Rohit (Prop) 01 May 2009
A co op cr society says it has issued cheque book.
RBI says, it has not issued banking license to the co op society
What is the legal entity of such document
Can this document be called a cheque
Can it be presented through other bank
if unpaid, can sec 138 of NI Act apply
B.N.Rajamohamed (advocate / commissioner of oaths) 04 May 2009
When the Reserve Bank of India has not isssued a licence for the banking buisiness the establishment is not a bank or a banking company it is a non banking financial institution. The Banking Regulation Act will not be applicable. The document as you mentioned will not take the colour as a cheque book and it is not negotiable. Consequently, section 138 of the N.I.Act,1881 will not be applicable. But a money suit can be filed using the loan documents in case of non payment of debt by the debtors.
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