Sec 138 of ni
Jitesh Mehta
(Querist) 03 April 2014
This query is : Resolved
I had entered into an agreement with a chit company for a chit of Rs 5,00,000/= payable at Rs. 25,000/= per month. I paid my instalments for the first eleven Months. On the 12th month, I bid for the chit and received the chit amount against all the securities and a cheque of Rs. 2,00,000/= being the future instalments for Eight Months at Rs.25,000/= per month. After that I paid two more instalments and I had a dispute with one of the partners of the firm. therefore, I stopped the instalments. But after one month, the company presented the Cheque of Rs.2,00,000/= without any information or notice to me. At that time, the amount payable was Rs. 1,25,000/= which the company has admited in the complaint and filed a case u/s 138 of NI Act. Can I fight the case, with an agrument that the amount due was only Rs. 1,25,000 and the amount of the cheque was Rs. 2,00,000/= and therefore I did not honour the cheque. Is this case maintainable under sec 138 ?
R.V.RAO
(Expert) 04 April 2014
On presentation of the cheque,When the banker endorses that the cheque is bounced due to insufficient funds,then certainly a case under sec 138 NI act lies against you.
your arguments about the liability being less but higher amount cheque was presented by the chit fund co. etc..is a matter which court will consider certainly.
Also you need to argue that Rs 2. lacs cheque is a security cheque and that it represents future 8 instalments, and the chit fund co. is not supposed to collect all the 8 instalments in one go.
but your action of not honoring the cheque issued by you only, will not go well with court, as the case is filed under sec 138 of NI Act.
i foresee that at the end of a few hearings ,both sides advocates may try for an out of court settlement, as both parties have a point of argument from their side.
Dr J C Vashista
(Expert) 04 April 2014
Settle the matter amicably, otherwise contest, however, presumption is against you.
Rajendra K Goyal
(Expert) 04 April 2014
Try to have amicable settlement. he cheque has been bounced, was issued by you, funds were insufficient are a bit heavy on your Arguments.
Agree with the experts.
Guest
(Expert) 04 April 2014
When you have handed over a dated cheque, you cannot expect the holder to intimate you before presenting the cheque in the bank.
Further, whatsoever amount is due to be paid by you, you cannot expect the cheque to be presented in part by the holder or to be paid in part by the banker. On the face of the cheque, the banker had your clear order to pay the holder a sum of Rs. 2 lakhs. If dunds were insufficient in your account, neither the banker had any reason to honour the cheque, nor the holder had any reason not to sue you on account of dishonour of cheque.
Although the holder does not have any right to get more than the due amount from you, but still, your argument has absolutely no weight to fight the case on that basis.
So, better pay the amount due to the holder, get a no due certificate in the acknowledgment of amount and settle the case out of court to avoid buying unnecessary hardship and waste of money for yourself through litigation.
Jitesh Mehta
(Querist) 04 April 2014
I had issued a stop payment order as the chit fund company had some financial problems and was trying to encash security cheques issued by the members. apart from that, i had also subscribed for one more chitin the name of my wife in which I had paid Rs. 3,00,000 and not taken the chit. The amount was suposed to be adjusted in my chit and pay the balance. Now, If I had cleared the cheque of Rs. 2,00,000/= I would be losing that amount and also the amount paid in my wife's name. Now I have filed a case under Chit fund act to recover my amount. but the Foreman is not ready to adjust the amounts and pay me the balance. I tried one full year to settle the matte amicably, but he did not compromise, and therefore, I had to file a case under the chit fund act to recover the amount due in my wife's account.
R.V.RAO
(Expert) 05 April 2014
as you are suffering since 1 year and chit fund company is acting in unlawful manner to wrongly appropriate your money, make an online complaint to dept.of non banking cos.under RBI supervision, to following address.
Even if they cannot give any direct help,at least they will direct you to the correct source of complaint. mark a copy of this complaint to the chit fund co.
CHIEF MANAGER,
Department of Non-Banking Supervision Central Office
Centre I, World Trade Centre,
Cuffe Parade
Mumbai-400 005.
Phone: 022-22153350
Email id: cgmicdnbsco@rbi.org.in
THE DETAILED DUTIES OF DNBS CAN BE SEEN AT:
( DNBS: Dept. of Non banking Services)
http://www.rbi.org.in/scriptts/AboutUsDisplay.aspx?pg=Depts.htm#DNBS
T. Kalaiselvan, Advocate
(Expert) 05 April 2014
You are right in giving instructions to your banker to stop payment on the cheque in question. You have valid reasons to stop payment as the chit company is trying to illegally absorb the money for which it is not due. The chit company, if it is genuine should have given you a notice to replace another cheque for the exact due amount which is lesser than the amount mentioned in the cheque in their possession given by you for the purpose of security of future chit payments, further, as per the conditions of the company, you were supposed to clear the amount every month only and not in one go, therefore the chit company has faulted in its action of depositing the cheque with their bankers for realization, for more than one reason, hence the case u/s 138 NI act is not maintainable as there is no legally liable debt or any consideration pending to be be paid by you to the company to the extent of the cheque amount. You can challenge the same appropriately.
R.V.RAO
(Expert) 05 April 2014
agree with Thiru kalaiselvan ji's argument about non maintainability of the case .
Jitesh Mehta
(Querist) 05 April 2014
My hearty thanks to Mr. R.V.Rao, Mr. T.Kalaiselvan for their expert advice. Mr. Rao, I have already filed a complaint to the Reserve Bank of India for non payment of the chit amount and the RBI has instructed me to file a complaint with the Registrar of Chits in Karnataka but after several follow up and meetings with the concerned officer, he told me after one year that the chit organiser is not willing to pay the amount and I will have to file a case unde sec 64 of the chit fund act to recover my amount.and therefore, I have already filed a case at the office of the Asst. Registrar of Chits at Bangalore. But the concerned arbitrator has not taken up the case for almost two years. I have filed the evidence but after that it has not moved forward.If both the cases were at the Arbitration, the matter would have been solved by now.
