U/s 138 of N I Act,1881
Swapna R Nair
(Querist) 30 May 2010
This query is : Resolved
What is the procedure of the U/s 138?
How to file the Case of 138?
A V Vishal
(Expert) 30 May 2010
On the dishonour of a cheque, one can file a suit for recovery of the cheque amount along with the cost & interest under order XXXVII of Code of Civil Procedure 1908 ( which is a summary procedure and) can also file a Criminal Complaint u/s 138 of Negotiable Instrument Act for punishment to the signatory of the cheque for haring committed an offence. However, before filing the said complaint a statutory notice is liable to be given to the other party.
In order to proceed under Section 138, the following events should have occurred:
The cheque in question should have been issued in discharge of whole or part of a debt or liability otherwise the maker of the cheque is not liable for prosecution. For example if the cheque is given as a gift or present and if the bank dishonours it the maker of the cheque is not liable for prosecution
Cheque should have been presented to the bank within a period of six months of the date of on which it is drawn or within the period of its validity, which ever is earlier;
A dishonour of cheque due to certain defined reason
The payee or holder in due course of such cheque should have made a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within thirty days of the receipt of the information by him from the bank regarding the return of the cheque unpaid; and
The drawer of such cheque should have failed to make the payment of the said amount of money to the payee or the holder in due course of the cheque within fifteen days of receipt of the said notice
The complaint can be made only by the payee or holder in due course within one month of the drawer failing to make payment after 15 days of receiving notice.
The requirement of giving of notice is mandatory. If no notice making a demand for payment is served upon the drawer within 30 days from the date of dishonour of cheque, a complaint is not maintainable unless the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.
Notice means a notice in writing.
A postal acknowledgement due containing the signature of the accused is proper proof of service of the notice on the addressee shown in the postal acknowledgement.
When a notice is returned by the sender as unclaimed such date would be the commencing date in reckoning the period of 15 days. Such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address.
The notice need not necessarily be by registered post only. It can be sent by a telegram, fax or by a letter as well. However it is preferable to send the notice by registered post, as that is clear evidence of service.
No court that is inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class can try any offence u/s138. All the following Courts will have jurisdiction:
The Court, situated at the place where the drawer of the cheque fails to make the payment of money;
The Court situated at the place where the bank through whom the cheque was issued, is located;
The Court situated at the place where the cheque was issued or delivered.
If the magistrate is of the opinion that there are sufficient grounds for proceeding he shall call the complainant for pre summoning evidence and the necessary documents are exhibited.
Thereafter summons are issued for the attendance of the accused and the witnesses.
If accused fail to appear, warrants are issued by which Police authority are instructed to make accused present in the Court.
The evidence of the witnesses is recorded.
The particulars of the offence are stated to the accused, and he shall be asked whether he pleads guilty or has any defence to make.
If he accused pleads guilty, the magistrate shall record the plea and convict him.
If the accused does not plead guilty the Magistrate shall proceed to hear the complainant and the accused and take all the evidence as may be produced by both.
On the hearing and evidence the Magistrate shall pass the order of conviction or acquittal.
Guest
(Expert) 30 May 2010
NANDKUMAR B.SAWANT.M.COM.LL.B.(MUMBAI),ADVOCATE
MOBILE.9271971251, 9960223100
REGARDING SEC.138 OF N.I.ACT PROCEDURE KINDLY NOTE THAT
1IN CASE YOU HAVE RECEIVED ANY CHEQUE FOR SOME LEGALY ENFORCEABLE DEBT AND YOU DEPOSIT IN YOUR BANK AND IT IS DISHONOURED.
2.YOU HAVE TO ISSUCE NOTICE UNDER SEC.138 OF N.I.ACT AND DEMAND THE PAYMENT OF SAID CHEQUE AMOUNT FROM THE DRAWER WITHIN 15 DAYS OF SERVICE OF NOTICE ,MENTIONING THE DETAILS OF TRANSACTION AND ,CHEQUE NO.,DATE AND AMOUNT AND NAME OF THE BANK AND DATE OF DEPOSIT AND DATE OF DISHONOUR.
3THIS LEGAL NOTICE YOU SHOULD SEND BY REGD POST AD /SPEED POST A.D, AND ACKNOWLEDGEMENT RECEIVED FROM THE DRAWER AND ORIGINAL CHEQUE AND BANK RETURN MEMO WITH REASONS FOR DISHONOUR ,YOU HAVE TO FILE CR.COMPLAINT IN THE COURT WITHIN ONE MONTH OF DATE OF SERVICE OF NOTICE BY THE DRAWER.
4.THE SUMMONS WILL BE ISSUED TO ACCUSED AFTER HEARING THE ADVOCATE FOR COMPLAINENT.
5.ACCUSED HAS TO FURNISH SURETY AND GET BAIL FROM THE COURT .
6 COMPLAINENT SHOULD SUBMIT AFFIDAVIT FOR EVIDENCE AND THE OTHER SIDE ADVOCATE FOR ACCUSED WILL CROSS EXAMINE THE COMPLAINENT.SIMILAR PROCEDURE WILL BE FOLLOWED FOR OTHER WITNESSES OF THE COMPLAINENT .
7STATEMENT OF ACCUSED WILL BE RECORDED
8WITNESSES OF ACCUSED WILL BE EXAMINED.
9ARGUMENTS OF ADVOCATE FOR COMPLAINENT AND
ADV.FOR ACCUSED WILL BE HEARD AND JUDGEMENT WILL BE PASSED.
THANKS.
PJANARDHANA REDDY
(Expert) 30 May 2010
CHQ BOUNCE CASE::
1. DISHONOR FOR INSUFFICIENT FUNDS ONLY.
2.LEGALLY ENFORCEABLE LIABILITY MUST BE PROVED BY COMPLAINANT.
3.TIME OF NOTICE AND SUIT FILING IS AS PER THE SEC 138 ( STRICT TIME LIMIT HAS TO FALLOW)
4. IF IT IS A COMPANY OR NOT INDIVIDUAL UND/SEC 142.
5. BANK SLIP IS THE PRIME FACE EVIDENCE
6. COMPLAINT MUST ENTER IN TO SWORN IN OATH BEFORE MAGISTRATE.
7. ALWAYS BETTER TO FILE A CIVIL SUIT/ MONEY SUIT IN CIVIL COURTS.
8. CRIMINAL CASES U/S 138 WILL GIVE ONLY PUNISHMENT TO ACCUSED( IN MAJORITY JUDGMENT)
9. ALWAYS ENGAGE GOOD ADVOCATE IS SUGGESTED TO GET RELIEF.
krantiveer
(Expert) 30 May 2010
I fully agree with expert Mr A V Vishal.
Guest
(Expert) 30 May 2010
nothing remains after the detailed reply by experts.
adv. rajeev ( rajoo )
(Expert) 30 May 2010
Eg>
on Ist you receivedreceipt of unpaid cheque within one month you will have to issue a notice giving him 15 days time from the date of receipt of notice to make the cheque amount.
If he failed to make the payment you will have to file a case u/s 138 within one month
eg.,
29th april you received unpaid cheque
one months to give a notice ends on 28th of may ( you will have to issue the notice within 28th of mayjune)
Suppose you issued a notice 29th of april and accused received a notice on 2nd of may, from 2nd of may 15 days ends of 17th may.
Cause of action to file a complaint arises from 17th may, within 16th may you will have to file a complaint.
Pankaj Kundra
(Expert) 01 June 2010
has already been explained in details by the learned seniors
Pankaj Kundra
(Expert) 01 June 2010
has already been explained in details by the learned seniors
