Abhinav Pandey 25 August 2018

Blank cheque deposited by third party.

'B' took loan Rs.2,00,000 from 'A' by giving blank cheque with sign on cheque to 'A'. Now 'A' by filling name of 'C', date & amount given that check to 'C' for the payment of business transaction. 'C' got the payment. After few months 'B' threatening to 'C' to file police complaint. Whether 'C' liable for any offence? Whether 'C' be compelled to return money to 'B'. Dear experts please enlight the matter.

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9 Replies

K Chakraborty 25 August 2018

yes. C may be prosecuted.... how C is related with A?? A may claim that C has taken an amount from him/her and not refunding it.... is not it?

Abhinav Pandey 25 August 2018

A & C have business relationship from last few years. Not satisfied with your ans.

K Chakraborty 25 August 2018

Well.... But there are no relation between B and C is not it??? Now C got some cash through a cheque from B without any reason.... Now B has every right... to file civil suit to recover of money along with 420/406 IPC....

Abhinav Pandey 25 August 2018

The question arises here....whether 'A' has authority or right to fill the signed cheque of 'B' and hand over to another person to pay his own debt? 'C' don't know about the cheque handed over to him. The name of 'C' is on the cheque which was filled by 'A'then how 'C'be held liabe for any crime?

Abhinav Pandey 25 August 2018

R Trivedi (advocate.dma@gmail.com) 25 August 2018

1. I get that the blank cheque was the security cheque, so it has to be ascertained if there was anything contracted about the use of this cheque. 2. Disputable but if anything is left blank by drawer, then the payee or holder has the implicit right to fill up the blanks. 3. B cannot make a complaint that look cheque was meant for A but used by C, unless B could bring out some fraud or cheating. 4. C has nothing to worry about as long as A supports the story. C has a cheque signed by B, which is encashed and duly accounted for, it will be sufficient for him to say that A handed over this cheque (quite similar to holder in due course) to settle the dues.

Abhinav Pandey 25 August 2018

Is there any SC judgments which may support 'C'

R Trivedi (advocate.dma@gmail.com) 26 August 2018

This seem to be fishy. If A and C colluded to cheat B, then problem. If C accepted this cheque from A in normal circumstances against fulfillment of liability between A and C, then C has no problem.