rajat gupta (self) 13 November 2009

For cancelled transaction, is Cheq Stop Payment an offense ?

Wishing to buy a property, I gave cheques for token money to the seller. But as the property details proved to be different from the understanding conveyed by seller, and I informed the seller in writing that the deal stands cancelled within next 2 working days. Further, as advised by my dealer, I placed "stop payment" on the cheques.

But the seller still proceeded to bank in the cheques, and of course the cheques were dishonoured because of "stop payment" even though my bank account had sufficient funds.

Question is, have I committed offense by placing "stop payment" on cheques in this instance ? If yes, how do I protect myself in case the seller initiates some legal action ?

Thanks in anticipation, for your expert advise.

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5 Replies

Kiran Kumar (Lawyer) 13 November 2009

as per latest judgments u r not liable under S.138 Negotiable Insturments Act.

otherwise, u ve strong facts in your favour....in fact you have not committed any offence.

however you may proceed against him for having provided you wrong descripttion of the property and making you to deliever cheques to him.

Dont worry....u r safe.

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Indrajeet Dasgupta (Advocate) 13 November 2009

You have not committed any offence. If a case is filed you have to establish that you did not have any due and you had sufficient funds in your account.

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saumit joshi (advocate) 13 November 2009

As per kiranji and indrajeetji mentioned that you are not liable for offence under NI Act Sec 138.but you have to face the court proceeding and you prove your better defence at the time of evidence.

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rajat gupta (self) 13 November 2009

Dear Sir(s), thanks a lot for your responses and guidance. Most appreciated.

In the event that I do have to face the court, which I believe is distinctly possible in next 1-2 months, may I request you to provide the contact a good lawyer in Gurgaon for this purpose .. one who can fight the case on my behalf without me having to go everytime to the court ?

Many thanks again.