-11 chq from School on 10.8.11. They deposited this school's chq which got passed. Thus their all bills were paid by school. Now this agency also deposited my friend's chq on 16.8.11-with bad intention. This chq was bounced on 17.8.11. This agency sent an advocate's notice dt 2.9.11 u/s 138 of N.I.Act adressed to my friend with school name and sent it by regd a.d. at school's address-which was recd. by school on 8.9.11. This Notice says : "YOU ARE RUNNING A SCHOOL AT...PLACE. YOU APPROACHED MY CLIENT FOR AVAILING MY CLIENT'S SECURITY SERVICES AND ACCORDINGLY MY CLIENT PROVIDED TO YOU THE SAME-FOR WHICH AN AMOUNT OF 8700/- IS DUE FROM YOU. FOR THIS YOU GAVE YOUR PERSONAL CHQ TO MY CLIENT WHICH WAS DEPOSITED ON 16.8.11 AND WAS BOUNCED ON 17.8.11. THUS, YOU HAVE COMMITTED A CRIME U/S 138 OF N.I.ACT. NOW PAY WITHIN 15 DAYS' OF RECEIPT OF THIS NOTICE OR FACE LEGAL ACTION"
Now, I want to fight this case, though amount is marginal-8700/- to teach them a lesson.
Now, guide me, how should I go ? What stand should I take ? Am I liable to pay to the agency ? (when they have recd all payments from school). Do I owe anything to Agency ? I had given chq in July. But they deposited in 11.8.11. WHY ? What documents I need to provide to court that agency has recd.from school , all payments against their bills on school ?
please guide me elaborately. After winning, can I file a suit of defamation against agency ? if yes, for what amount-5 lacs , ten lacs ? PLEASE NOTE THAT, SCHOOL HAS TOLD MY FRIEND THAT THIS IS YOUR PROBLEM AND YOU HAVE TO SOLVE IT - AS I HAVE RESIGNED ON 12.8.11. THOUGH SCHOOL HAS RECD THIS NOTICE, THEY HAVE GIVEN ME COPY OF THE SAME.
AWAITING YOUR GOOD GUIDANCE.
ANCKOORA
Ganesh Chavan
(Expert) 10 September 2011
The Hon’ble High Court of Bombay at its bench at Aurangabad in Criminal Application No.898/2009 in the case of Ramkrishna Urban Co-operative Credit Society Ltd. v/s Shri. Rajendra Bhagchand Warma has held that the proceedings under Section 138 of Negotiable Instrument Act cannot be initiated when a cheque is given as security and if you have cleared your liability as per the record maintained by you - prove the Court you Cleared all the liability to pay the cheque amount.
anckoora
(Querist) 10 September 2011
But sir, I don't have to clear his bills. School has to do it, as bills were in the name of school. Since school has paid all his bills by school's chq, how can I be his debtor ? I, in my individual capacity, I don't have to pay his bills - as bills are in name of school. Thus in short, what i have to do to win the case ?
prabhakar singh
(Expert) 10 September 2011
You need to prove that you have not received any services from complainant,rather it was school to whom they have been rendering services and they have paid all the bills,the cheque in question was not issued for payment of any dues or to discharge any liability nor was there any such on you,rather it was issued by you in guarantee as one of the payment becoming due upon the school got late and since agency services for school on behalf of school was negotiated and finalized
by you by virtue of holding the administrative officer of the scool,and since nothing is due upon the school and the school has already paid the dues for which guarantee cheque was issued by you,your cheque so issued stood retired,the agency has committed breach of trust of its promise made to return the cheque by wrongfully and illegally presenting the same for collection.
In my opinion you should also lodge compliant by Fir to police for breach of trust committed by them against you by not returning the cheque after having received the money from the school.Pursuing it would be very beneficial in all circumstances.
you should collect all records of payment in photo copy from the school as well as from banks involved in collection of school cheques.
Ganesh Chavan
(Expert) 10 September 2011
I agree with Mr.prabhakar singh Sir.
R.Ramachandran
(Expert) 10 September 2011
I completely agree with the views of Mr. Prabhakar.
First you have to collect all the documents mentioned by Mr. Prabhakar from your school authorities - i.e. order placing for security services - the monthly invoices received from the security services, the details of cheques issued against each of the invoices etc.
After collecting all these information and documents, you have to reply to the legal notice received by you. You should clearly and step by step state the facts. You should also categorically state that you issued the cheque from your personal account only as a security, pending issuance of the cheque by the school which was getting delayed for one reason or the other. You should categorically assert that there was no service received by you personally nor did the agency render any service to you in your personal capacity. Thus, there is no liability or debt which you owe to the security agency. Therefore the depositing of the cheque given from your personal account towards security, is an act of criminal breach of trust and you reserve your right to take appropriate legal action against the security agency.
This reply you should give by Registered ACK Due post within such time so as to reach the advocate concerned within 15 days from the date of receipt of notice by you.
If in spite of such reply, any complaint u/s. 138 N.I. is launched against you, you have to contest the same.
Ganesh Chavan
(Expert) 15 September 2011
It is well settled that criminal liability cannot be fastened to the heirs and the legal representatives of a person, who is said to have been guilty of the offence in question. Moreover, it is specifically provided in Section 118 of the Negotiable Instrument Act that proceedings under the complaint alleging offence under Section 138 of the said Act cannot be filed against legal representatives of the person who had is sued the cheque. The complaint filed by the financer against you is nothing but abuse of the process of court. You may approach the High Court for quashing of the said complaint by filling a petition under Section 482 of the Code of Criminal Procedure by referring to a recent judgment of the Bombay High Court in the case of Savita H. Sorle and others Vs. Rajesh Damidar Sarode and another reported as 2006(3) R.C.R. (Crl) 216
Advocate Bhartesh goyal
(Expert) 10 September 2011
