Satish (farmer) 06 May 2022

Cheque bounce without promissory note support

Hello Legal Experts,

My friend X borrowed Rs10 lacs from a person Y in December 2018, Mr. Y has taken two promissory notes for 5lacs each and a signed blank cheque as security. The money was given by hand.

A settlement happened In December 2019 in the presence of a few witnesses. Mr Y has received the agreed amount from Mr X and he signed on a paper with witnesses that he will hand over the cheque and promissory notes to Mr X, but he has not committed to his promises.

Mr Y bounced the cheque twice or thrice and filed a criminal case in the court against Mr X for Rs 51lacs without submitting the promissory notes. Mr.X is not sure how Mr.Y has come up with 51lacs, Mr.X knows clearly knows that it is a fraud, but not sure how to counter Mr.Y. Mr X approached 2 local lawyers but not happy with their solutions.

Can you experts help my friend Mr.X? Can my friend find a way to take any criminal action against Mr.Y?

Please advise.

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7 Replies

kavksatyanarayana (subregistrar/supdt.(retired)) 06 May 2022

File a case against him by consulting other lawyers. There are several lawyers. Find by way of inquiring which lawyer is good for your friend's case. Your friend has to prove his innocence before the court. Where are you from?

SHIRISH PAWAR, 7738990900 (Advocate) 07 May 2022

Yes,

Mr. X has to fightout the case as per facts stated in query. You can consult with other lawyers as you are not happy with 2 lawyer's advice.

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 07 May 2022

As per your version the crimininal case is filed. Police will enquire and submit the report to the court. cheque bounce is an offence under Section 138 of the Negotiable Instruments Act, 1881 (“Act”) punishable with a fine which can extend to twice the amount of the cheque or imprisonment for a term not more than two years or both.

Advocate Bhartesh goyal (advocate) 07 May 2022

X has good defence to contest the cheque bounce case on many grounds ( 1 ) 51 lacks cash loan, unaccounted money ( 2 ) income tax returns ( 3 ) entries in cheque has not been filled by you. ( 4 ) Y has no money lending licence etc.

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Satish (farmer) 07 May 2022

Thanks, Mr Goyal, you made very useful points.

I would like to add a few points here.

1. As per new regulations any amount which is more than 2lacs or so should be done by a bank transaction, am I right?

2. Since no supporting documents like a Promissory note are submitted, is there any chance that my friend X can complain to the police that he lost the cheque and it has been misused by Y?.

I understand that the IT department already sent a notice to Y regarding this.