A valid debt is presumed when a case is filed under section 138. The law is pretty clear on that; otherwise, a cheque will have no sanctity. It is a rebuttable assumption. The onus is on the drawer to prove that the cheque was not given for consideration and was obtained under fraud or coercion, etc. Stop payment instructions to the bank do not absolve anyone from liability. The law is pretty clear on that too.
An undated cheque or a cheque with no amount filled in later could provide a way out; however, the burden of proof still lies with the drawer. A prima facie case is established, and the court will consider all this evidence only at the evidence stage.
From United States, New York
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58An undated cheque or a cheque with no amount filled in later could provide a way out; however, the burden of proof still lies with the drawer. A prima facie case is established, and the court will consider all this evidence only at the evidence stage.
From United States, New York
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The cheque was taken as security in 2010 and presented in 2012. Can we go to the handwriting expert to check the ink of the cheque or handwriting, etc.? Can we request the court to do this exercise? The cheque was undated when it was submitted to the employer, and the date was filled in later by the employer according to his convenience.
From India, Delhi
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From India, Delhi
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The purpose of an "undated cheque" is exactly that - to be able to put the date at a later period so that it is not "stale". The employer was within his full rights to put the relevant date. The only thing the court will now look at is whether there was any debt existing at the time of presentation to the bank. If the court decides there is no debt, bouncing of the cheque is not a criminal offence. The company can still proceed with a civil trial if it has any grounds for the same. If the court decides there was a debt and the cheque was presented to clear the same, it amounts to a criminal offence to bounce the cheque for want of funds.
From India, Mumbai
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From India, Mumbai
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But how can a company take a undated cheque at the time of appointment. No training was given to me. It was taken by holding my appointment letter.
From India, Delhi
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From India, Delhi
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That is a question that you should have asked when you gave undated cheques to the company.
The de-facto situation now is that they have a cheque on which the date appears to be current, and it has bounced due to non-availability of funds, which is a criminal offense. They have filed a case against you under Sec 138 of the Negotiable Instruments Act. It has been repeatedly discussed on this forum, and the consensus is that it's stupid to give a blank cheque or a security cheque to the company, but employees give it because they want the job and don't think ahead. You can always use these arguments in court. But as I said, it's for the court to decide whether or not there is a debt you owe to the company.
From India, Mumbai
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The de-facto situation now is that they have a cheque on which the date appears to be current, and it has bounced due to non-availability of funds, which is a criminal offense. They have filed a case against you under Sec 138 of the Negotiable Instruments Act. It has been repeatedly discussed on this forum, and the consensus is that it's stupid to give a blank cheque or a security cheque to the company, but employees give it because they want the job and don't think ahead. You can always use these arguments in court. But as I said, it's for the court to decide whether or not there is a debt you owe to the company.
From India, Mumbai
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Company has already filed a case U/s 138 as the OP says.
s. 138 says :
138 Dishonour of cheque for insufficiency, etc., of funds in the account. —Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque, or with both
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It is now for the Court to decide how sound your case is and what penalties to impose. You would have got a Notice from the Company earlier demanding payment and now that a case has been filed a Notice/Summons from the Court also , enclosing the Written Statement of the Company which should set out clearly why they are claiming this amount.
If you can rebut their claims in writing, with strong evidence to back it up rather than just statements you may have a case. Else you have no case, IMHO.
Suggest you take advise of a lawyer now.
From United States, New York
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s. 138 says :
138 Dishonour of cheque for insufficiency, etc., of funds in the account. —Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque, or with both
====
It is now for the Court to decide how sound your case is and what penalties to impose. You would have got a Notice from the Company earlier demanding payment and now that a case has been filed a Notice/Summons from the Court also , enclosing the Written Statement of the Company which should set out clearly why they are claiming this amount.
If you can rebut their claims in writing, with strong evidence to back it up rather than just statements you may have a case. Else you have no case, IMHO.
Suggest you take advise of a lawyer now.
From United States, New York
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Hi So, if a person can opt. Stop payment option And the cheque become void, than company can not take any action??
From India, Bhopal
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From India, Bhopal
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A cheque stopped for payment is equivalent to bouncing of the cheque. Therefore, whether there were sufficient funds in the account is immaterial. The matter is still covered under Sec. 138.
You cannot issue a cheque for a debt and then issue a stop payment.
From India, Mumbai
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You cannot issue a cheque for a debt and then issue a stop payment.
From India, Mumbai
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Dear Anil Arora,
The problem you experienced should have been described rather than asking so many academic questions. Solutions depend on the nature of the problem, not generic answers. It is based on hypothetical academic questions. However, not having seen this query earlier, I apologize for the late response.
Thank you.
From India, Delhi
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The problem you experienced should have been described rather than asking so many academic questions. Solutions depend on the nature of the problem, not generic answers. It is based on hypothetical academic questions. However, not having seen this query earlier, I apologize for the late response.
Thank you.
From India, Delhi
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