Ankit Saha (CEO) 06 September 2014

Stop payment in 138 case

Respected Lawyers,

If stop payment instructions are issued after 12 months after issue of cheque and cheque bounces, will court consider the delay and ignore accused's reasoning for stop payment? In this case accused took possession of property and living in the property for 12 months already. One of the PDCs bounced.The reasons cited by accused: house had construction defects and some illegality in statutory payments and permissions. Accused filed a cheating case separately.

Will the outcome of the 138 case affect cheating case or vice versa?

regards

Ankit

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2 Replies

Hardeep (Business) 07 September 2014

AFAIK :

1) a cheque has a validity of 3 months from the date on it. If it was presented within such time and bounced a prima facie case u/s 138 NI Act lies. The drawer can present his evidence in Court once the case begins and it is for the court to take a decision accordingly.

2) Judgement of a case can always be cited in another if relevance can be established. So if cheating is established that is relevant evidence for the cheque bounce case, more so if the Drawer had earlier informed the payee of structural defects, illegalities etc. and said payment being stopped due such reasons.